A reflection from our editorial team
CEOs are increasingly taking a one-stop approach to their top jobs due to factors such as increased pressure, scrutiny, and the challenging business environment. This contrasts with the old trend of moving from company to company in search of new perspectives, as CEOs now prioritize avoiding the possibility of a performance decline after a successful tenure.
The Importance of Lifelong Learning for CEOs
The following contribution is from the Chief Executives Council™ portal, the leading community and platform for CEOs, chairmen, founders, and senior executives in the United States and globally. We focus on professional development and training, best practice resources, peer networking, recognition, and more.
The mission of the Chief Executives Council is to be the leading community and resource for CEO and senior executive best practices globally. To support this important mission, the Chief Executives Council offers a wide range of professional resources and ongoing programs developed specifically for CEOs, including expert roundtables on topical issues, research studies for senior executives, the CEO Insights™ interview series, the annual CEO Pinnacle™ Awards, as well as informative articles, white papers, newsletters, and a carefully curated vendor resource directory.
The Chief Executives Council annually publishes the CEO Sentiment Study™, which quantifies the CEO Financial Performance Index™ (FPI) and the CEO Spend/Budget Index™ (SBI).
For CEOs, it’s rarely a one-size-fits-all solution. Implemented systems must be constantly reviewed to ensure they stay current with the latest trends. They must be continually examined for efficiency.
This approach requires a lifelong learning strategy.
CEOs must learn about market trends and the latest technologies. They should also open their minds to aspects of learning beyond their industry to improve their problem-solving and decision-making skills.
What are the benefits of lifelong learning?
It helps you keep up with an ever-evolving business landscape.
When leaders learn within their industry, they become familiar with market trends, technology, and efficient systems.
They ensure their business remains competitive in an ever-evolving landscape.
CEOs can also use this information to stay ahead of change and become thought leaders in their industry.
Improves problem-solving and decision-making.
Opening your mind to all types of learning opens you up to new perspectives, helping you see things from different perspectives.
It also supports mental processes so you can find innovative solutions.
Learning allows you to think outside the box to achieve innovative problem-solving and smart decision-making.
Inspires teams.
Leaders committed to lifelong learning inspire their teams to follow suit. This approach strengthens businesses. When everyone participates in active learning, teams become more powerful and companies more successful.
Fosters Personal and Professional Growth
The learning experience helps leaders develop new skills. These skills can make their personal lives more fulfilling.
It can also help them advance in their careers. Learning boosts emotional intelligence, fostering better personal and professional relationships.
How to Commit to Continuous Learning
Set Goals
Leaders should start by setting goals about what they want to learn.
The topic can range from a specific skill set to a psychological concept. Setting goals helps determine what to study and focus on achieving it.
Prioritize Learning
CEOs are busy people, but they must set aside time for learning if they want to be successful.
You may be more motivated to learn by attending workshops or taking online courses. A fixed schedule can facilitate accountability.
But even if your learning approach is more independent, be sure to incorporate it into your schedule.
Explore Various Learning Formats and Topics
Leaders shouldn’t feel limited in what they learn or how they learn it.
They don’t need to limit their training to industry-related topics or specific formats.
CEOs can learn by reading books, talking to other professionals, listening to podcasts, and taking courses. They can learn about art, science, and market trends.
The more leaders address diverse topics, the more they open their minds and see different perspectives.
Create a Learning Culture in Your Organization
Leaders must lead by example and create a learning culture in their organization.
This promotes innovation, ensuring everyone improves processes and develops better ideas.
While leading by example can be inspiring, leaders can also provide the means for teams to learn.
They can offer workshops and in-house training programs or suggest learning resources to employees.
Connect to Learn from Others
Networking experiences can also be learning experiences.
Attend conferences and events to learn about innovations in your industry and beyond. Turn every meeting into a learning experience by practicing active listening and asking questions.
Stay curious and open-minded
Learning goes beyond participating in a workshop or reading a book.
You must stay curious and open-minded to learn from what’s around you.
You never know when the next learning experience might arise.
Learning Activities Leaders Should Explore
Project-Based Learning: Leaders can learn by working on open-ended projects that require design, development, and creative problem-solving.
Inquiry-Based Learning: Inquiry-based learning involves independent research and asking questions that encourage critical thinking.
Collaborative Learning: Leaders should seek opportunities to collaborate with others. This allows them to understand diverse perspectives that can lead to innovative solutions.
Artistic Integration: Your industry may not be arts-oriented, but exploring the arts can stimulate creativity and open your mind to different modes of communication.
Modeling Creativity: This learning method encourages risk-taking and experimenting with new ideas.
Putting Lifelong Learning on the CEO Agenda
The following contribution is from the McKinsey portal and the authors are Amy Edmondson and Bror Saxberg.
About the author(s): Amy Edmondson is the Novartis Professor of Leadership and Management at Harvard Business School. Bror Saxberg is vice president of learning sciences at the Chan Zuckerberg Initiative. Edmondson and Saxberg are members of the Consortium for the Advancement of Adult Learning and Development (CAALD), convened by McKinsey & Company.
In an open letter to business leaders, a Harvard Business School professor and a learning engineer from the Chan Zuckerberg Initiative make a compelling case for making learning a corporate priority.
If you’re like most corporate leaders we know, you say (and think) the right things when it comes to learning, like, «Our people are our most valuable asset, and their development is our top priority.» But if you’re honest with yourself, you also know that your actions often prioritize financial capital over human capital, and you can let people find the learning opportunities they need. This worked, to some extent, when people spent most of their time «doing» rather than «thinking,» «creating,» or «deciding.»
But times are changing. Artificial intelligence (AI) and robotics are making it easier to automate a growing number of «action» tasks.
Today’s AI-powered, information-rich tools are increasingly capable of handling jobs once performed exclusively by people, such as tax returns, translations, accounting, and even some types of surgery.
These changes will produce massive disruptions in employment and have enormous implications for you as a business leader.
We are both educators, with decades of experience working with businesses. We write this letter not to criticize, but to explain why a new emphasis on lifelong learning will be increasingly critical to your work: maximizing your organization’s value and impact.
Cognitive Skills
We are not visionaries. Still, one thing is clear: in the future, more and more staff will need to use complex cognitive skills for longer periods of time.
Some are already comfortable with this; others are not.
As managers of your company’s value, you need to understand how to prepare your staff, not because it’s a nice-to-have, but because the competitive advantage of early adopters of advanced algorithms and robotics will rapidly diminish.
In short, companies will differentiate themselves not just by having the tools, but by how their staff interact with them and make the complex decisions they must make in the performance of their jobs.
The greater the use of information-rich tools, the more important the decisions still made by people will become.
This, in turn, increases the importance of lifelong learning. Workers, managers, and executives need to keep up with machines and be able to interpret their results.
