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Spoke to the founder / CEO of a wildly successful now-public (former startup) company about his exec-level hires. He confided that 1/3 of executives were net p

Spoke to the founder / CEO of a wildly successful now-public (former startup) company about his exec-level hires. He confided that 1/3 of executives were net positive (i.e. should retain), 1/3 were net neutral (i.e. should be fired) and 1/3 were net negative (i.e. separate ASAP!). Gentleman also indicated that his peers on similar trajectories were even less successful at exec hiring. So there's a point of anecdata for you: "Good" at exec hiring might just be a 33% success rate. YMMV.

leaflets2 4y ago
Sounds as if he did not fire the 33+33% ? The board or the investors wouldn't have liked that? (Or why not)
- devmunchies 4y ago
  usually there are lawyers involved when hiring a c-suite and there are negotiations and contingencies. if you fire a c-suite you might have to send them off with a lot of cash and/or legal fees. it might even cause a little stir in the public image and hurt the stock or investor perception. It might be cheaper or less of a headache to just work around them. one of the better scenarios is to have a candid, open conversation about their offramp and give them a couple quarters to find a good spot somewhere else and then they "resign".
creaghpatr 4y ago
As long as you can identify which are which quickly and action then 33% hit rate can stack your roster pretty quick. Hiring takes time though, in most cases.
- etempleton 4y ago
  Hiring takes time and not having people in roles can be worse than a mediocre performer and sometimes worse than a bad performer who generally gets the job done.
- etempleton 4y ago
  Sounds simple, but C suite executives have a high profile, high turnover at the C suite can spook the board, investors, etc. you don’t want too much turnover.
- acdha 4y ago
  It also takes time to see results: the higher up the ladder, the more the work is second or third order effects which take time to show up. If I hire someone to be a JS grunt, I’ll know very quickly if they can make a CRUD form because their job is to produce tangible assets which are immediately usable. In all but the most extreme cases, it takes months to years to tell whether a C-level hire is making good decisions, policies, hires, etc. and repairing the damage can be a substantial amount of work in its own right.
_8j50 4y ago
It's like any employee, vitality curve and all. The top 10-20% are responsible for 90-80% of positive results and the bottom vice versa while everyone in betweek keeps the boat afloat.
q7xvh97o2pDhNrh 4y ago
That seems unsurprising. It reminds me of that bit from one of Ben Horowitz's old articles [1]: > Things go wrong, because building a multi-faceted human organization to compete and win in a dynamic, highly competitive market turns out to be really hard. If CEOs were graded on a curve, the mean on the test would be 22 out of a 100. This kind of mean can be psychologically challenging for a straight A student. It is particularly challenging, because nobody tells you that the mean is 22. [1]: https://techcrunch.com/2011/03/31/what%e2%80%99s-the-most-difficult-ceo-skill-managing-your-own-psychology/ https://techcrunch.com/2011/03/31/what%e2%80%99s-the-most-di...
- BeFlatXIII 4y ago
  This reminds me of how one of the most disorienting feelings is when you've taken five steps on a journey of self-improvement. Miles ahead in the distance, you see your inspirations. Looking back, you see that those first five steps already put you in the 99.95th percentile of all humanity.
gnicholas 4y ago
For the second two categories, did he think they should fire/fire immediately and promote within? Or hire externally again?
etempleton 4y ago
I would say this is true of almost any position. Ask any manager and they will probably say this is usually how it shakes out. 33 percent of hires are A players, 33 percent are B players, and 33 percent are C/D/F players. It is grading on the curve. An A player at one company might be a B player at another. If someone is an excellent CxO they are probably a good candidate for a bigger and better company or the CEO job somewhere else and so will leave after some time unless given large incentive to stay or otherwise have reached their career ambitions.
- PeterisP 4y ago
  Thing is, in many job positions "A players" add a lot of value, "B players" add reasonable value, and "C players" still do some useful work, it's only D- that are worthless. However, for CxOs the dynamic is as the grandparent post mentioned, that mediocre CEOs add trivial value and the weak CEOs are actively harmful; so the expected tolerance to B-players should be quite different.
sorry_outta_gas 4y ago
The rings true, most of the problems I've seen tend to come from a CEO who refuses to get rid or fails to notice the poor ones though
vaidhy 4y ago
I think a lot of people fall for this kind of fallacy (no offense meant to your acquaintance). 1/ You really cannot grade absolute values on a curve. As others have pointed out, your A players are only in comparison to others in your team. Maybe they are actually C players, who knows? Maybe they are A players only in the environment you created etc, etc.. 2/ And a more important point is that a lot of work is being done by people that are not A players. Whom I would call net positive is only in relationship to what I can measure. I know of many people in my team who were not exceptional at software, but got things done due to building relationship with other teams, ability to see things to completion etc. I think Amazon fell into the trap that only type A personalities get things done and I see it in other places too. It is easy to see the extremes, but a lot of times the glue that holds things together is almost invisible. It is hard to gauge value and I personally am refusing to judge anyone (to the extent possible).
- beambot 4y ago
  Projecting the exec's effectiveness onto the exec (e.g. "A/B/C Player") is woefully unfair, and my acquaintance & I would never intentionally suggest otherwise. Their effectiveness (positive, neutral, negative) is determined by a great many factors outside the individuals control -- e.g. company's size, growth rate, org structure, personnel, industry, etc. The exec's success or failure isn't an indictment of their abilities, just that they're (in)effective in this organization at this particular moment in time. It's on the founders / CEO to recognize this, manage expectations, continuously communicate, and ultimately to force a transition if necessary. Luckily, most execs know the score. This is also why exec's have such generous exit packages: both parties can admit they made a mistake & separate amicably.

