How to sort strategic from tactical execs
If you don’t decide ahead of time which one you need, you will have trouble making the hire, and the odds of the person succeeding in the position go way down.
The terms strategic and tactical are not euphemisms for smart and dumb. A tactical executive may be just as bright as a strategic peer, but is a left-brained linear thinker, compared with his or her right-brained creative counterpart.
What has changed?
The basis for choosing a strategic version of an executive role over a tactical one is most often a rapidly changing market, or a rapidly growing company, which leads to the recognition that the company’s executive skill set needs to be expanded.
Deciding if you need a strategic executive requires your being able to answer the tough questions as to what has changed in your market, and whether the critical factors for success have also changed. Here are key questions to ask:
What is the desired outcome of the business unit or function?
What has changed about your market and industry?
Perform a gap analysis comparing the current competencies of your business with the capabilities required to achieve your future strategy. What are the critical success factors? Which competencies are currently lacking?
What do you need the person hired into this role to accomplish in the first 18 months? What secondary goals would you like that person to accomplish?
Are the goals set for this individual viable under current market, industry and organizational conditions? Have sufficient organizational resources been allocated to support the executive in achieving these goals?
Which type works?
Here’s an overview of how to evaluate key executive roles as to whether to make a strategic or tactical hire:
VP of sales. Sales should be a tactical function focused on execution, assuming a company has done a good job of aligning its products and its target markets. Therefore, a senior sales executive is rarely going to be tasked with strategic decisions, unless the position has responsibilities for both sales and marketing, in the case of a general manager, senior vice president of sales and marketing, or vice president of channel partners.
Even if a company is significantly changing its sales model (for example, from channel driven to a direct sales force), the vice president of sales need be only experienced, sophisticated, flexible and driven to execute on the strategy, not strategic as a person.
Whoever holds the position needs to be open to new ideas, though, and not be threatened by a marketing executive who is suggesting strategies different from those that have succeeded in the past.
VP of marketing. Marketing is inherently strategic in most businesses. However successful a company is today, it will eventually face strategic threats to its growth and profitability. Yet though marketing is always strategic, the strategic elements vary greatly from one industry to another. Marketing has drastically different responsibilities in three major business sectors, consumer packaged goods, business to business, and retail:
- Consumer packaged goods (CPG): At a firm such as General Mills or Procter & Gamble, marketing rules. It is responsible for branding (critical to a CPG firm), and has profit and loss responsibility. Because of marketing’s importance to this industry, they are considered the premier training ground for brand marketing executives in other industries.
- Business to business (B2B): Marketing is critical in a company that sells to other businesses, though it is sometimes neglected in favor of sales in small and mid-sized firms. When CEOs attempt to fix that by hiring a marketing executive, they may make the mistake of hiring an elite brand marketing executive from a CPG firm. Often, this person is unsuccessful in the B2B space, where branding is a much smaller ingredient for success, compared to the product management elements of marketing.
- Retail: In retail, merchandising rules, not marketing. The navigator of the enterprise (and future senior executive) is the buyer, who decides what will be on the store shelves. Marketing is primarily responsible for advertising, communications and analytics. They do not require significant branding or product management experience.
A final consideration for hiring a successful marketing executive is that however strategic that person must be, he or she must also be tactical in executing on the strategy in a focused fashion, a quality many strategists lack.
Financial needs
Chief financial officer: The critical distinction between a controller and a chief financial officer is the ability to have a strategic impact on the business. Most small to medium-sized companies do not need a strategic CFO. For example, a mid-sized, privately held manufacturer whose CFO retires after 15 years in the job probably needs another quality version of the same person to manage the finance function competently; the CFO as controller. In contrast, a venture-funded startup may need to hire a CFO with experience taking a company public.
Chief information officer: Information technology continues to evolve rapidly. CIOs are challenged to execute tactically on their commitments to their business customers, while strategic goals simultaneously expand. More important than a technical visionary or strategist is a realist, who can balance technical and business realities and minimize the number of unfulfilled commitments.
VP of human resources: A vice president of human resources should be both tactical and strategic. The role has traditionally struggled to bridge the gap between theory and reality as to HR’s scope of power and responsibility in an organization.
The growing tend toward Web-based outsourcing of critical back office tasks such as payroll and benefits administration is creating more opportunity for a strategic HR executive to be effective. Moving executives from other business functions into HR is also more viable than ever, because of the outsourcing of the specialized HR functions.
Following these guidelines will significantly raise the odds you are hiring an executive who is appropriate for your business’s future, rather than its past.