Future Challenges
You may wonder if it’s possible to adapt to technological changes simply by finding new people capable of doing new things.
The answer is no. There’s a kind of Moore’s Law, according to which the capabilities of these information tools double every two years or less.
You can’t achieve success simply by firing and hiring if you have to renew staff every 9 to 18 months to incorporate new skills.
There are other issues to consider as well.
One of them is that we live in a world where companies must quickly adapt their strategies in response to competition, structural changes brought about by digitalization, and the conflicting insights revealed by advanced analytics.
This means that the old division between strategy development and execution, if it ever made sense, is obsolete: organizations must continually adapt and therefore learn while they execute.
In such a world, the future of learning is not in the classroom.
It’s in the field: finding ways to improve while working. This won’t happen by chance.
It’s necessary to model learning behaviors and invest in the development of learning processes and tools.
It’s necessary to adopt the necessary humility in the face of future challenges, both for oneself as a leader and for the organization.
In a highly dynamic and uncertain world, there is simply no room for arrogance.
It’s also necessary to create a psychologically safe environment where people feel comfortable taking the risks that come with experimentation and practice, giving and receiving honest feedback, asking questions, and acknowledging failures.
Learning must be embedded in every aspect of the organization.
Another uncomfortable truth is that, historically, the education and training sector has been unsuccessful in implementing iterative, evidence-based improvements in the learning processes and outcomes it emphasizes.
The science of learning exists. It’s just not always, or even frequently, applied in the workplace. There is very little «learning engineering.»
As a senior leader, you must rethink how to continually improve your employees’ skills beyond conventional training and education.
You must insist on experimenting with new learning methods and seeking approaches based on solid evidence.
In addition, you must identify and support learning leaders who are deeply connected to the science of learning and who can champion the implementation of appropriate measures.
Soft Priorities
When we talk about learning, the emphasis is often on «hard» skills, such as programming, analytics, and data science.
While these skills will be crucial, they are only part of the story. The dynamic we described at the beginning, in which information-rich tools become ubiquitous and people are a differentiating factor, paradoxically increases the importance of «soft» attributes such as collaboration, empathy, and meaning-making.
Collaboration
In most organizations, teamwork will be more important and valuable than ever.
In both scientific discovery and commercial innovation, for example, the size of innovative teams has increased, and the skills being combined are more diverse than ever.
This is because, as knowledge expands, expertise deepens and narrows, requiring collaboration across fields to achieve great results.
In ways that would have seemed unlikely 20 years ago, building a car requires integrating interdisciplinary knowledge in artificial intelligence, computer science, advanced lighting, and materials, in addition to the classic disciplines of automotive engineering: design and manufacturing.
Or consider the rescue of the Chilean miners in 2010. The miners themselves formed an extraordinary team to support their mutual survival.
But they also required the interdisciplinary expertise of the surface rescue team, which integrated the expertise of geologists, engineers, doctors, and naval special forces.
Teamwork doesn’t necessarily mean collaborating within teams in the classic sense of limited groups of people working together on specific tasks. Instead, it’s often about teamwork: communicating and collaborating with people across boundaries, such as experience or distance, spontaneously and continuously. Your people need to have, or develop, the skills for effective teamwork.
Empathy
Global markets can threaten the ability to empathize spontaneously, especially when we can’t see each other’s faces, for example, in geographically dispersed work teams or remote service encounters.
Genuine human connections can be forged—and broken—quickly.
Both customers and employees feel deep loyalty to organizations that treat them with respect.
To some extent, empathy can be taught through perspective-taking exercises and brief but insightful exchanges between people.
For this to happen, leaders at all levels of the organization must be committed and model appropriate behavior.
This can start with something as simple as asking managers to put themselves in someone else’s shoes in a given situation.
Offer experiences where success can only be achieved by practicing empathy.
Some companies encourage this by requiring managers to work on the front lines, at the store counter or on the production floor, before assuming an office role.
You should also monitor feedback blogs. Praise your staff, publicly, when they get things right.
Observe your customers and how they interact with your company. Use design thinking tools, such as empathy maps, as a starting point for conceiving new products and features and identifying customer pain points.
In the age of personalization, empathy is more important because it requires putting yourself in the minds of different types of customers, not just those for whom a product or service was designed.
Meaning Creation
Meaning creation in the age of AI begins with understanding what machines can and cannot do.
For example, a machine may be able to make certain types of diagnoses more accurately than a person.
But it will be up to nurses, doctors, and therapists to help patients understand the implications and manage the consequences. This is the difference between knowledge and meaning.
The Search for Meaning
The search for meaning guides many types of decisions: it may be overcoming a work challenge, a way to advance professionally, solving a personal problem, or matters related to health and well-being.
As information-rich tools help provide better solutions to complex situations, organizations will need to understand what is important to each person.
Meaningfully connecting decisions, even those made by algorithms, to individual circumstances will likely be the work of skilled people for a long time to come, if we prepare our organizations to think this way.
You and your team can be both meaning seekers and meaning makers.
Harnessing this fundamental human quality is the best strategy for winning everyone’s support, both inside and out.
And it’s good for business, too.
People who come to work believing their work matters—that it somehow contributes to making the world a better place—are more committed to their organizations, more passionate about serving customers, and more resilient in the face of challenges.
Good leaders have always played this role; when they don’t, people tend to act in ways that maximize self-interest and minimize effort.
However, we argue that articulating your organization’s purpose (and evolving that message as technology and customer needs change) is about to become an even more crucial part of your job.
Although the importance of soft skills may be growing, you should consider investments in learning and development the same way you consider any investment:
– What is the value?
– How do I know I’m getting it?
– How can I increase its efficiency?
The only way to answer questions like these is to identify how employee decisions add or subtract value to the organization.
The costs and benefits of decisions made by many high-volume, high-value, and high-variability employee groups, such as sales staff or project managers, are often unknown.
It’s up to you to determine which metrics are important, such as closure rates or error costs; then you must communicate these priorities.
For example, tracking nursing staff error rates (and the decisions that drive them) and then taking action can translate into shorter hospital visits, fewer lawsuits, and better health outcomes.
Once you’ve decided which metrics to monitor, you need to follow four steps:
First, find the best-performing pilots and prepare to be amazed at the value they contribute with their decisions compared to the average-performing pilot.
This establishes a benchmark for the value that could be generated with proper training. (It can be considerable!)
Second, analyze what these high-performing pilots decide and do. This isn’t easy, because much of it is unconscious.
Even so, it’s important to learn as much as possible. Based on this, ensure that best practices are the focus of training and development programs. A study of helicopter pilots, for example, found that the best pilots had a specific, albeit unconscious, way of using their gaze during a landing.
The study also revealed that novices could easily be taught to consciously approximate those same gaze directions, thereby reducing the accident rate in simulations.
