Hiring the right CEO (Advice for foreign companies starting up or restructuring in Japan)

Hiring the right CEO (Advice for foreign companies starting up or restructuring in Japan)

"Probably no other new hire in a company is as important as the CEO..." Yes, I know that is an obvious and common sense statement to make, but it surprises me how often foreign senior managers - those assigned by their overseas board of directors to find such a person - don't use common sense in this decision. Often, they fulfill their short-term mission - that of finding someone acceptable - instead of focusing on whether the person can actually do the job after the honeymoon is over. I should know, in an effort to please my board, I made the same mistake myself once.

The fact is that the CEO has to be an embodiment of the company itself - so what you're looking for is someone who can start and build a religious order, so to speak. Anything less than a religious fervor among your staff will probably mean that your new start-up will fail in Japan. Therefore, while going for a well-connected, senior, and conservative gentleman with the right credentials might be playing it safe with your board, it's almost never productive in the long-term. In fact, the less energy and fire you bring in at the top, the more you need on-the-ball middle managers, because all of the motivation and vision is going to have to come from them instead.

After September 11th last year, I have really been spending a lot of time on this question of how to hire the right CEO; many of my clients are asking themselves the same questions, which means that some existing CEOs should be preparing for the axe to fall. I have personally come to the conclusion that hiring a CEO for any company other than the very biggest and wealthiest has to be made on just two major factors: knowledge of the industry and an ability to motivate those around him/her. Forget about prior CEO experience and so-called credibility in the market. What matters this year, and probably for the next 3-5 years, is to have a highly motivated work unit with the ability to churn out new ideas, sell/execute them well, and to make money.

As I mentioned before, it often surprises me how customers fly in on a whirlwind trip from Europe or the USA, and task 1-3 recruiting firms to come up with the right CEO candidate. I am surprised, because the very important task of hiring a new CEO is being abdicated to someone who isn't even on the company's side. Yes, there are a lot of reputable recruiters around, but you always have to remember that their job is to place the candidate, not to run your company in 12 months time. So it's inevitable that getting and developing/keeping the right CEO requires a significant time and energy commitment by the hirer.

Instead, I strongly advise our busy and harried international customers to send in a second person from HQ whose main purpose is to "watch dog" the new CEO and make sure that they grow the business in a manner suitable to the company's own ethics and ethos. By that I mean that this person from HQ should literally stay and live in Japan for at least the first 6-12 months of the new candidate's tenure, just to make sure that everything goes according to plan. Doing this avoids so much of the liability of a bad choice later on, and the cost will be well worth it.

Furthermore, while you may have a recruiter on the job, I do think it is important for all end-hirers to be out looking at the market for themselves. There is a simple formula for finding people even if you don't already have a recruiter's Rolodex: it is to get out there and do some sales on your own. Since you're looking for someone in the same industry, pack up your presentation kit and get out there and meet as many bucho-level managers in your sales channels as possible. Ask them who else is hot in the industry and why. Where there is success, there is usually a good manager behind the scenes. Find them, then sic your recruiter on them.

If you are considering a career in the recruiting industry, you can drop Terrie Lloyd an email for more advice at terrie.lloyd@daijob.com. You can also see his weekly newsletter, called Terrie's Take, at www.terrie.com.

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