CEO outsourcing
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CEO outsourcing

Going after the best of the best

Would you Outsource the CEO/ COO role?

Is it something too critical to be outsourced? Or, too confidential/ business critical?

Well, there are other roles that may be far more critical to outsource (like HR management, for it may jeopardize your work team dedication and motivation, yet you most likely would do it without blinking), and as far as being something that exposes your company market strategy and operational tactics, what is the difference when you directly hire someone for the role who will be an FTE (full-time employee) and ends up being let go by not being able to deliver the required performance?

The role of a CEO or COO is to enforce the implementation of a defined Corporate Operational Business Model.

Let’s briefly look at what is a startup and what is an operational company.

A startup is a business endeavor, based on a concept or idea for a product or service, which main prime objective (opposite to what many may think), does not yet consist of exponentially generating revenue streams and promoting growth within the marketplace, but to experiment and discover which Operational Business Model best fits the creation of revenue streams.

This means that during the startup phase, what all those guys are doing is to mirror their business idea towards the market and fine tune the way they create, produce, order, assemble, provide a product or service according to market feedback until they reach a working model that produces the best financial results or, the entire idea proves not to generate enough revenue and is scraped.

A running operational company, on the other hand, has a defined Corporate Operational Business Model. Everyone in management positions knows what needs to be done, by who and when as well as in which order to produce a profitable operation and the CEO or COO is the “maestro” who will survey the corporate operation and steer it according to such well known and proven to be accurate “roadmap”.

Now, this does not contradict in any way initiatives towards improving operational processes, for Continuous Improvement means precisely to fine-tune processes and not to rearrange the entire Operational Business Model.

Warren Buffet stated in several interviews that when he buys a new company he never changes the CEO. Since he only buys successful companies, that bear the potential of becoming even more successful, the CEO has been a vital stakeholder while assuring his/ her role and responsibilities, therefore there is no point in replacing him/ her.

The synergy within the Berkshire Hathaway Group will then empower further corporate growth and expansion for that company and Mr. Buffet in fact only addresses his CEOs quarterly to ask how things are evolving.

If the richest and most successful businessman in the world does it with great success, why shouldn’t you?

 

Business Strategic Roadmap

Any hiring process represents a big “question mark” until the point in time (well after having hired someone’s services) when the real value of that human resource surfaces or it proves to have been a poor choice. So, the risk of failure is basically the same either you go for an FTE or an Outsourced profile, right?

Well, not really!

Going after someone to become your CEO or COO as an FTE, will definitely cost you (a lot), and besides that, the best profiles are likely to be taken.

If you decide to outsource, make sure to take the time to do it properly, meaning:

  • Hire a professional sourcing team to look for the best
  • Analyze their CVs in detail (mainly their backlog) to assess the potential for adding value to your Core Business
  • Go after reliable references both from partners and competitors alike and mainly clients (we live in the Internet era; information access and communication are no longer issues)
  • Have a nice chat with the shortlisted candidates (from 3 to 5), while not assuming an interview tone, yet a mutually beneficial conversation about:
    • the market and the specific focal marketplaces
    • the vertical
    • The economic context
    • how to tackle challenges at distinct levels
    • corporate management strategies
    • lobbying strategies
    • competition awareness
    • best practices
    • leverage points
    • speak about concrete past challenges and assess how this person would have tackled them
    • and so on …

A good stimulating intellectual chat will both give you a clear picture of the hum being and the professional standing before you, as well as you will certainly learn something out of it.

  • Put the Top 3 to the test for a couple of weeks while shadow running the company, meaning pay them to spend a couple of weeks managing the company in backstage through you.
  • Clearly, evaluate the structural-functional model, if you Outsource the CEO role to someone who will do it part-time, you may need to move some responsibilities towards the operational management levels immediately below.

Although Outsourcing the CEO, COO or CFO role is not applicable to every company (by several orders of reason), you should realize that the gain potential towards the ones where it does apply is colossal.

You can get a former successful CEO or senior VP at a company larger than yours (who can easily perform the CEO role), being someone that has gone through all sorts of challenging situations over several years, having successfully overcome them and learned precious lessons from those.

Most CEOs never really retire, they have “the itch” for management that forces them to revisit the market, even if in an advisory position, so why shouldn’t you both profit from that?

Outsourcing your CEO role to an experienced profile who is retired or has decided to move sideways in his/ her career to Business Coaching is likely to be one of the best investments and strategic decisions you can make.

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