LinkedIn cofounder Reid Hoffman boils down his rule for hiring a replacement when a company has 'the wrong CEO'
- In his journey to becoming one of Silicon Valley's most influential entrepreneurs and investors, LinkedIn cofounder and Greylock partner Reid Hoffman has seen the full scale of success, failure, and everything in between.
- Sometimes, a startup outgrows its chief executive. Hoffman stepped down as CEO of LinkedIn, twice, when he realized he wasn't the best fit for the job.
- In an interview with tech industry veteran Elad Gil for his new book "High Growth Handbook," Hoffman reveals what he looks for in candidates for CEO when the board of directors has lost faith in the current CEO's abilities.
- Spoiler alert: It takes a founder's mentality to succeed as CEO.
Reid Hoffman stepped down as chief executive of LinkedIn, the professional network that he helped launch in 2003, as the company grew from a handful of people in his living room to dozens of people in an office. He decided he was more passionate about solving intellectual challenges, as a founder does, than building an organization.
Hoffman had a hand in hiring his replacement - twice - after taking back the reins as LinkedIn's CEO in 2009 and vacating the position once again six months later.The tech billionaire has learned a thing or two about hiring a company's next CEO, from having selected his own successor to sitting on the boards of PayPal, Zynga, Airbnb, and Microsoft over the years. Hoffman is now an investor at venture firm Greylock Partners.
In an interview with entrepreneur and investor Elad Gil for his new book, "High Growth Handbook," Hoffman shares his secrets for what a board of directors looks for in candidates for CEO when the board has lost faith in the current CEO's ability to succeed.
"The key dynamic - and it's super hard - is one I've learned through LinkedIn: You're actually looking for a cofounder," Hoffman told Gil in an interview.
"You're looking for a cofounder who may have a different skill set than the people who are part of the initial 'family' or 'tribe.' But you're looking for, essentially, a cofounder."
Hoffman said it's important for a startup to have someone at the helm who has the commitment, the ambition, and the "I gotta make it work" drive, if they are to turn the company's early success into lasting relevance. It takes a founder's mentality.
There's a simple way to test for this.Hoffman said he liked to ask, "'Would you do this job if we paid you half of what we're paying you? Because you're really committed to this thing?' That's not to say you should pay them half, but you want someone who sees this as the thing they want to do."
Hoffman went on:
"People frequently say, about hiring a new CEO, 'Well, I'm hiring a skill set.' Skills set's important - which level you're at, your ability to make it work. The reason you're hiring a new CEO is because there are new skill sets that are critically important.
"But if someone doesn't have the founder's mindset, they'll be fundamentally, at best, in asset management. They'll make sure that things keep running, keep going on a trajectory. But the ability to change the curve means taking a risk that a founder would take.
"That requires moral authority, but it also requires a mental willingness - including risking hearing that, 'You really screwed up, you're doing this really badly.' You have to be willing to go through that in order to make it happen.'"