Our Product Practice is devoted to helping tech companies make strategic product hires, and no hire consumes a CEO’s thoughts more than the CPO. For those recruiting C-level HCM SaaS product professionals, these are the top five lessons we’ve learned:
Requirements
It is always wise to determine early on whether subject matter expertise is required or whether you place a higher value on transformation and scaling experience. It is also essential to remember the urgency of this product leadership hire and your ideal hiring timeline.
M&A activity and consolidation continue to happen in the HCM category. While the big moves may have already happened (Kronos > Ultimate Software, SuccessFactors > SAP, Cornerstone OnDemand > ClearLake, Achievers > BlackHawk > SilverLake, SumTotal > SkillSoft… the list goes on). There is no shortage of the next generation of HCM and Employee Experience startups to meet the needs of the next generation of employers and their employees.
When a CEO sets out to recruit a CPO level hire, the organization has usually already found product market fit and are ready for a more strategic approach to building the business. This often includes making acquisitions or partnering with a broader ecosystem. These experiences are valuable for targeted CPO searches and can build a large talent pool to select from.
Adding subject matter expertise, whether in HCM, employee experience, rewards and recognition, or employee learning, begins to narrow the total addressable market or pool of candidates to attract. This scarcity of skills and experiences adds time to any search (usually a higher price tag as well), so tackling this decision early on is crucial.
It is also important to consider that every tech company already employs subject matter experts. These are often hires made early on when trying to find product market fit.
Scope
While the title of CPO suggests the hire will lead the product management organization, our product practice has partnered with CEOs whose organizational structures differ from what may be considered a more traditional org structure.
In some companies, the role of a CPO owns both product and design, while other companies, that put a premium on design, choose instead to have a Chief Design Officer as a peer to the CPO. In other companies, the engineering function is overseen by a CTO; however, we’ve worked with some clients who choose to have a VP of Engineering report into the CPO.
Pros and cons exist for every org structure combination. Before kicking off a CPO level search, it’s crucial to outline the model appropriate for your business as well as understand the why. Knowing this will help direct the search efforts to find the right type of CPO level candidate.
Process
When searching for a C-level hire, applying a C-level process when identifying, engaging, attracting, and hiring is essential. A C-level leader requires a thoughtful and appropriate process, which, in most cases, differs from anyone else you’ve hired.
Most C-level executives expect to be approached for opportunities by executive recruiting firms. They expect to be able to have private discussions with the third-party Recruiter and an employment lawyer about matters they would want to avoid bringing up with a future employer. They also expect their compensation to be negotiated on their behalf.
It is important to remember that C-suite leaders expect to meet the CEO as the first step, as aligning on vision is usually the most critical factor in accepting the position. They will ask themselves, “Can I work with this person? Do we have shared values?” The answers to these questions will determine their interest level and whether advancing into the process will likely be a wise investment of their time.
Another best practice is limiting the candidate presentations to a finalist or a shortlist of two. Asking C-suite leaders who aren’t sure or excited to create a presentation is a poor use of their time and yours. C-level candidates are sophisticated, and the process of recruiting and wooing them should be as well.
Time
For many organizations, the timeline of a C-suite search can take 12-18 months. Tech, however (similar to the products they create) moves faster and is more agile. This is why our case studies highlighting 40-50 business day search timelines are attractive to CEOs seeking a search partner. Not to toot our own horn, but we’ll never forget when we placed a VP Product in 33 business days!
However, when hiring a first-ever CPO, we always recommend a CEO and Board prepare for a search that will take 6-9 months. Hiring the first of any function often requires additional time. Additional time to:
- Create a compelling narrative
- Search briefs
- Job description
- Interview process and steps (see step 3 for advice)
- Buy-in from all stakeholders on non-negotiable experiences
- Flexibility or trade-offs in experiences
This all takes time, even more so when a process starts from scratch. However, if this groundwork has been properly laid, the CEO and Board should be prepared to move fast when they meet a “hell yes!” CPO candidate and optimize their processes to get the search wrapped up quickly.
Money
While the economy has had a reset and caused salaries to come down across many roles, this is not what we are seeing across CPO level hires. CPO hires remain the highest salaries a company will have to make a budget for.
Approaching this search from skills and experience criteria will likely get you the most compelling and relevant candidates to select. Approaching this search from a budgetary comp number baseline, while practical and sometimes the only option, often leads to failing to truly meet the candidates who could be a ‘next level‘ hire. Budgets can only get you so far. Every CPO level search will need to eventually determine “what it will take to get the hire,” which is the actual comp number you may have to come to terms with.
We hope you found this helpful! If you’re struggling with a CPO hire for your organization, book a consultation with us today! We know the market, the players, and can help you find that must-have CPO level hire.
Curious about CPO salaries in the HCM category? Explore the latest facts and figures in our salary insights.