Life of a CEO Search Part 1: Inside vs. Outside
Austin Lin
2 Posts


Hi everyone, Austin S. Lin here, Past Chair (2020) of the ASQ Board of Directors. I thought I’d share behind the scenes work on hiring a non-profit CEO, share some of the processes we went through in an unprecedented year in 2020 and share some lessons learned from the process.
 

// Inside or Outside?

This is invariably the question that all Search Committees are faced with. 

Once a Search Committee is formed the next question is whether or not we engage with an external search firm or use an internal process to hire our next CEO.

The trade offs are cost, time needed for the process and effort hours of our Volunteer ASQers (member leaders) and Full Time ASQers (HR and communications resources, administrative resources).  What we’d gain from the dedicated resources of a third party agency would have to be balanced with the costs of such agencies, which typically charge 25 - 25% of the CEO’s annual salary for their fees.  In many cases, this ends up being money well spent given the depth of the process and the full time focus of an outside partner to run the logistics.

We knew we had financial transparency, ASQ culture and member value acceleration ahead in the Society’s future so we knew we’d have to vet candidates in a quantitative way to find the right leader for the right set of circumstances.

Instead, looking at all the Society was going through, we decided now would be just as good a time as any to re-evaluate our internal formal CEO hiring process. 
 
This was easy because, oh by the way, we didn’t have a formal process. Our past CEO hires had relied on search firms and we saw this as a chance to make some impactful change to the process, the criteria as well as put in a process for the future (which we hope we won’t need for some time).

Ultimately, we found that a third party search firm would be a great fit if we had solid definitions in place and a relatively stable organization to grow upon.  Being we were challenging ourselves to climb out of a recurring budget deficit and had nuanced cultural advances to pursue for both Volunteer and Full Time ASQers, doing the heavy lifting ourselves made the most sense.

Here’s how the comparison pros and cons broke down in our evaluation.

External Search (hiring third party firm to lead search efforts)

Pros:

  • Dedicated for-hire candidate resource (vs. using volunteer time)

  • Faster end to end process from screening, selection, interviews, and hiring

  • Established candidate pool to draw from as baseline

  • Good for stable organizations not undergoing drastic structural or cultural change

 

Cons:

  • Executive Search firms charge anywhere from 25-35% of CEO final salary plus additional fees 

  • Search criteria and process may not be specific enough to cultural needs of the org

  • Some search firm processes are largely qualitative, not quantitative in evaluating candidates

  • Interview questions may be too general to effectively evaluate candidates’ fit for current state ASQ

 

Internal Search (using an Search Committee formed of ASQ leaders)

Pros:

  • Understands specific details and nuances of ASQ present environment

  • Direct comparison of candidates’ abilities to ASQ culture, including conflict of interest

  • Highly customized interview questions relevant to ASQ’s current environment with ability to tailor to next 3+ year horizon

  • Primary cost to ASQ is volunteer time and effort

  • Quantitative evaluation of candidates specific to ASQ’s needs

 

Cons:

  • Overall turnaround time will be limited to the committee's scheduling availability (especially in a year when our Full Time ASQer HR position was vacant).

  • Additional effort to revise interview questions 

  • Additional effort to calibrate interviewers and arrive at consensus on ratings

 

Next post, I’ll talk a little more about the Search Committee itself, the candidate pool we received for this search, and some lessons learned.

 

Cheers,

Austin
Past Chair (2020), ASQ Board of Directors

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