Third, with these goals in mind, insist on well-designed training, based on insights from the science of learning, and support the collection of high-quality evidence on outcomes.
After all, achieving a return is the goal of any investment. You’ll need to compare the work of those who have received new training with that of those who haven’t and look for substantial differences in value.
Finally, commit to continuing this cycle of tracking experience, improving training, and collecting evidence over time to ensure you continue to generate value.
Training is no longer a «one-time» thing, if it ever was. Ever-changing work environments mean that continuous improvement must be the norm.
It may seem like a lot of work, but it will become a competitive necessity.
The rapid development of information-rich tools, coupled with the rapid pace of change in all aspects of society, means that the decisions and organizational functions left to people matter more than ever. Therefore, you need to focus more and dedicate more time to improving your employees’ skills and mastering the collaboration, empathy, and meaning-making skills that will help your organization thrive.
Business Progression Through CEO Succession: Driving Growth and Proactive Planning
The following contribution is from Consello’s website.
Consello’s Investment Banking, M&A, and Advocacy practice has over 100 years of combined experience working on some of the most significant mandates in the industry.
Executive Perspectives
The author is Dr. Anita Sands of the SPAC Boards of ServiceNow, Softbank, and Khosla Ventures.
CEO Tenure Is Shortening: The median tenure among S&P 500 CEOs has steadily declined and was just 4.8 years in 2022.
Partly due to the disruption caused by the COVID-19 pandemic, CEO turnover was 50% higher in 2023 than in 2022.
Given the shortening lifespans of CEOs, planning for the next CEO becomes even more imperative.
This weighs on the minds of CEOs serving on boards, grooming future CEOs, or considering their own succession. Yet many boards find themselves ill-prepared for the inevitable. A 2024 BoardSpan survey of 200 directors revealed a sobering truth: less than 10% are confident in their emergency and long-term plans.
Effective succession transcends the mere act of replacing leadership; it involves the careful planning of a complex, multi-year process.
In my numerous conversations with CEOs and board members, I regularly answer questions about this process.
If executed correctly, succession planning ensures continuity and prepares the organization for future success.
If done poorly, mistakes in succession can lead to organizational disruption and the loss of significant shareholder value.
A CEO’s departure, whether planned or abrupt, reverberates throughout the company and its ecosystem.
Shareholders, employees, and customers alike obsess over these transitions, aware of their far-reaching consequences.
Selecting and transitioning leadership is not just a change, but an inflection point that can alter a company’s trajectory. For both boards and CEOs, it is the ultimate test of judgment and management.
When Boards Should Act
While scenarios like the dreaded «run over» demand succession with undeniable urgency, the need for change in other scenarios is not so obvious.
Boards may hesitate to broach the subject with a high-performing CEO who has indicated a desire to stay.
They may fear starting an internal competition that creates distractions or unsettling investors with speculation of an imminent change.
However, the process is inevitable, and identifying the next CEO begins on day one of their tenure.
The first step is to ensure that options are in place in case of an emergency. Then, as the CEO’s term progresses, the focus naturally shifts to long-term planning: a collaborative effort led jointly by the CEO and the board.
Succession planning is a dynamic and ongoing process, not a one-time event.
A high-level approach encompasses a wide range of candidates, evaluating external candidates and preparing internal candidates.
This ongoing planning helps avoid the worst-case scenario, when no options are available, and gives the board the best chance of achieving the ideal scenario, where they can manage an outcome, not a deadline.
An Annual Planning Topic
The best time for succession (and its planning) is not when a company is undergoing existential change or when the board is forced to do so by activist investors.
At a minimum, succession planning should be an annual item on the board’s agenda and encompass comprehensive plans for every possible scenario.
The more potential successors boards can identify, the better prepared they will be for whatever the future throws at the company.
This means boards should start early, encompass a broad spectrum of candidates, and maintain an open mind as the process unfolds.
Who are the candidates?
Understanding the future of the company and the type of CEO it needs going forward is the first step in defining the «who» of succession planning.
This involves a thorough analysis of the industry, an evaluation of the company’s strategic options, and an appreciation of the organizational culture, resulting in a comprehensive set of criteria and a profile of the future CEO.
As the business landscape evolves and macroeconomic environments change, boards of directors must anticipate different scenarios that could transform the profile of their ideal leader.
The ranking of the most important criteria is reorganized as circumstances change.
New vs. Veteran Candidates
In industries facing disruption, clinging to historical norms can be dangerous.
Succeeding in a world driven by innovation requires a visionary leader, someone who goes beyond maintaining the status quo.
Does it make sense to appoint an industry veteran with decades of experience in the «old world» if you are convinced that the «new world» will be radically different?
Boards of directors must have the courage of their conviction and align their criteria with the needs of the business for the next decade.
Rather than choosing a «safe» candidate, the best choice may be a forward-thinking candidate, even if they have less experience or seem unconventional at first.
Succession planning is a dynamic and ongoing process, not a one-time thing. Many boards recognize that replacing similar companies isn’t enough and that investing in a newcomer may be the best option.
In fact, 88% of new CEOs of publicly traded companies in 2023 were in their first position.
However, those new to the CEO role face their own unique challenges, as these leaders have three new roles: reporting to a board of directors, being committed to a stakeholder base, and being responsible for the overall success of the business.
These leaders may also be tasked with managing a team, whose members may have previously been colleagues.
New CEOs must be humble and willing to learn,
but also willing to make difficult decisions and move the company in a different direction if necessary.
Boards can play a critical role in guiding and supporting these CEOs, but they must be equally rigorous in assessing their own composition and preparation:
– Are the right voices in place to support this CEO?
– Do they have a plan to ensure a smooth transition and a successful start to their tenure?
Internal vs. External Candidates
Choosing internal or external candidates can be one of the most complex decisions for a board.
External candidates present their own complexities and considerations, as boards must evaluate factors such as cultural fit in addition to their technical skills.
It is critical to determine whether the candidate will blend seamlessly with the organization’s culture and values or will contrast sharply with their predecessor—which is not always a negative. Board members typically understand internal candidates’ strengths and growth opportunities, as well as the tasks they expect them to perform before they are ready for the top position.
The current CEO should be involved in promoting that individual and ensuring they are presented with appropriate development opportunities.
While it is impossible to predict someone’s performance once in the CEO role, current CEOs can do much to contribute to their success by preparing their successors.
Boards should also consider that a lengthy succession process can increase the risk of high-potential individuals being tempted by CEO roles elsewhere.
To retain internal talent, boards, CEOs, and HR directors should collaborate on development pathways to ensure continued career advancement and maintain the necessary rigorous and transparent conversations with candidates throughout the process. It’s important to emphasize that it’s worth investing in retention, even for candidates with multiple stages, as even if they’re not ready now, they could be considered viable in future succession cycles.
