Editor’s note: Jeff Markowitz is a partner at Greylock Partners where he focuses on managing executive talent relationships both in and outside of the portfolio.
You have been searching for months to find the perfect fit for a much-needed senior executive at your company. You’ve interviewed countless candidates, been through hours of meetings, and finally, after all the hard work, you think you have found “the one.” So why did you get turned down after you made the offer?
In my career recruiting senior-level executives for some of the top-performing technology companies, I have seen these companies make the same mistakes that inevitably short-circuit the executive recruiting process and end up producing the dreaded, “Thanks, but no thanks.”
I work closely with our portfolio of companies to help build their teams. Here I’ll outline the process I share with our companies to make sure that when the time comes, they increase their chances of hiring the right executive candidate.
The Fundamental Principle
The principle behind making a successful executive offer is simple: Never make an offer until you are 100 percent sure that the person is going to accept.
How can you be sure a candidate is ready to accept? You can’t be sure until they are sure. And in order to know whether someone is ready to accept, you need to understand why they might be considering the job, and what might cause them to refuse.
Pushes and Pulls
The best candidates are typically situated in attractive positions with strong and compelling incentives to stay. Why should they even consider your offer? The answer will always be a combination of “pushes” and “pulls.”
Every candidate will have a number of things they’re dissatisfied with at their current job that are pushing them away, as well as things they find attractive about the new job. They may or may not talk openly about the pushes, but if you listen carefully, you can get a good sense of what they might be. You will also want to find out what is pulling them toward your company. These “pulls” are often intangible things such as a desire for intellectual stimulation, opportunities for personal growth, a bigger ocean or smaller pond to swim in, and so forth.
Understanding What’s at Stake
Regardless of the pushes and pulls, when a candidate thinks about joining your company, they are confronting uncharted territory which comes with a whole slew of questions, doubts, and uncertainties. You need to uncover and resolve these questions throughout the recruiting process — way before the offer is made.
Let’s say that a very desirable candidate is mulling over a number of issues. Some are personal questions involving relocation, spousal employment, children and family. Others are business-related concerns about role clarity, team dynamics, and the historical and future market performance of the new company.
I’ve seen many enthusiastic companies jump up and make an offer before they really qualified whether the candidate wants the job. They think, “Why not? We like them. What do we have to lose?” But if you make an offer too early, you’re liable to lose the person you want.
It’s important to make sure that your executive candidate has a chance to visit and resolve each of their concerns. This process will unfold over several weeks in a series of face-to-face conversations. For example, most people thinking about joining a startup will have concerns about the market performance of the new company. A skillful recruiter will surface these concerns as soon as possible. Having frank discussions with the candidate about the historical and future market performance of the company will enable the candidate to make a decision from a point of strength. People are often more willing to take a risk when they understand precisely what the risk is.
There are two more turning points in the recruiting process that can put all your hard work at risk. Two of the trickiest parts of the executive offer process are when to start talking about compensation and when to ask them if they are ready to join your company.
The Compensation Trap
One of the biggest mistakes companies make is to start talking about compensation too soon. Remember, you want to give the candidate an opportunity to get resolution for each of their issues throughout the process. From the moment you bring up your formal offer, this will become a predominant focus in the candidate’s mind. You will complicate your chance to clear up any of the other issues. Even though the candidate may seem pleased with the terms of the compensation, they could still be carrying a backlog of uncertainty around other issues. And so they may very well end up declining your offer because their other concerns have not been addressed.
The problem is, of course, that in order to talk about compensation, you must have a clear picture of the person’s situation. In other words, you need to have thought hard and accurately about their needs in advance. So while you don’t want to discuss specifics around compensation until the very end of the process, it’s advantageous to understand the candidate’s general compensation needs right from the start.
For this reason, I rarely broach the subject of compensation until I’m sure that all of the other issues have been fully resolved. Then at the very end, just before making the offer, I like to give the candidate a sense of where the compensation will probably come down. But this is always my last stop.
If you’ve been developing a sense of the candidate’s situation all along, you’ll know what the compensation package has to look like by the time you get to the formal offer. Just make sure this is the very last thing you discuss. It has to be the finishing touch.
Is the Candidate Ready to Join?
You’ve worked through all the candidate’s issues, and now you’re ready to make an official offer. This is the most delicate part of the process.
It may seem counterintuitive, but when you get to the end of the process, don’t just jump to make the offer. Instead ask them: “Are you ready to join the company, assuming the offer is the right one?”
If the person can’t look you in the eyes and say “Yes,” you have more work to do.
You may be thinking, “We’ve run a thorough process. Why can’t we just make the offer?” Because at this stage, the candidate knows in their heart if they’re going to accept. If they hesitate, it means something is wrong. If you make the offer now, they will probably turn you down. This is your last chance to ferret out any lingering hesitation.
I recommend conducting this conversation in person. Keep your eyes open for tell-tale signs that something is off. I’ve seen candidates say, “Oh yes, absolutely, I’ll accept,” but then their eyes shoot to the side. If their eyes flicker or they say, “Yes, but…,” you can be sure there’s some issue that hasn’t risen to the surface yet. A candidate who is ready to close will display a high level of enthusiasm and commitment. If they hesitate, you need to backtrack and figure out the source of their reluctance.
Once you have full confidence that you have addressed all the outstanding issues, you can go ahead and make the formal offer. At this point, the candidate should already be convinced that you fully understand their compensation needs, and that the package will be one they can accept.
These are some of the techniques I have used to help companies build world-class executive teams. Of course these are delicate processes/conversations, and each often requires a unique approach. But, by following a disciplined process, you can avoid the mistake of making the offer before you know the candidate will accept it.