Episode #1018: Family-owned businesses are likely to be the oldest form of a business organization. In these businesses, the entrepreneurial spirit changes over its inheritance through generations and the need for external executive talent is common. When hiring new CEOs or executive leaders, the business must ensure that not only the new hire is qualified and experienced, but also able to merge well with the pre-established culture and values of the company. Host of the Arete Coach Podcast, Severin Sorensen, covers these topics and reviews his scientifically proven 10-step strategy for hiring new executive talent.
About Severin Sorensen
Severin Sorensen is a serial entrepreneur and lifetime learner with a passionate curiosity for people and businesses. Severin is the CEO of ePraxis LLC, a premier level retained search firm that provides executive headhunting, talent selection, and executive coaching. In addition to finding top talent, Severin has provided over 7,500+ hours of paid executive coaching to entrepreneurs, CEOs, Presidents, and C-level executives. Severin is an ICF ACSTH Certified Executive Coach, Certified Organizational Development Coach, and Certified Life Coach. Severin is the founder/producer of a new podcast, Arete Coach, that explores the art and science of executive coaching with some of the industry's best coaches.
From 2010-2018 Severin was also a Vistage Chair where he coached three CEO and key executive groups. In 2011, Severin received the "Rookie of the Year Chair Award" from Vistage. Since 2013, Severin has added international speaking for Vistage, CEO conferences, executive peer groups, and corporations on the topic of identifying and hiring difference-making top talent.
After graduate school, Severin moved to Washington, DC, where he worked on security-related economic and public policy issues that included a brief stint in The White House, as a Special Assistant to the President, for George H. Bush (POTUS 41). In 1994, Severin founded Sparta Consulting Corp., and Sparta provided world-class physical security and safety related management consulting services for public and private sector entities. From 1994-2002, Severin managed HUD's Crime Prevention Through Environmental Design technical assistance and training program. In 2005, Severin sold Sparta to Westec Interactive (Digital Witness), that was subsequently acquired by Interface Security.
Severin, a native Californian, grew up in Salt Lake City, UT and graduated with honors from the University of Utah with Economics and Political Science degrees. He completed graduate studies in economics at King's College, Cambridge University (England), where he earned a M.Phil. degree in Economics. Severin has a great love and appreciation for sports, and while overseas, Severin rowed for the King's College Boat Club, and played basketball for the Cambridge University Basketball Team (1986-87).
Watch the podcast
Click here to listen to the podcast, or click below to view the podcast outline and transcript:
Defining the family-owned business
Severin begins by describing what the family-owned business is and reviews examples of family-owned businesses that are particularly successful in both the American and global economy. We also learn that small family-owned businesses account for 19% of all businesses in America. The impact of these businesses is great on both the availability of employment and the overall economy. Major family-owned businesses mentioned by Severin include: Wal-Mart, Marriott, and Samsung.
The entrepreneurial spirit
In family owned businesses, the entrepreneurial spirit is passed on from one generation to the next. Different generations grasp onto this attitude differently. In a report by BusinessWeek, 40% of family-owned businesses in the US are passed down to the second-generation. However, only 13% are passed down to the third-generation successfully. Severin attributes this to a multitude of factors relating to family relationship and childhood experiences, but also states that the “entrepreneurial drive that rides with the first generation” can “gradually” dissipate as it is experientially inherited.
Severin’s experience hiring executives
Severin shares his experience working with a family-owned company that was searching for a CEO who would also mentor the next generation of family business leaders. In this business, a husband and wife operated a “residential construction industry business.” The business grew and grew until the untimely loss of the husband. The wife was left to operate the business on her own, and decided that hiring a CEO would be most beneficial for her children and the future of the company. Because of this, she contacted Severin through his organization, ePraxis, to begin the search for new executive talent.
The ten step process of executive hiring
After Severin shares the story of the family-owned business in need of a CEO, he explains each of the ten steps in his executive hiring process. Step 1 involves collecting requirements and preparing advertisements. Step 2 includes a detailed behavioral position description. Step 3 requires preparation of the current job marketplace. Step 4 entails an automatic applicant tracking system. Step 5 is the sourcing stage where executives who are, or are not, currently looking for jobs are scouted on the base of experience and excellence. Step 6 is the first cut of candidates. Step 7 includes psychometric testing and panel interviews. Step 8 requires applicants to prove their past work skills by turning in multiple documents showing a variety of identified characteristics. Step 9 calls for final interviews and in-person meetings with stakeholders and family-business leaders. Lastly, step 10 is contract and compensation negotiation.
The human aspect of executive selection
When deciding what executive to hire, it is essential that stakeholders and business leaders spend one-on-one time with the prospective hire. By doing so, company leaders are better able to get to know the job applicant and attest to their goodness of fit (or lack thereof) for the applied position. These face-to-face meetings can be in transportation, over meals, and across from the business meeting room.
At the end of this podcast, Severin introduces his executive selection company, ePraxis. ePraxis seeks to find the best talent for an organization in the best timeframe possible. By doing the statistical work for you, ePraxis enables organizations to focus their attention on other current challenges.
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