Unfortunately, some individuals who were once ideally suited for an earlier phase of succession planning may be overtaken by the changing needs of the business, reiterating the need for ongoing evaluation of the CEO’s and the candidates’ criteria to determine who is still on the rise and who is stagnant in terms of their potential and growth capacity.
How Boards of Directors Manage the Succession Process
Throughout succession planning, the board chair, or lead independent director, must maintain an impartial stance and manage a robust and transparent process.
In this often personal and somewhat emotional process, boards of directors can benefit from bringing in a third party who offers an objective perspective.
Many companies choose to collaborate with external partners, even if the board agrees on how they want to manage the succession, as these firms can provide benchmarks, reference criteria, and new dimensions for evaluating candidates that the board might not have considered.
These perspectives can be helpful, especially when evaluating internal candidates, whom boards of directors tend to intrinsically favor.
As business strategies continue to develop, some CEO criteria become more important than others. In the maze of talent and evolving considerations, where boards are tasked with grooming internal candidates, evaluating external ones, or considering first-time versus veteran CEOs, the expertise of an external search firm becomes indispensable.
These firms excel at categorizing external candidates based on their qualifications and criteria, while also providing crucial insights into how internal candidates compare to the best in the industry.
Signaling is another key factor boards must consider during the succession process.
The benefit of signaling the succession to the market is expectation management.
Two things investors universally dislike are uncertainty and surprises, so signaling that the company has an heir apparent and that the board is actively grooming a CEO-in-waiting addresses that challenge.
Signaling can also backfire if, in the meantime, the board changes its mind or the company shifts its focus.
There are many plausible scenarios that could lead boards to take a different direction than initially intended, and having a solid communications strategy that addresses the questions and needs of internal and external stakeholders alike is a key component of any successful process.
Leadership changes not only impact the company’s valuation but can also be disruptive internally.
When boards of directors put the CEO in transition, they put the entire company in transition.
The sad reality is that attrition will likely occur with the departure of some leaders.
This ripple effect throughout the organization requires boards to consider succession plans more broadly for the entire leadership team, their direct reports, and those below them.
For critical positions, boards of directors should create retention plans and identify incentives, such as peak bonuses, to retain their top performers.
Another key consideration in the «how» of succession is the role of the outgoing CEO after the transition.
Should they retain their seat at the table, perhaps as chairman, or is a radical departure more appropriate?
While continuity can offer valuable perspectives and support, it must be weighed against the risk of hindering necessary change.
Great humility and trust are required between incoming and outgoing CEOs for this collaboration to be beneficial.
This collaboration has been successful at companies such as ServiceNow, where Fred Luddy served on the board after his departure as CEO, and often at Procter & Gamble, where several former CEOs remain on the board.
Ultimately, the board must strike a balance, ensuring that the new CEO has the freedom to implement their vision while also benefiting from the wisdom of their predecessor.
Progression Toward Sustainable Value
CEO succession is a critical moment in the life of any organization, where leadership, strategic vision, and corporate culture converge.
Selecting and transitioning leadership is not just a change, but an inflection point that can shift any organization’s performance curve, for better or worse.
For outgoing CEOs, succession is a process that shapes their legacy. CEO tenure will not be judged solely by the value generated for shareholders, but also by leaving the company in the strongest competitive position and in the hands of a well-chosen, future-ready successor.
As the economic and competitive landscape continues to evolve and CEO tenures shorten, the only way to avoid the pitfalls of a leadership transition is to be proactive and have a plan in place well before it’s necessary.
Looking to the future with conviction distinguishes the best from the rest and results in a CEO succession that delivers more than just a business succession: it delivers business progress marked by renewed momentum, accelerated growth, and enthusiasm for the future.
How to Evaluate CEO Performance
The following post is from the Medium portal and is authored by Social TrendSpotter. It features short posts presenting the latest trends and ideas in the social sector. A place to be inspired, exchange ideas, and generate new ones.
Governance expert John Carver famously stated that «organizational performance is synonymous with CEO performance.»
In other words, if an organization performs well, the CEO must be good. And if an organization performs poorly, the CEO is to blame.
This may be true in for-profit companies, where responsibility falls on the CEO, but in the social sector, this correlation is not so clear.
Social sector organizations exist in increasingly complex environments, face radical technological changes, and must maintain a difficult balance between expectations and reality.
However, we believe that a highly effective CEO (or executive director, as is the case with many nonprofits) is a crucial element of an organization’s success.
This success must be supported by a highly effective board of directors that provides consistent direction and oversight.
One of the most common ways to achieve alignment between the CEO and board is through regular performance reviews and an annual performance appraisal.
Interestingly, a recent Korn/Ferry report showed that nearly 70% of for-profits have a formal review process.
In our experience, although the majority of board members come from the corporate sector, only 1 in 4 nonprofits has a formal review process.
CEO performance appraisals should be routine and a way for the organization to focus on continuous improvement.
While CEO performance appraisals are critical, your organization should tailor the process based on your stage in the nonprofit lifecycle and available resources. Below are some tips to make the process as smooth and productive as possible.
Before beginning, we recommend that the chair of the board and the governance committee establish a performance evaluation policy.
This policy should define the frequency with which informal and formal evaluations of the executive director are conducted and who conducts them, so that the executive director clearly understands the process by which he or she will be evaluated.
Ideally, this policy should be established well in advance of the executive director’s annual evaluation.
Keep in mind that the evaluation process should not be a one-time process. For nonprofits to truly benefit from the process, we recommend that it be ongoing.
When determining the frequency of evaluations, consider conducting several informal evaluations throughout the year in addition to the formal annual performance evaluation.
The annual performance evaluation should be scheduled at a time convenient for the organization. Since the executive director’s performance is so closely tied to the organization, it would be wise to link it with the annual retreat or organizational evaluation.
For more informal evaluations, we recommend at least quarterly meetings.
These could include meetings between the chair of the board and the CEO and executive sessions (board-only sessions) to discuss the board’s joint work, its work with the CEO, and what the community shares about that work.
Regardless of how you conduct these informal evaluations, they should be based on clear objectives and action plans (developed from the strategic plan) and directly connected to the job description and professional development plans.
We also recommend that the CEO and chair of the board jointly establish performance objectives well in advance of the formal annual review.
This allows the CEO to provide input on the most important aspects of the agency. There are several possibilities for these performance objectives, so it’s best to start with:
1) the job description,
2) the strategic plan,
3) previous performance evaluations,
and 4) previous work to determine the key competencies required for the position.
If you have an HR manager, HR, this person can help integrate this process with the organization’s to ensure consistency.
We strongly recommend a process that gathers information from diverse sources and assesses performance across multiple dimensions. Many clients have made the mistake of using only board feedback as a source for performance evaluation.
