Every week, we will find the expert advice to help a small or medium-sized company overcome a key issue it is facing in its business.
Eric Chouinard, the founder and chief executive officer of Montreal-based Web-hosting service iWeb Technologies Inc., isn't shy to brag about his entrepreneurial exploits.
“I started this from scratch with $5,000 15 years ago, and now I'm running a $40-million company,” he says proudly.
But while he may boast about his accomplishments to date, he's also quick to admit that, if his 200-employee company is going to grow the way he wants it to, he'll need help.
Mr. Chouinard's goal is turn iWeb into a $100-million company in three to five years, “but hopefully sooner.”
While he's successfully led iWeb until now, he knows that, to get there, he'll need someone more experienced than he is to replace him at the top. “I've never run a $100-million business,” he says.
So now he wants to find a chief operating officer in the next six to 12 months who will take over as CEO in three years.
There are differences between operating a $40-million company and a $100-million one, Mr. Chouinard says. He doesn’t believe he has the skills to turn iWeb into a worldwide Internet giant.
“It's like Google,” he says. “The two founders found a guy they could trust, who had a lot of experience running a major company.”
Mr. Chouinard, who plans to remain the face and visionary of the company – though he isn't sure what his future role will look like beyond that – is getting some help in his search.
On May 4, he announced a merger of iWeb with Novacap Investments Inc., a venture capital firm. While the $47-million equity deal has given him more money to finance new operations, it also allows him to tap into Novacap's vast executive network.
However, finding the right person is about more than going to headhunters or looking through Novacap's Rolodex.
“The person needs to understand the skills of a CFO, a COO and every other executive,” Mr. Chouinard says.
Even more important, he wants to find an executive who buys into his goals, visions and values for his company, and who will share them as he or she becomes familiar with the company, learns and runs its operations, and transitions into the top role.
“I could use all the help I can get to find the right candidate,” Mr. Chouinard says.
If he makes a mistake, the consequences could be detrimental. “It’s the top manager,” he says. “If I choose wrong, it won’t be good for the company’s destiny.”
The challenge: How can Mr. Chouinard find the right candidate as chief operating officer and eventual CEO?
THE EXPERTS WEIGH IN
Chris Arsenault, managing partner at Montreal-based venture-capital firm iNovia Capital
He was smart to partner with a venture capital firm. VC firms already have relationships with CEOs and other people that growing companies need to attract. But Eric needs to be aware that they will be playing a very active role in the search process. So he needs to make sure his vision is clear and define his role in the company.
Don’t bring in a CEO at a $50-million size company without that person having been there, done that. You can bring in someone from new industries, but they need to have experience, a strong chemistry with the founder and a clear understanding of roles.
He also needs to be in the right state of mind, which he seems to be, but he has to be able to self-evaluate himself and the company and think about what type of person he needs to achieve more success.
Mario Patenaude, Halifax-based senior manager at Deloitte Human Capital
The first thing he needs to do is define his role. When there’s no clarity, things go sideways. There are firms that specialize in role definition. It starts with understanding the role Eric has played and understanding his business plan or strategy. Then he needs to decide what he wants to be accountable for and what part of the job he can leave to his successor. When the “role profile approach” is completed, you can look at a candidate and measure him or her against that role.
Always look internally for candidates. There’s less risk with an internal candidate because they have already built relationships. There is a tradeoff. The person may not have the all the competencies on his side, but it’s less risky because they know the culture and relationships are highly regarded.
When looking outside, don’t oversell. If you do, you’ll raise expectations, and the career opportunity may not look as attractive when they’re in the job. The key is to undersell, make the job look worse.
Brian Scudamore, founder and chief executive officer of 1-800-Got-Junk? LLC , Vancouver
I’m in the middle of hiring a new COO and I’ve hired ones in the past. It’s important to find a person who’s aligned with the vision of the entrepreneur. I had a situation where my COO didn’t believe in my vision for growth and we became disconnected. This time, I’ve shared my two-page vision of what the company will look and feel like to the end of 2014. This is where we’re going to go and it’s not up for debate.
You need to spend a lot of time with the candidates, and find out if it’s the right fit for the company and the entrepreneur. We went for drinks and dinner, and even breakfast on many occasions. He came to head office and spent time with the leadership, we sent him out on our trucks with three different franchise partners. It’s similar to marriage, but in marriage you date and get to know each other. Bring on a new executive and you have to dive into marriage. That can be tricky so spend enough time in the courtship phase.
THREE THINGS IWEB SHOULD DO NOW:
Come up with a clear idea of what you want to do and what the new top executive will handle when you hand over the CEO role; that will help you know who you’re looking for.
Build a relationship
Spend lots of time with your candidate. That could mean weeks or months of getting to know your replacement. The person might look good on paper, but if he or she isn’t the right personality fit – for your company and yourself –it won’t work.
Make sure your vision is shared
If you want to stay on as the face of the company, you have to make sure the potential executive will adhere to your vision.
Special to The Globe and Mail
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