You've hit a plateau you can't get past
Hiring a superstar is fine, but you want to be able to use the person. The sign is that your progress has hit a brick wall. It may be that you haven't been able to develop a certain area of sales, like corporate. Your marketing may have fallen flat, or your operations aren't up to snuff to sustain continued growth. You should have a clear view of what needs to change to get your company to move to its next level.
You're missing experience that can get you past it
What you need to get past the plateau is something that your current staff, including you, can't provide. It could be knowledge in management, design, engineering, finance, operations, purchasing, or maintenance. I've seen companies that need a more mature vice president of sales or a purchasing manager who could bring spiraling costs under control. If you're considering someone in another role, you're spinning your wheels.
The business has the financial resources to support the hire
Top talent typically comes at top rates. You either need the ongoing revenue or the invested money (with prospects of revenue to come). Furthermore, the new person has to make enough difference that the added expense is easily justified, which means you must understand how you're going to get a hefty return on the investment.
There's a candidate who might fit the bill
Lots of people have experience in larger organizations. Relatively few are at the top of their game. You need one of the latter. If you can't get one, be wary of hiring someone from the crowd. You're often better off waiting for the right fit than getting someone who technically has the credentials but lacks the spark.
You've done the necessary due diligence
Finding the difference between the true star and someone who has made the rounds is difficult. This puts a premium on due diligence. There is only so much former employers can or will tell you. Carefully check the employment timeline claimed on the potential hire's resume with news reports about and press releases from the employers at the respective times. That alone can tell you a lot. If an executive was in place for less than a few years, it's unlikely that the person really had a chance to make any significant impact on the business. And sometimes the release announcing someone's departure can be illuminating.
For example, Walmart recently replaced the CEO of its U.S. division. As the CEO of the entire company said: "From the very beginning, his vision led us to lower the cost of health care through our $4 prescription offering. And, most recently, he put us on a path to future growth with small formats and efforts that integrate digital and physical retail." Notice that strong results under his watch aren't mentioned. Combine that with financial reports that led analysts to say that performance of U.S. stores was off, and you get a good sense that the former executive couldn't make the retail operation work as expected.
Three reasons not to make the big hire
If you honestly look at yourself and your situation and find any of the following to be true, step away from the offer letter while you still can:
- You've convinced yourself that you need "world class" talent, but could not for the life of you explain the phrase to a disinterested party in a way that wouldn't sound like an ego trip.
- You'll have to lay off people needed to keep the wheels running to afford the new paycheck.
- The big hire is supposed to catch the attention of the press, which will hardly ever care whom you've hired.