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5 Tips for Hiring a CEO

Being in charge isn't easy – but neither is handing over the job to someone else. Entrepreneurs who've made the transition share their pointers.

For a determined-yet-inexperienced entrepreneur, bringing on a seasoned pro as CEO can help a company make the transition from being a scrappy start-up to being an established and respected leader in its field. But few company milestones are more fraught than the decision to hand over the reins – your reins – to someone else. Even down the road, after you have found the right person to nurture your vision, adjusting to a new role apart from the company helm can be a daunting task. Here are five steps to take in order to ensure a smooth transition.

Hiring a CEO: First, Focus on the Vision Thing

Any initial soul-searching should be accompanied by ample contemplation of long-term goals, needs, and strategies. After all, if you can't articulate your company's vision, a newcomer won't be able to, either.

Creating a road map will help identify your strengths, so that you can hire your weaknesses, says Sara Blakely, founder of the Atlanta hosiery and lingerie manufacturer Spanx. Although Blakely had ambitions to branch out into other product lines, including swimwear, she had difficulty keeping the company's current items in stock at stores after a publicity blitz that included an appearance on Oprah.

Blakely initially hired Spanx's CEO, Laurie Ann Goldman, as a consultant in 2002 to help the company manage its inventory. After six months, she asked Goldman to stay on as CEO. "She was able to fill in the gaps and make the company work as a well-oiled machine," Blakely says.

Dig Deeper: How to Set Inspirational Goals

Hiring a CEO: Engage a Second and Third Opinion

Bearing primary responsibility for choosing your own replacement will likely put you, as well as anyone who is up for the job, in an awkward position. "It's a good idea to have someone independent involved in the process," says Dora Vell, founder of Vell Executive Search, a recruiting firm in Waltham, Massachusetts. Having multiple eyes and ears will ensure that all aspects of the company's needs are addressed and that the search process is not skewed by one person's perspective.

At most companies seeking to hire an executive, the board of directors usually this role. If your company does not have a board, a senior employee or a trusted mentor can help ensure decisions aren't made rashly, says Dick Strayer, founder of Strayer Consulting, which advises startups and venture capital firms on hiring new executives.

Allowing others to aid in the vetting process also frees you to concentrate on the intangibles that others might miss. In searching for a CEO, Shelley Gunton and Brian Connolly, the founders of Castor & Pollux Pet Works, a manufacturer of organic and natural pet foods in Clackamas, Oregon, had help from the company's board and an outside recruiter, who identified candidates and conducted initial interviews. Having that screening process in place allowed the couple to focus on finding someone who shared their vision in their one-on-one interviews. "Having the board's support enabled us to move along a lot faster," Gunton says.

After a four-month search, Castor & Pollux hired its new CEO, Robb Caseria, in November.

Dig Deeper: How to Work With an Executive Search Firm

Hiring a CEO: Look for a Cultural Fit

Not even a sterling resume and ironclad references can assuage the gut feeling that someone just won't click with the rest of the company. "If a client says they don't like a candidate, 99 percent of the time, I don't push back," Vell says. "Instead I figure out why they're rejecting a candidate." If you feel a certain personal attribute is essential to the company's culture, don't be afraid to say so explicitly when dealing with an executive search firm or other advisor. Gunton and Connolly, for instance, specified that Castor & Pollux's incoming CEO should own a pet. "We wanted to make sure the candidate understood the importance of a dog or cat to somebody's family," Gunton says. "Almost everyone in our company is a pet owner."

Examining candidates' relationships to past employees and authority figures can help you identity how their personal traits might tie into their managerial styles. One effective way to do so, Strayer says, is to interview their direct reports in three previous positions. Strayer also asks candidates about their family history and relationships with figures such as college professors to gain insight into their perspectives on authority. "You find out so much about the individual this way," he says. "People's self-perceptions are often very different from what others perceive." Do be careful to know some boundaries when asking personal questions, though – even for managerial positions, discriminatory hiring practices (including judging a candidate on marital status, for example) is illegal.

Read more:

How to Hire a Star Employee

Improving Your Hiring Practices

How to Build Your Management Team

How to Hire a COO

April Joyner

April Joyner is a reporter for Inc. magazine. She regularly covers sales and marketing topics and writes on start-ups for Inc.’s "Elevator Pitch" column. She lives in Brooklyn, New York.