Hiring corporate Executives

I think Corporate background executives add a huge amount of value to any organisation they join.

Typically they have the right pedigree from famous universities, they also usually have MBAs and several years of experience in organisations where management is crucial and they know how to navigate complex stakeholder situations with finesse.

But. And theres always a but, with these things.

I personally feel that corporate executives are also a double edge sword. To be clear, entrepreneurial executives also have failings, just different ones and thats a topic for another day.

If you’re a pre-product market fit company, where speed and agility are key to survival, and you’re often under resourced and trying to find raise, Corp-exec is going to be a massive cost (either in equity or salary) and likely they’ll be unlikely to get their hands dirty, so they they’ll cost even more as you need to hire staff to support the corp-exec, on the other hand, that polish and strategic thinking is going to look good for investors and help give a young team confidence.

As your company gains traction and closes the gap to profitability, you’ll find that you’ll need a management layer, people who know how to manage teams and departments to ensure alignment and progress, again corp-execs can fill this role for a high cost. I personally think this is around the time that corp-execs start to become valuable for a business, but this stage may still be slightly too early given the cost and the need for the company to still be very dynamic and conserve resources. At this stage you need to find corp-execs who can get their hands dirty and do the work even if there are no subordinates, you want corp-exec who have capabilities, rather than the kind of corp-exec profile who is basically a professional people manager. 

Once your business is post-series A and beyond, there’s clear product market fit, theres clear traction and growth and the focus is on expansion, then I think professional managers become important, at that scale you’re dealing with teams of more than 5 people and multiple teams, alignment becomes an issue and thats where the professionalism of corp-execs really starts to show through. At this level, you need to change out of sweatshirts and into professional attire to be taken seriously. 

In summary – Corp-execs are a valuable but expensive asset suitable for later stage startups where organisational management requires politicians to ensure resources are managed effectively. Hire corp-execs too soon and they can be an expensive white elephant due to how hands-on senior staff need to be in early stage startups.

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