How to Identify and Attract Individuals Who Could Succeed a Leader Wishing to Step Back?
The first step is to understand the context in which the recruitment takes place to define selection criteria. The following questions need to be asked: What type of operation is it? Is the outgoing leader planning to completely leave his functions or to take a step back while maintaining an operational or strategic role? Depending on the answers, the ideal profile of the future leader varies.
In the case of a business acquisition with an outgoing leader wishing to sell his shares, the ideal candidate must have a strong SME culture, a good understanding of the industry, and above all, a desire to invest and undertake!
If the context involves a leader intending to step back while retaining an operational dimension, which is quite common, or to take a higher-level role with less operational involvement, the recruitment needs to be adapted to ensure complementary skills.
To attract these profiles, it is important to note that in LBOs, MBIs or other operations linked to investment funds, the future leader has the opportunity to undertake without taking maximum risks. It is an opportunity for an SME professional to thrive in leadership roles without, for example, mortgaging his house.
Another important element in identifying a future leader is the assessment of management committees. Through audits of management committee members, potential for growth is observed, and it is determined if an internal candidate can take the number one position. To enhance its support in these aspects, Tillerman Executive Search relies on experts specialized in assessment.
What are the Main Criteria to Consider When Identifying a Leader to Succeed an Entrepreneur?
In collaboration with an investment fund, it is important to minimize risks during the recruitment. The future leader must have significant sector knowledge and know how to manage a complete P&L. Beyond technical skills, mindset and soft skills are also crucial.
In SMEs and mid-sized companies, the leader must possess entrepreneurial qualities. They must have strategic vision and operational skills and not be afraid to get their hands dirty. This wide range is essential because in an SME, you might arrive in the morning not knowing what your schedule will be due to constant unforeseen events. This environment requires a high capacity for adaptation and reactivity. Another crucial aspect: leaders must be ‘cash-oriented’ because liquidity is vital for the survival of an SME.
How Do You Assess a Candidate’s Fit with the Company Culture?
This crucial step requires meticulous work before recruitment. It involves discussing with the fund and the SME to deeply understand the cultural stakes and values of the company. Visiting the site, interacting with the management committee, and analyzing sector-specific requirements are good practice to understand the company environment and challenges. Only from this analysis is it possible to define a typical profile for the leader to recruit, including personality traits and values.
Next, it’s about identifying candidates who will have the ability to meet these prerequisites.
How to Ensure a Smooth Transition Between the Outgoing and New Leader?
The transitional period is not automatic. There can be a transition with both leaders in command, but sometimes there isn’t. Ideally, there should be a transition. I would add that this period should be rather short. Sometimes, the outgoing leader struggles to relinquish responsibilities, which can cause issues regarding responsibility sharing and the new director’s autonomy.
It is preferable to set precise deadlines in advance and clarify the division of responsibilities. Everyone must adhere to the rules defined from the start.
If the outgoing leader chooses to stay by taking on strategic responsibilities, such as sitting on the supervisory board, it can be an asset, provided everyone respects his boundaries. This way, the new leader can benefit from the former’s perspective and history, who knows the environment well and can occasionally help with strategic issues.
One of the transitions I accompanied with Initiative & Finance aligns with this dynamic. For an SME in the pharmaceutical display sector, we were tasked with recruiting a new leader while the former wished to take a step back while remaining a shareholder and sitting on the supervisory board. Mission accomplished! We recruited a talented leader whose profile perfectly matched the former’s. Both played their roles well, and the transition went smoothly.
How can your firm, besides recruiting a leader, support a fund like Initiative & Finance in structuring management committees and recruiting C-level executives such as CFOs, COOs, Purchasing Directors, etc.?
Indeed, I have recently been involved in recruiting members of the management committees of Initiative & Finance’s participations. It is a tripartite reflection.
At Tillerman Executive Search, we are eight partners, each with our specializations, which allows us to offer comprehensive support. We have an expert in banking, finance, consulting sectors, another in legal and compliance, another in IT, digital, and consulting, etc. For my part, I specialize in the ‘industry, service, distribution’ sector. This organization is a real advantage for specialized recruitments. For example, I recently handed over the recruitment of IT managers to the partner leading the IT sector for a company for which I had recruited the CFO.
This multidisciplinary expertise allows us to cover varied needs across different sectors, regardless of the company size: from CAC40 companies to SMEs.
My advice for recruiting C-levels as for leaders: meet, exchange, observe the needs by visiting the site. In environments linked to private equity funds, C-levels must also have this entrepreneurial mindset, the SME spirit, and a cash-oriented vision.
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