In 2012, Jaclyn Johnson founded Create & Cultivate, a media company that educates and inspires women to succeed in business.
By 2018, Johnson had grown Create & Cultivate to eight employees when an acquirer offered her a staggering $40 million. Unfortunately, the deal was too good to be true. When the acquirer discovered how dependent the business was on Johnson to succeed, they pulled out.
A few years later, Johnson signed an acquisition offer from Corridor Capital for $22 million. While still a lucrative deal, it was a significant decrease from the original offer.
Like Johnson, if your company becomes dependent on you, it may end up costing you down the road. The most valuable companies don’t rely on the owner’s involvement to succeed. However, finding extraordinary talent to replace yourself can be challenging.
Finding a general manager, second-in-command, or Chief Operating Officer to replace themselves is one of the hardest projects founders may ever tackle.
Whether you rely on a recruiter, paid advertising, or your personal network to find candidates, one of the first steps to shortlisting talent is a comprehensive review of their background. That’s when many founders make the common error of being bamboozled by a Fortune 500 name on a resume or LinkedIn profile. While a stint at a big company may be impressive, the skills held in high regard at a Fortune 500 company tend to differ from what most privately-held companies need.
Big companies often have well-established processes, systems, and hierarchies that have contributed to their success. People that thrive in big companies tend to excel at winning within a predetermined framework. However, in a privately-held, scrappier start-up, there is no framework to follow, which is why big company veterans often struggle in a more entrepreneurial environment.
Instead of basing your hires off an impressive name on a resume, look for someone innovative, comfortable with chaos, action oriented, and creative—someone with an entrepreneurial mindset.
Here are five strategies you can use to identify innovative candidates when making hiring decisions:
1. Look for problem-solvers
Innovation often involves finding creative solutions to problems. Look for candidates that have demonstrated the ability to think strategically and come up with innovative solutions to challenges they have faced in the past.
2. Ask about their approach to problem-solving
During the interview, ask candidates to describe their approach to problem-solving and how they have produced innovative solutions in the past. This will give you insight into their thought processes and willingness to take risks and think creatively.
3. Evaluate their learning agility
Innovative employees are often those that are open to learning and adaptable. Look for candidates with a history of taking on new challenges and learning new skills.
4. Assess their ability to work in teams
Innovation often involves collaboration, so look for candidates that have demonstrated the ability to work effectively in teams. Ask about their past experiences working in teams and how they have contributed to the success of those teams.
5. Consider their creativity
Look for candidates that have a creative portfolio or have pursued creative hobbies or projects outside of work. This can be a good indicator of their potential to bring new and innovative ideas to your organization.
Right now, your company probably relies on you for a healthy dose of creativity and innovation. But if your goal is to replace yourself, following these five strategies can increase your chances of identifying innovative candidates that will bring fresh thinking, creativity to your organization, and enhance your business’s value once you’re ready to exit. Another consideration, once you find the proper successor to run your business is to consider incentive plans for them, giving them ownership, even phantom stock can be very motivating.