Some possibilities include:
1) CEO self-assessment;
2) an annual review of the organization, based on the strategic plan dashboard (focused on results and metrics in strategy, culture, operations, and revenue);
3) salary surveys indicating average CEO salaries in the community or in a specific area.
4) a comprehensive review of the board and key personnel (focused on leadership, decision-making, and people management skills); and
5) data collected, formally or informally, from key clients (focused on results and customer service and collaboration skills).
Keep in mind that all of the above approaches have advantages and disadvantages, so it’s important to ensure a balanced process that doesn’t prioritize one data set over another.
We also strongly encourage councils to step outside of formal settings and visit donor programs and sessions.
Fortune 500 companies, such as GE and Home Depot, find great value in this type of informal connection to the work being done.
Once the review policy, performance objectives, and appraisal sources have been identified or defined, the formal annual performance review can be planned.
The board should have a small working group (which could be the Executive or Governance Committee) to manage the appraisal process and review compensation at the annual review.
The CEO or board chair should follow the agreed-upon appraisal policy and process.
Once the process is complete, a final report should be presented to the full board for discussion.
The board should then designate one or two people to convey the information to the CEO in a well-organized conversation.
We strongly recommend several aspects of this conversation:
1) frame it as a conversation about the organization, not just the individual;
2) be constructive and solution-focused; and 3) ground the conversation in reality, considering available resources and current environmental trends.
Once this conversation is complete, the report should be updated with the mutually agreed-upon goals, needs, and planned actions, including recommended compensation.
The report should also include a response from the CEO, in which he or she can respond in writing to the board.
This report should be filed in the CEO’s personnel file.
Finally, the board and CEO should evaluate the process annually and update the policy accordingly.
We also recommend linking this initiative to the board evaluation, in which the CEO, key personnel, and the board assess the board’s effectiveness, both individually and collectively.
If this CEO performance evaluation process is followed and tailored to the organization’s individual needs and capabilities, it can be a valuable way to ensure 1) alignment between the board and CEO; 2) the celebration of deserved praise; 3) the detection of any concerns before they escalate; and 4) the activation of the organization’s plans.
A Better Way to Engage the Board in Strategy
The following contribution comes from PriceWaterhouseCoopers’ strategy and business portal.
The author is Ken Favaro, a contributing editor at strategy+business and a senior director at act2, which provides independent consulting to executive leaders, teams, and boards.
Strategy setting should be an ongoing team effort between the CEO and directors, not just an annual exercise.
The time board directors spend on strategy has increased for at least the past decade.
And most of the directors I work with want to devote even more time to this type of work.
However, in a previous post, I argued that CEOs need more than the annual planning process and external meetings to engage their directors in strategy setting.
They need what I call dynamic engagement.
Here’s how dynamic engagement works: Whether monthly, bimonthly, or quarterly, the CEO and the board regularly set aside time to work together on an ongoing, prioritized agenda of strategic issues and opportunities.
At any given time, this involves one or more of the following steps:
- Deciding which issues and opportunities have implications that could change the company’s strategy and which must be addressed immediately.
- Agreeing on how to frame each issue/opportunity (a well-structured statement, based on a consensus-based set of facts, that requires a rethinking of strategy in some major way).
- Generating alternative responses to each issue/opportunity (the ideal number of alternatives is two to four; an even number to avoid falling into a compromise, and no more than four to avoid becoming stuck with too many options).
- Selecting the criteria that will guide the evaluation of the alternatives.
- Agreeing on whether the alternatives have been sufficiently evaluated.
- Select the most appropriate alternative for the company (the question is not «What is the right thing to do?» but «What is the best thing to do?»).
- Decide on how the company’s strategy and plans should change in response to the problem/opportunity, given the selected alternatives.
Working through these issues together with the CEO means having directors actively involved in the strategy.
A constant and open debate on each issue minimizes the chances of directors and the CEO having different views on the company’s direction without knowing exactly why.
Dynamic interaction also materializes the practical reality that strategy is not a one-time thing. It either decays or evolves.
The right attitude is not «We set the strategy and then we execute it hard,» but «We execute hard and never stop evolving our strategy.»
Dynamic interaction materializes the practical reality that strategy is not a one-time thing.
Adopting this latter attitude is critical, as technological innovations, competitive disruptions, changing customer expectations, political movements, regulatory changes, and many other forces ensure a constant stream of challenges and developments that demand changes in some aspect of the strategy.
A strategy immune to these factors is likely formulated at such a high level that it isn’t a strategy at all, but simply a series of broad, general statements.
Strategy Never Ends
Therefore, the real work of strategy never ends, and it certainly doesn’t follow the orderly, annual rhythm of the typical strategic planning process and board meetings.
Strategically important issues and opportunities can arise at any time and can’t always wait for the next planning cycle or the next meeting.
Nor can the most important issues and opportunities be fully addressed within an annual planning process or board meeting, given their practical time constraints and agendas that are necessarily packed with other essential tasks.
Moreover, the CEO and board’s collaborative work on strategy must be kept separate from their important responsibilities for governance, compliance, finance, risk management, investor relations, compensation, succession, and other similar matters.
Strategy making is a creative act that benefits from an unhurried agenda, with external inspiration, fresh perspectives, and collaborative iteration. It doesn’t fit well with the typical board agenda.
Directors value the dynamic engagement approach when they experience it.
They prefer to focus on true strategy, rather than automatically approving visions, mission statements, and plans.
When they are actively involved, it has an astonishing impact on the metabolic rate of a company’s decision-making and execution due to the shared commitment and understanding it engenders.
They recognize how this exposes differences that undermine execution, makes subsequent agreements much stronger, and makes the resulting decisions much harder to undo in the future.
Directors also find that dynamic interaction creates a culture of trust and respect that fosters an environment in which they and the company’s leaders can drive progress, benefiting not only the company’s strategy but also their other roles as a board.
And as directors become increasingly involved in investor relations (thanks to rising shareholder activism), they feel much more confident communicating and supporting the company’s strategy, as well as soliciting shareholder input.
Finally, an added bonus: directors find their annual off-site meetings much better because they are deeply involved in the company’s strategy throughout the year. And they see more clearly the essential purpose of the annual planning process, which is to plan for the implementation of a dynamic, living strategy, not to create it.
The best CEOs recognize that the board gets what it puts in.
Without a doubt, dynamic interaction demands a lot from a CEO. They need an effective chair or independent director to help manage strategy meetings well, coach directors between meetings, and generally keep a tight rein on the situation.
Still, it’s not easy to approach the board with problems and opportunities for which there are no obvious answers.
In business school, we’re taught never to raise issues without a recommended solution.
It’s human to jump to a conclusion and stick with it. It can be stressful to invite critical thinking, disagreement, and creativity from directors.
And it can be burdensome to regularly spend time defining strategy with the board.
