Reference your references

References are the single most critical component to any executive search and need to be conducted thoughtfully, but for reasons far beyond the obvious. This is true of any hire, from Board members to CEOs to VPs on down. Take the time to get the complete picture on an interesting candidate. B candidates? Don't bother to reference them--you shouldn't even be talking to them in the first place. But when you think you have an "A" candidate, make sure you don't overlook them due to quick, out of context "referencing" done by people who aren't equipped to "reference the references."

We see great people overlooked because the untrained eye (sometimes our clients, or someone involved in a hiring process) will "do a reference" on a candidate, which is nothing more than a passing conversation during which an offhand comment is made. The "reference" can be highly suspect for a bunch of reasons. Among them:

1. Competition for talent. If you wave someone off a great candidate, you have a better chance of grabbing the person yourself. If you're a PE or VC firm, chances are, one of your partners is looking for a CEO and because there's a huge imbalance between the supply of great CEOs and the demand for them, this is a critical competitive edge that any firm would want to gain.

2. Almost never are these references done contextually. We never hear people actually walking the reference through the specific situation at hand, and having a thorough, balanced conversation to really flesh out someone's qualifications for a given situation.

3. Everyone's controversial. The more senior, the more visible, the more controversial. Steve Jobs. Enough said....

4. Personal vendettas are everywhere, and no one goes through a serious career without making a few enemies. Those people talk more loudly than one's supporters, typically, because people love to complain, especially in this day and age.

I could go on and on, but here's a real-time example of where a "back channel" (generally thought to be the best kind of reference and worth 10 listed references) almost cost me a world class CEO candidate.

• I'm running a high profile CEO search. My target is a CEO whose company was acquired, returning about 100% to investors over 4 years. A spectacular performance.
• I called the former COO, whom I know very well, and consider a good professional friend.
• My source had been part of the former regime, which was replaced by my target.
• Reference was highly negative. My source gave me anecdotes of what other team members complained about.
• I almost eliminated the target from consideration. But I stepped back and asked "how objective was my source?" This guy was passed over by the Board for the CEO role, and the "old guard" was clearly unhappy about it. So it was impossible to get a balanced read on the target from this particular source. His "followers" would naturally complain about the new regime and leadership in general.
• So I and my client ran about half a dozen other informal references, and then looked more analytically at how the company performed under my target's management. It was stellar. References were stellar. But they're binary: old guard unhappy, new guard ecstatic.

So this is a simple example of why, if you're going to run references on someone, take the time to do it right, really think about it, and give any candidate adequate consideration before moving on them, or moving on.