One of the major challenges that a CEO faces comes when it becomes necessary to build a business development capability beyond that of the core operating team. The challenge reemerges when that capability needs to be expanded. In fact, it is one of the most regularly recurring challenges. More of that later. But, for now, let’s start with the first time.
Your company has become increasingly profitable. It has an expanding business base, a growing reputation for quality and reliability and a culture that seems to please most of your team most of the time.
But there is a cloud on the horizon. You know that the team is doing its best to bring in business. They are always on the lookout for opportunities to expand the beachheads that you have helped them establish. The problem is that it is looking more and more like you are going to harvest all that there is from that process. You need to build the capability of reaching new clients and capturing new business.
Something else has been bothering you. Your financial statements are telling you that the cost of targeting, pursuing, capturing and then delivering on those smaller chunks of business is getting to be more than the profit margins you expected. Clearly you need to start winning bigger chunks.
The Fateful Decision
Like most CEOs, you decide that it is time to bring in people who specialize in business development. You and your team have been doing it all along but now it is time to get some fulltime ‘professionals’ on it. So maybe you start with the job boards or your network. Maybe you contact a recruiter. Either way, the word gets out that you are hiring.
You end up getting a stack of resumes right off the bat. As the word gets around that you are hiring, that stack turns into a flood. They come in all sizes and level of details. Now you are stuck. You are looking through a series of resumes in an attempt to fill a new position and you know neither the applicants nor the real functioning of the position. Sure you can say “I want you to go out and get new business – and bring it in in bigger chunks” but that is hardly an understanding.
In desperation you attempt to get other members of your team involved. Maybe your assistant becomes the first screen for the resumes. You give some guidance – look for experience related to our business, no jumpers (people who seem to change jobs every year or so), nobody with less than three years experience, etc. Your assistant begins sorting out the survivors and soon you have a neat pile of resumes on your desk; all of which passed your screens.
Let the Parade Begin
This is probably one of your first experiences with a more formal process of identifying, vetting and negotiating with potential team members. During the initial interviews you meet all the usual characters including some of these:
o The one meeting wonder: These people are great at first meetings but turn out to be the proverbial one trick pony. The first meeting goes well and then they turn into some sort of antisocial hunchback. You get your first signal when the follow up communication from them is either obviously canned or makes a reference that makes no sense. At the University of Texas we used to refer to these people as ‘all hat and no cattle’.
o The ‘elevator speech masters’: With these types, the good times don’t even last through the first meeting. They are the proverbial mile wide and inch deep. With their ego in full flower, you are assaulted with a steady stream of self-aggrandizing drivel that more civilized people call bragging but I tag as public masturbation. The real problem with these ‘elevator speech’ types is that they neither know nor care about you or your company. The interview is ‘their time to shine’. They just want a paycheck.
o Miscreants: “You do know that this is an interview for a senior position with a company that is in the business of serving professional clients?” That was the question that one of my clients put to a candidate who arrived half an hour late for the interview and was dressed like one of the village people. Another favorite are candidates who seem to think that an interview is a ‘mine’s bigger than yours’ type of contest. I had one tell me that he knew better how to run my business than I did. He seemed confused when I ended the interview by wishing him well in competing with us and adding that I was uncomfortable discussing the inner workings of my company with a competitor.
o The Avatars: Welcome to the post-modernist world. You get a resume that seems too good to be true and schedule an interview. The resume sits on your desk while the time approaches when you may finally meet the business development professional of your dreams. You scan it on occasion. You even do a bit of Goggling and visit the websites of the companies they have worked for. Then the person arrives. After the first ten minutes you want to ask them when the person who is described in the resume is going to show up.
Well, you get the idea and, if you have been down that road, you have probably been shaking your head as the memories flood back.
You discuss the process with your team and some of them express reservations about having this new person chase business with existing clients. This concern is partially out of self-interest (they get compensated when they bring in new business) and partially out of concern for the company and its reputation. After all, this new person is not as steeped in the company’s value proposition as the others are.
Your CFO is telling you that this person will be all overhead – 0% billable. That is going to be a big change from how business development has been funded.
Your COO is not sure about this move at all. Who will this person report to? Are they part of his span of control or do they report directly to you? Does that mean that business development is split with part of it going through her and part directly to you?
The closer you get to actually making a hire, the more complicated things seem to be.
So maybe you have it narrowed down to four or six candidates by now. All have passed the initial interview and survived follow-on ones with your senior team. And during that process you have requested and received references from each candidate. If you’ve done it the traditional way (that is to say the wrong way) you have called those people who were offered as references. Low and behold, all of them had very positive things to say. And then maybe you resorted to a cheap trick like ‘give me somebody who doesn’t like you’.
Of course, the right way is to identify those positions which the candidate has filled in the past that most closely resemble the one you are seeking to fill and ask for supervisors and CEOs as references. In other words, you pick the references.
Either way you end up talking to a series of people you probably don’t know. In each case you have a few minutes to gather what information you can. But you suffer the disadvantage of not knowing the person on the other end of the line. And you know little of their agenda. (I once heard a CEO gleefully tell how he was more than glad to give a good report on past employees that were real ‘screw ups’ if the company they were going to work for was, in any way, a competitor)
References can be helpful but you need to stay out of the traditional channels and break into a different approach.
Then It Begins
But let’s say that you soldier on and pick a candidate. You make an offer, which is accepted, and schedule a meeting to clean up the details. As a polite host, you want the candidate to ask questions. You have a few of your own. You want to know how soon your investment is going to pay off. What business is going to be pursued initially. But there are also concerns that you need to express. For instance, you reveal that you will wall off the existing client base.
The meeting goes well until you start getting to your questions. Then things get a little out of focus. You (unreasonably) are expecting specific answers and firm assurances. That is not what you are getting.
© Dr. Earl R. Smith II