However, the best CEOs I know recognize that the board gets what it puts in.
Strong leaders are willing to say «I don’t know» and ask «What do you think?»
Having directors actively define the company’s strategy, rather than simply reviewing and approving it, significantly increases the ability to execute because of their commitment to and appreciation for it.
Moreover, directors have greater confidence in the company’s strategy and in the CEO because they work together (and with the CEO) in a way that is not only deliberate, disciplined, and purposeful, but also open, dynamic, and creative.
How Ginni Rometty, Former IBM CEO, Powered a Global Company with a Skills-Based Approach
The following contribution is from the HRInsidr portal, which defines itself as follows: We understand the challenges HR professionals face in an ever-evolving work environment. Founded by experienced HR consultants, our goal is to provide clarity, empathy, and practical solutions to HR managers, executives, and stakeholders. Whether you’re managing regulatory compliance updates, trying to influence key stakeholders, or seeking a seat at the table, HRInsidr is here to support you.
We offer unique tools and tangible downloads that can be directly applied to your work: resources such as flowcharts, templates, and toolkits designed to help you recruit, retain, and support your best talent.
Our bi-monthly newsletter delivers key HR news, guidance, and practical tips directly to your inbox. The author is Camille Bradbury.
We’ve all heard about the skills gap problem, but there are signs it’s getting worse.
LinkedIn data reveals that by 2030, 70% of the skills used in most jobs will change.
The Equal Employment Opportunity Commission’s (EEOC) recent guidance on diversity, inclusion, and inclusion (DEI) even points to a focus on the use of skills to ensure fair and equitable opportunities.
With the advancement of AI and the projection that Generation Z will make up one-third of the workforce by next year, it’s clear that HR needs a new approach to keeping its staff up to date with rapid technological and demographic changes.
I came across Ginni Rometty’s book, «Good Power: Leading Positive Changes in Our Lives, Work, and the World,» on the Harvard Business Review podcast on leadership, «When Hiring, Emphasize Degrees.» Rometty is a true example of what can be achieved by focusing on skills.
Developing people and teams was the key to her success; Rometty says it was «a pleasure to see others excel.»
Developing people became one of her most exciting endeavors and ultimately led to her success in turning IBM—one of the oldest companies in the U.S., a survivor of multiple economic crises and two wars, and once on the brink of bankruptcy—into one of the most successful companies on the Fortune 500 list.
Rometty’s biggest lesson? When employees felt we were investing in them, we invested back.
– How can we make employees part of the solution?
– What does it mean to invest in employees rather than seeing them as a transactional solution or a means to an end?
When thinking about the employee lifecycle and the company’s goals for the next five years, does everything add up?
Most of us can’t afford to renew our workforce and hire new talent with in-demand skills like AI, especially when these talents learn alongside us.
It’s more efficient to invest in our existing teams and leaders than to constantly hire or recruit new employees to learn from our culture and acquire the knowledge of our current employees.
SkillFirst Approach
When IBM needed to recruit new talent, Rometty knew that 80% of the workforce, especially minorities, didn’t have a college degree.
He knew the degree was a barrier to accessing true talent capable of doing the job with the right training.
He says, «My decades-long history of driving what I later called the SkillsFirst hiring and training movement. In a SkillsFirst world, workers no longer view education and training as one-size-fits-all propositions, even for those graduating from college.»
With his SkillsFirst talent strategy, he focused IBM on «building people, not just buying them.» He asked the classic question: «Are we over-certifying?» SkillsFirst is a catch-all term that refers to valuing a person’s skills rather than their degrees.
Rometty turned to IBM’s expert trainers and leaders to teach the skills they needed in trade schools. He discovered that, with the right training and investment, they could tap into a vast new talent pool. After a year of employment, he says, it was impossible to distinguish who had a college degree and who didn’t.
Everyone ended up in the same place.
This is just one of his many success stories with a skills-based approach.
The numbers showed that where problem-solving skills and a willingness to learn existed, they could transform and tap into a new talent pool.
But he needed management buy-in, as it required investment and a top-down approach. Most importantly, they needed to break the preconceived notion that only people with college degrees could do the job.
How to be of service with skills
He had to activate a skills-based mindset with his leadership team.
Behind his SkillsFirst initiative was an attitude of service to his employees and customers. Investing in employees starts with what they value and how they want to grow. No one strives to grow solely for the success of the business. They want to be part of something, and good leaders harness that drive through learning and development.
To grow the business, they had to tap into their most important asset: their people, who had «mouths and legs,» Rometty said.
People with their own opinions and ideas, to inspire them to be willing to learn and expand.
He discovered that the secret to developing people was to harness their confidence in themselves and what they could achieve.
During a crucial merger between IBM and PwC, he paired his internal consultants with clients who would leverage their skills and give them the opportunity to take on challenges so they could grow.
He wanted people at both companies to feel part of the new reality being created.
If others felt their ideas, individuality, and needs were valued, they would be more inspired to participate.
Everyone had a chance to contribute ideas and see how they fit together, and he hoped they would feel a sense of belonging. – Rometty
This is where upskilling through learning and development can come into its own.
Jay Jones, SHRM’s Talent and Employee Experience expert, says the most important thing is not to create a blanket learning and development policy that is then ignored.
People should be at the center of any initiative, integrating business growth with employees’ desire and willingness to learn and develop new skills.
How to Activate a Skills-Centered Mindset: Belief Matters
Beyond training for new skills, it’s about motivating people to want to grow.
Managers must seize the opportunity to articulate their team’s vision and then inspire them to pursue new skills to achieve it, both for the business and for themselves.
«Building trust is about motivating people to accept an alternative reality for themselves and others, and then willingly participating in its creation.»
This was imperative, as many of Rometty’s initiatives were created for low-income minority groups.
Acquiring new skills requires effort and willingness.
«Building trust is a voluntary victory—generating enthusiastic buy-in,» she says. «That’s what drives discretionary effort.
The opposite of building trust is ordering people to do something they don’t believe in and expecting them to act as if they did.»
You want people to follow you because they choose to.
Change constantly driven by authority or fear simply isn’t sustainable; it also serves no one but those who demand it.
Rometty says, “Productive and lasting changes in behavior and perspective can’t be imposed.”
Focusing on skills helps our leaders remember what’s important: developing people and helping them reach their full potential.
Building followers isn’t achieved simply with encouraging and inspirational speeches.
Rometty says, “Emotional connection is essential for building trust, but trust is cemented with information, honesty, and clarity about a situation and the path forward.
Facts and feelings. Connecting emotion with execution is the tension of building trust.”
By investing in our employees, we foster a sense of long-term commitment and loyalty.
As we expand the business, we develop ourselves and must focus on the power of «we.»
People development often sits at the intersection of company growth and that of its staff.
