In Good to Great, Jim Collins recommends that one of the first steps in building a great company is to get the right people on (and off) the “bus.” Not surprisingly, therefore, selecting the driver of the bus, the CEO, is certainly one of the most important tasks any board of directors undertakes. From the perspective of a venture capitalist working in the world of early stage companies, I have seen the huge, and often immediate difference the right leader can make. Now, I’m not talking about how to find great entrepreneurs who have started a company. While also a difficult process, this series of posts assumes we have already backed a good company, with great technology, but one that is in need of the right business leader.

Selecting the right CEO, however, is difficult, mostly un-scientific and often complicated because of personality and timing issues. Often, in very early stage companies, the “CEO” holds that title simply because he/she founded the company, and not because of any special qualifications or company-building experience. A few founders recognize that they don’t have the requisite skills to drive the bus, but many others figure that if they can drive stick shift in a sedan, how much harder can it be driving the bus? And that might be fine for a short drive at slow speeds, but as the company picks up speed, the probability of a major crash increases. So, many times, the first step in getting the right driver on the bus is convincing the current driver to step away from the wheel. It is often beneficial to have the founder remain involved with their company, just not always as CEO.

Timing is often a further complicating factor. Perhaps the current CEO has left unexpectedly (or been asked to leave immediately) or there is a financing that hinges on the recruitment of a new CEO. The board is under the gun, without the luxury of 6-9 months to do a thorough search for just the right candidate. Having had experience recruiting CEOs and knowing what qualities to look for can help make this challenging process more effective.

Several years ago Madrona surveyed our investment professionals, ranging from analysts just a few years out of college to veteran Fortune 500 CEO’s like Jerry Grinstein, Bill Ruckelshaus and Jack Creighton, who serve as our Strategic Directors.  We wanted to construct a profile to see if there was consensus on the relative importance of various personal attributes, skill sets.

The following graphs reflect the survey results (click on the graphs to see a magnified version).

Over a series of blog posts I will discuss the specifics of some of these attributes, what makes certain qualities more important in a CEO than others, and how, once you have determined what you are looking for, you know you have found it in the candidate. After all, what serious candidate is going to acknowledge that they lack good judgment? In the meantime, join in the dialogue by taking the survey and we will post the results and comments from the community.

Click Here to take survey