leaflets2 4y ago

Sounds as if he did not fire the 33+33% ? The board or the investors wouldn't have liked that? (Or why not)

devmunchies 4y ago
usually there are lawyers involved when hiring a c-suite and there are negotiations and contingencies. if you fire a c-suite you might have to send them off with a lot of cash and/or legal fees. it might even cause a little stir in the public image and hurt the stock or investor perception. It might be cheaper or less of a headache to just work around them. one of the better scenarios is to have a candid, open conversation about their offramp and give them a couple quarters to find a good spot somewhere else and then they "resign".

creaghpatr 4y ago

As long as you can identify which are which quickly and action then 33% hit rate can stack your roster pretty quick. Hiring takes time though, in most cases.

etempleton 4y ago
Hiring takes time and not having people in roles can be worse than a mediocre performer and sometimes worse than a bad performer who generally gets the job done.
etempleton 4y ago
Sounds simple, but C suite executives have a high profile, high turnover at the C suite can spook the board, investors, etc. you don’t want too much turnover.
acdha 4y ago
It also takes time to see results: the higher up the ladder, the more the work is second or third order effects which take time to show up. If I hire someone to be a JS grunt, I’ll know very quickly if they can make a CRUD form because their job is to produce tangible assets which are immediately usable. In all but the most extreme cases, it takes months to years to tell whether a C-level hire is making good decisions, policies, hires, etc. and repairing the damage can be a substantial amount of work in its own right.

_8j50 4y ago

It's like any employee, vitality curve and all. The top 10-20% are responsible for 90-80% of positive results and the bottom vice versa while everyone in betweek keeps the boat afloat.

q7xvh97o2pDhNrh 4y ago

That seems unsurprising. It reminds me of that bit from one of Ben Horowitz's old articles [1]: > Things go wrong, because building a multi-faceted human organization to compete and win in a dynamic, highly competitive market turns out to be really hard. If CEOs were graded on a curve, the mean on the test would be 22 out of a 100. This kind of mean can be psychologically challenging for a straight A student. It is particularly challenging, because nobody tells you that the mean is 22. [1]: https://techcrunch.com/2011/03/31/what%e2%80%99s-the-most-difficult-ceo-skill-managing-your-own-psychology/ https://techcrunch.com/2011/03/31/what%e2%80%99s-the-most-di...

BeFlatXIII 4y ago
This reminds me of how one of the most disorienting feelings is when you've taken five steps on a journey of self-improvement. Miles ahead in the distance, you see your inspirations. Looking back, you see that those first five steps already put you in the 99.95th percentile of all humanity.

gnicholas 4y ago

For the second two categories, did he think they should fire/fire immediately and promote within? Or hire externally again?

etempleton 4y ago

I would say this is true of almost any position. Ask any manager and they will probably say this is usually how it shakes out. 33 percent of hires are A players, 33 percent are B players, and 33 percent are C/D/F players. It is grading on the curve. An A player at one company might be a B player at another. If someone is an excellent CxO they are probably a good candidate for a bigger and better company or the CEO job somewhere else and so will leave after some time unless given large incentive to stay or otherwise have reached their career ambitions.

PeterisP 4y ago
Thing is, in many job positions "A players" add a lot of value, "B players" add reasonable value, and "C players" still do some useful work, it's only D- that are worthless. However, for CxOs the dynamic is as the grandparent post mentioned, that mediocre CEOs add trivial value and the weak CEOs are actively harmful; so the expected tolerance to B-players should be quite different.

sorry_outta_gas 4y ago

The rings true, most of the problems I've seen tend to come from a CEO who refuses to get rid or fails to notice the poor ones though

vaidhy 4y ago

I think a lot of people fall for this kind of fallacy (no offense meant to your acquaintance). 1/ You really cannot grade absolute values on a curve. As others have pointed out, your A players are only in comparison to others in your team. Maybe they are actually C players, who knows? Maybe they are A players only in the environment you created etc, etc.. 2/ And a more important point is that a lot of work is being done by people that are not A players. Whom I would call net positive is only in relationship to what I can measure. I know of many people in my team who were not exceptional at software, but got things done due to building relationship with other teams, ability to see things to completion etc. I think Amazon fell into the trap that only type A personalities get things done and I see it in other places too. It is easy to see the extremes, but a lot of times the glue that holds things together is almost invisible. It is hard to gauge value and I personally am refusing to judge anyone (to the extent possible).

beambot 4y ago
Projecting the exec's effectiveness onto the exec (e.g. "A/B/C Player") is woefully unfair, and my acquaintance & I would never intentionally suggest otherwise. Their effectiveness (positive, neutral, negative) is determined by a great many factors outside the individuals control -- e.g. company's size, growth rate, org structure, personnel, industry, etc. The exec's success or failure isn't an indictment of their abilities, just that they're (in)effective in this organization at this particular moment in time. It's on the founders / CEO to recognize this, manage expectations, continuously communicate, and ultimately to force a transition if necessary. Luckily, most execs know the score. This is also why exec's have such generous exit packages: both parties can admit they made a mistake & separate amicably.