Next Steps to Creating a Skills-Based Culture
“Time is the most valuable thing someone can give, and you should value it.” – Rometty
Considering and meeting someone’s needs to the best of our ability, while also helping ourselves, is how we help people reach their potential.
This is the essence of learning and development programs. Think about how you serve your employees. Sure, you give them a job, but when you’re serving them, it’s about much more than the job.
– What is their background?
– What do they want to achieve, and how can you help them achieve it so they can find fulfillment in their lives and that of their families?
Balancing the needs of others with our own should be a win-win situation.
When we serve, we put ourselves in our employees’ shoes, helping them reach their potential. This, in turn, benefits the company.
“I’ve learned that people will forget what you said, people will forget what you did, but people will never forget how you made them feel.” – Maya Angelou
Rometty understood the concept of accountable management, which can help you reimagine how to close the skills gap in your company.
By reconsidering that learning and development isn’t just a means to an end, but how you impact your employees’ lives, you shift the mindset around these training initiatives.
You quickly see why a blanket policy doesn’t work and how meaningless incentives, like LinkedIn courses that don’t align with the overall plan, are insufficient. Viewing the journey as a person’s path and the opportunity to develop them to be a better version of themselves for their families will transform your teams and your company.
Don’t approach learning and development programs as an incentive, but as a model and an approach to developing and investing in your greatest asset: your people.
Adopting a skills-based learning culture will transform your business, the way you interact with each other, and you’ll see your productivity soar.
Aligning your staff’s passion, willingness, and desire to learn with the needs of the business is a winning strategy that will always work.
When it comes to these fundamental pillars for a company, get inspired by others: Advice from Thumbtack’s CEO
The following contribution is from First Round Review, which defines itself as follows: We believe there is powerful, untapped knowledge that can transform the way people develop technology.
There’s just one problem: it’s trapped in the minds of others—people at the top of their fields, who rarely have time to share what they’ve learned (even when they want to). The goal of this analysis is to unleash this knowledge to inspire and drive action. To fulfill this mission, we’ll make you three promises…
We’ll step aside and let the experts speak directly to you about what they think is most important. (That’s why we chose not to use bylines.)
As Marco Zappacosta, CEO of Thumbtack, says, sometimes your company is a special flower, and sometimes you should get inspired by others. Share his advice to differentiate them.
When It Comes to Your Company’s Pillars, Draw Inspiration from Others: Advice from Thumbtack’s CEO
If you look at Marco Zappacosta’s LinkedIn bio, you’ll notice it’s incredibly short. Since graduating from college, he’s only had one job, as co-founder and CEO of Thumbtack.
Without a resume packed with startup experience, the learning curve was incredibly steep for Zappacosta.
The key to finding his footing during the 13 years it took to build Thumbtack was knowing when to draw on established strategies rather than starting from scratch. Here’s how he distinguished the two:
“Advice is incredibly valuable for addressing common challenges at similar companies. When it comes to SG&A, hiring, or leveling, there’s a lot of infrastructure you can borrow from other companies that have done it well; you don’t have to be especially inventive,” says Zappacosta. (But it’s worth noting that we found a lot of innovation in his approach to executive hiring.)
It’s helpful to recognize the ways in which you’re not special. At first, you think you and your company are special in every way, and then, over time, you realize we all go through a lot.
He points out where advice often fails: “You have to be very skeptical when the advice is context-specific.
When we were building Thumbtack, virtually every smart person we talked to told us our category focus should be narrow rather than broad.
I’m glad I didn’t listen to them, because we would have failed,” he says. You started a business because you have a unique vision and believe there’s an opportunity to do something different.
That likely involves a contrarian approach, whether it’s in product, business, marketing, or design strategy. Whatever it is, you need your own perspective and to trust your intuition.
But with the seemingly endless number of forks in the road for a first-time founder, knowing when to stick to the beaten path is an incredible strength.
With this in mind, in our exclusive interview with Zappacosta, he shares many pages from the Thumbtack playbook that other startup leaders can borrow from.
He pays particular attention to areas that fall directly under the CEO’s purview, such as achieving the right company culture, refining the hiring process, and streamlining board meetings.
These are recurring themes in The Review, as nearly all leaders seek to improve these core pillars of the company.
Starting with company culture, he explains why applying lessons from late-stage companies to early-stage startups is a big mistake and what to do instead.
He champions the importance of revisiting values so they live out even in the company’s most difficult times.
Zappacosta also discusses some of his hiring mistakes over the years and how he’s designed the interview process to dig deeper rather than just skim the surface with the candidate.
Finally, he takes us inside Thumbtack’s boardroom and the tactics he uses to ensure board meetings have maximum impact across the organization. Let’s dive deeper.
COMPANY CULTURE AND VALUES ARE AN EVOLUTION, NOT A DESTINATION.
Many articles have been devoted to the architecture of a startup’s culture, but Zappacosta believes this critical step is often overlooked.
«When you read about building culture, it’s explicit work, like defining values. What this underestimates is that, from the outset, an organization’s cultural attributes and values are actually a reflection of who is brought on board from the start: the shared values that unite the initial team. Building culture starts with who is hired, and it’s nothing more than that,» he says.
It’s a mistake to be too explicit about culture and values from the start in a startup. The jury’s still out on who will be drawn to the idea or to you as the founder.
Rather than viewing company culture as something set in stone, Zappacosta shares the three stages of culture development he’s seen Thumbtack go through and warns emerging startups not to skip the second or third stages:
Stage 1: Emerging Culture. «I started this business right out of college, having never worked anywhere else. I didn’t always appreciate the impact one person can have on the environment. I wish I’d been more clear-headed and more thoughtful about who we hired early on.»
Stage 2: Defining Values. «At about 50 people, we started to grow from an employee perspective, and we needed others to interview candidates and assess the fit between culture and values. Those people rightly asked, ‘What are our values?'» says Zappacosta. «The second phase is a definition exercise: trying to make this culture and the set of implicit values explicit.»
Phase 3: Aspirational Culture. It wasn’t until about 10 years into the business that I felt we could treat culture and values as something more aspirational. It’s not simply about who you are and who you’re trying to attract, but about who you want to be.
Don’t overlook fit when searching for the best talent.
Going back to the beginnings of culture creation, Zappacosta admits it’s a tricky subject. «Early founders, including myself, tend to prioritize talent and underestimate fit. It’s very difficult to recruit when you’re two people with no brand, no money, no experience, or traction; it’s hard to convince. That’s why you often hire the most talented or qualified person possible,» he says.
Of course, talent and skill are requirements to overcome, but not the only ones. «Typically, what makes relationships not work isn’t a lack of talent, but a lack of alignment.
In retrospect, most interpersonal problems don’t arise because one person is smart and the other isn’t.
