Hire Slow, Fire Fast

But due to the uncommon demands, risks, and rewards of the CEO’s job, you have to find them differently, evaluate them differently, and offer them jobs differently. There isn’t a shortage in the outfield of candidates, but to find the one that will consistently be a home-run hitter requires careful recruitment and screening.

To begin: Don’t just screen and interview based on résumés. After all, we are all our very best on our résumés (and during our eulogy). Before the screening process even starts, define specific accountabilities of the position (e.g., results) as well as mission-critical competencies that the ultimate CEO would exhibit (e.g., the manner in which you expect the results to be delivered).

It's the role of the board of directors to discern the difference between a good CEO who made a mistake, and a CEO who is incapable of leading a company toward profitable growth.

Next: Devote a lot of time to screening and interviewing. I know that interviewing seems like the biggest waste of time, but taking the time to do it right up-front will save a lot of pain later on. Smart’s Topgrading book, training materials, DVDs, and interview forms are some of the best I’ve seen (topgrading.com), and are used by many top business leaders, including General Electric, Bank of America, Barclays, and Honeywell. A key component of the topgrading approach is a thorough chronological interview, conducted by two people at a time over about three to four hours, that covers key successes, failures, decisions, and relationships in all full-time jobs.

Fast to Fire

While too many directors make the mistake of being quick to hire, they do the opposite when it’s time to fire: They drag their feet. Why? Factors include the emotional ties that directors have to the CEO who has become a friend, not wanting to admit that a hiring mistake was made, or not wanting the organizational disruption and distraction that a new boss causes.

And there’s never a clear, black-and-white answer (other than in cases when the CEO has engaged in illegal or unethical activity). The CEO’s job is tough; they perform many tasks that require a broad range of skills, experiences, and depth of knowledge. No CEO is mistake-free. No CEO comes with all of the skills needed in his or her tool belt. And no CEO operates in a vacuum; some market conditions are beyond the power of even the most adept CEOs. So there can be plenty of reasons for underperformance, missed deadlines, and lost opportunities.