1) C Suite Inflation🔗

C suite titles, and the associated remuneration packages, should be earnt and not just be given out as a reward for service or loyalty. Every employee wants to earn more and gain kudos with a more decorated title for their own career, but this will cause immense problems down the line. It dilutes this value and expectations become unrealistic.

It will also cause problems with the corporate hierarchy and remuneration structures. Obvious examples are in the early days thinking your top techy person is “critical and irreplaceable” so gets promoted to CTO, because “it feels the right thing to do”. When the business triples in size, you may well find that the skills of your incumbent CTO are not sufficient and want to bring in additional expertise via someone more senior. There is no vacant CTO role, leaving you with a very difficult decision or demotivating conversations, leaving your salary structures are severely challenged.

In finance this is also especially typical – don’t confuse a CFO with a competent management accountant. They operate at totally different levels. A CFO’s responsibility covers the overall financial strategy of a company, including financial planning, analysis, and decision-making, while a management accountant focuses on providing internal financial information to help managers make informed decisions within specific departments or projects, primarily through budget analysis and performance reporting.

Ways to navigate this are making sure the role and scope are clearly defined to benchmark your requirements and candidates against. Make sure the position is genuinely a C level position and actually required. In my experience these higher level appointments aren’t needed on the whole until the business is pretty mature.

2) Navigating workplace politics🔗

Transparency is the key to navigating most conflicts and especially workplace ones where emotional humans are involved. Decisions being made here affect peoples’ careers and earning potential, so setting out clear criteria for personal growth builds trust, maintains employee morale and avoids perceptions of favouritism or bias. Whatever system you choose to use to evaluate employees, it should be data driven, objective and have calibration aspects to avoid potential conflicts. This is especially important as you get near SLT and C levels as the stakes are higher in terms of competence and compensation.

Recognise when hiring or promoting to senior levels, there’s a degree of stakeholder engagement required. These are often complex and involve them in the process to address any concerns early and you may have to manage closely disappointed candidates who didn’t get the role if promoting from within.

Watch out for the “halo effect”- just because someone was seemingly successful somewhere else doesn’t mean they will be good in your company. Do deep research and referencing, get examples of real life successes and failures as this is where often poetic license of a candidate’s own ability becomes truly apparent!

3) Internal vs External Hiring🔗

There are pros and cons to both of these but a balance is often the right approach. Research shows 70% internal promotion versus 30% external seems to be a rough guideline for established companies

Internal Advantages🔗

• Deep understanding of the business, its operations and culture
• Signposts career growth opportunities boosting morale
• Lower integration and onboarding time

External Advantages🔗

• Fresh thinking and innovation
• External experience
• Different network

4) Leadership qualities vs Technical expertise🔗

Classically firms promote people based on how they have performed in their current role but this doesn’t necessarily mean they will good at a new role or with enhanced responsibilities. You often see it in sport where the best player becomes captain and then their form drops off or on the contrary the best captains that bring the most success for the team are often far from being the most skilful.

As people skills are different to technical skills and as SLT or C suite positions involves more people management, look for evidence of emotional intelligence as well as their own capacity to deal with ambiguity, complexity and adaptability. Do not overlook this as this is a critical factor

In general , the higher you go through a firm , the higher the level of strategic thinking you will need. Assess whether the candidate can think about the bigger picture strategy and how they can support that.

5) Additional considerations🔗

Succession planning and talent management are always desirable. People need to see what is ahead and firms need to identify high potential employees for future leadership roles. Hiring for senior leadership roles is expensive so if you can grow from within, there are genuine benefits. There are numerous methods for doing this but I have found assigning practical, challenging stretch projects where the candidate also takes temporary leadership often will shows signs of early promise. Be mindful of the “favouritism” point described earlier when selecting though.

Onboarding for senior managers is often overlooked on the premise that they should know it all already. Protect the person by setting them up to succeed not fail. Create opportunities that facilitate early positive key stakeholder engagements and early wins. This should help with positivity in the team and creating a good working environment to counter humans naturally not liking change.

In addition, provide regular feedback and coaching to the person, so that your expectations are understood whilst they navigate the new working environment and culture. Do not fill your SLT or C suite with Mini-Me’s. You need diversity of thought and challenge, especially at senior level to keep moving forward especially with innovation and strategy.

Finally, don’t hurry the process. These are key appointments, which are about the future of the organisation and not just executing on the present effectively. Do it thoroughly with screening, multiple interviews by different people and scorecards, reference checks and get real life example examples of how the person operates. You want to know what this person is going to bring to the organisation in the future and why the firm will be better with them in this role.

Summary🔗

Long and short these are critical positions for the medium term of the business, so make sure you first actually need the positions. If you go early with C suite titles, it is very hard to roll back and will prove financially and strategically painful. Make sure it’s an evolution to create these positions – you shouldn’t just wake up and say I need a COO because your Head of Operations has been putting pressure on you!

Don’t rush the process and don’t ignore red flags. If it doesn’t feel right, investigate it properly.

The business has got to where it has without these positions and will be able to survive (and probably grow) with your existing team in the short term. This about the next five years, so make sure you future proof for that timeline and where you expect to be.