It’s about each person having a different approach or different preferences for how to do things. It’s not right or wrong, it’s just right or wrong,» says Zappacosta.
When there’s good alignment on the team, there’s a lot of trust. And when the team trusts, you can move faster because you don’t have to go all out.
He points to an early example from Thumbtack to illustrate this further: «My co-founders and I are very big on documentation. It wasn’t something we explicitly talked about in the beginning; it was just our way of working.
We hired a very experienced and insightful executive, who was clearly smart and capable. But he just wasn’t interested in working with that approach,» says Zappacosta. «It irritated him to be asked to operate in a way that didn’t play to his strengths or that, in his opinion, wasn’t the best way to do it.»
Defining (and redefining) your company’s values.
Another common cultural mistake Zappacosta observes is the confusion between values and habits. «The term culture is used in two different contexts.
One is habits, like having lunch together, a weekly all-hands meeting, or an open calendar policy. Values are the ways the company makes compromises, resolves tensions, and provides cultural guidance,» he says. «Doing weekly demos isn’t a value, it’s a habit or a way of living those values.»
Once Thumbtack reached the second phase of culture development, Zappacosta and his team began defining the values, including some details about how they manifest in the people Thumbtack hires.
Start with the why: «Is this person curious and intellectually honest? Are they able to reason from first principles, and is there written evidence that they think clearly?» Make it count: «How impact- and results-oriented is this person? Are they satisfied simply thinking about things rather than doing them?»
Own it: «It’s about a sense of accountability: people who feel they owe it to themselves and their team to follow through on their commitments.»
Choose teamwork: «There are people who like to sign their achievements, and then there are those who want to highlight the collective effort. We look for people who are excited about working with others and investing in others.»
Say what you mean: «Is this person comfortable enough with themselves and clear enough about their values to give feedback and be critical?»
But Zappacosta cautions founders that this isn’t a one-and-done thing. «Originally, our first value was called ‘Reason from First Principles.’
But we found it put too much emphasis on reasoning, which created an anti-pattern.
That reasoning was being over-applied; there was too much debate around the why of something that went beyond the point of diminishing returns,» he says.
Lead with Why
When we conducted a second round of evaluation of our values a few years ago, we felt that ‘Lead with Why’ better reflected the behavior we were looking for.
Recognize that how you define and express values can lead to different implementations, and don’t be afraid to make changes as the business evolves.
Living Your Values Through the Company’s Ups and Downs
Another way to look at it is that values should be reflected in the company’s most difficult moments, something Zappacosta felt keenly in 2020.
«COVID-19 tested us in late Q1 and early Q2 2020. There was real fear about what it would mean for our business and how demand might be reduced. Because of this, we had to make significant headcount reductions,» he says.
One of the biggest questions is how to approach that difficult decision for the company, and we took a value-focused approach. No one blamed me or the leadership team for COVID.
The only real question was whether people would gain or lose trust in our leadership based on how we dealt with it, says Zappacosta.
The power of difficult moments, however painful, is that they are ultimately very revealing.
If you reinforce and live the values you say you aspire to, it’s a moment that builds tremendous trust and loyalty.
To illustrate this point, he points to Thumbtack’s first value, Lead with Why. «Leading with Why means that whatever decision you make, you need a first-principles-based point of view. The day after the layoff, I gathered the team that was still on board and walked them through the decision tree,» says Zappacosta.
The decision tree had three key components, which were shared across the company.
The first question we tried to answer was:
– What horizon are we optimizing for?
– 6, 12, 18, or 24 months?
We explained why we chose that number.
Then, the second question was our expectations for the impact of COVID on our business between now and that timeframe.
Here are the six scenarios we considered, and why we chose scenario number four.
Given scenario number four, this is the gap we have between current financials and what we need to be confident in long-term viability, he says.
(Since next year remains uncertain and these estimates may be revised, we recommend using our Scenario Response Template.)
As Zappacosta explains, he laid everything out in the open so the company and its trusted employees would receive that information, even at a difficult time in its history.
“It’s easy to defend your values when they also support your business. The challenge is how to apply them in difficult times.” Photo by Marco Zappacosta
Marco Zappacosta, co-founder and CEO of Thumbtack
Zappacosta has already broken down some of his executive hiring frameworks in The Review (and it’s worth a read or reread). In our latest conversation, he expands on some of those same ideas and adds new pages to the playbook by pointing out some of the most common pitfalls.
To start, he points out a common mistake founders make even before setting up the first interview: greed. “When you’re looking for a role, you make a list of what you want that person to do well, and the list has 12 items. What happens is you end up hiring for a lack of weaknesses rather than exceptional strengths in a specific area, which leads to a mediocre result,” he says.
Zappacosta’s advice? Strive to define the role in terms of three specific key attributes you want it to bring and tailor your interview plan accordingly.
Always ask these two questions and dig deeper.
In almost any interview with Zappacosta, candidates can expect two of his favorite questions.
First: What professional accomplishment are you most proud of? It may sound fairly common, but it’s his approach that makes this question one of Zappacosta’s favorites.
«I ask them to explain in depth, not just say, ‘I’ve grown a lot in my career.’ I want to hear what happened at your job and why you’re so proud. I want to know what your role was and what you uniquely brought to the project,» he says. «I try to understand how ambitious this person is, how balanced they are in assigning responsibility for success within the team, and how honest they are in talking about whether it was simply the right decision or if there were challenges along the way.»
Zappacosta also avoids launching into a long list of talking points. I’m always surprised by how little interviewers probe. With the ‘Tell me about your greatest accomplishment,’ I’m not really interested in the headline. The real insights come when you dig deeper and deeper. «I’d rather spend 90 minutes on one or two topics than ask 17 unrelated questions because you think you need to cover all of them,» he says.
You get a better signal of someone’s good judgment and thoughtfulness if you get to the bottom of a thread.
Immediately following that conversation, he asks:
«What is your biggest professional regret?»
«In his opinion, the power of these two questions lies in combining them. «Usually, someone feels really satisfied with the last question because they were able to brag and dig into something they feel really good about, so this next question usually surprises people,» says Zappacosta.
He notes that the response usually goes in one of two directions. «One is that the person says, ‘Wow, there’s something that comes to mind instantly.
It’s hard to talk about; I’m not proud of it, but I’ve been able to reflect on it a lot,'» he says.
“Then we can dig deeper and talk about what they learned. I have no illusions that I’m hiring perfect people, but I want to make sure I’m hiring people who are aware of their imperfection.”
But more often than not, she gets a different response. “It’s often something like, ‘Oh, I only got a B, but I really wanted an A.
Or this was just a modest success, not a tremendous success.’ It’s just one more opportunity to brag,” she says.
“I’m really put off by those kinds of responses. It means they’re either not self-aware or they’re not confident enough to own up to their mistakes. That’s not the person I want to work with.”