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University of Massachusetts Amherst

Family Business Center

How to Find the Right Outside Manager

by Shel Horowitz

After many years at the helm, you've decided you need an outside manager. But bringing one in is a challenging task with major ramifications for your business. Harvey Wigder, of Fulcrum Resource Group, Inc., had some pointers for FBC's October attendees.

“Only 25% of CEOs who bring in an outside general manager are happy with the person they hire. There are many reasons for these failures. They boil down to the wrong person being hired or difficulties in working out relationships between two strong personalities with different kinds of experience. In some cases, owners who were committed did it again, and usually learned enough to succeed on the second try.”

Wigder cited one success story: an entrepreneur who took over his father's business at $200,000 in revenues and grew it to $8 million. “He knows everyone in the industry, purchased every machine in the shop, and controlled every aspect of operations. He was not trained in management or delegation.. He was strong willed, self-reliant, impulsive and used to making immediate commitments for the business. For someone like that to hire a strong executive is more than hiring a machine and plugging it in. Although this search was very successful, this person continues to be challenged to learn a new set of management skills.

“When I started working with him, he asked why would someone want to work for a rinky-dink $8 million company like mine. Eventually, he hired a very well trained engineer and manufacturing manager from a $100 million plus public company who was looking for a job because he felt his company was unethical and undercutting. He was ready for a change. When you hire, don't think that other people won't see the challenges your business faces. You might be able to hire someone with excellent skills and background to go on that journey with you. Retaining the person is a new challenge. You have to talk the talk, walk the walk, accommodate” to the new manager's methods.

“If you're hiring an executive who's is an accomplished manager, has run a business, knows marketing, accounting - that person has invested their career in learning their profession, and in the results they've achieved. They come to your business because they see an opportunity for themselves. You and that person have to learn to work together to make the hire mutually beneficial.

Owners who hire successfully understood that their businesses would change as a result of hiring someone: with new skills and ways of doing things, and that accommodating someone new would be difficult for them. Because of that, some people stopped going into their office to give the new executive time to build relationships and to get staff used to going directly to them for answers and direction.

When somebody recruits, they never say ‘get me somebody weak who's not effective’; they say ‘get me someone who can get the job done. ’ But both parties have to work together. “A weak person wouldn't want to hire a strong person; they'd have to give up control. A strong person will hire a strong person, but it has to be the right strong person. Sometimes you need someone who's absolutely fearless,” and sometimes you need a good negotiator. “Either way, you have to know where you want to go.”

Examine your present situation, goals, and the kind of structure &endash; and managers - that can take you there. Then conduct the search. Aim high. Nobody has ever regretted looking at a lot of candidate, having a fair and systematic process, looking very carefully, and vetting. If you hire the wrong person, you have an unending series of crises. Look at what the person you're bringing in has changed, and talk about that in the hiring process. You're preparing yourself for change and looking at how the person does those things. “People go for character, for those who are philosophically aligned, as much as the specific technical skills. Character, honesty, believability - that's what you build a company around.”

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