Insights — Executive Recruitment — 4 min read
Common Mistakes When Hiring a Managing Director
A Managing Director appointment sits above every function, so its mistakes are rarely contained — they are felt across the whole business, usually for years.
In short
The most common mistakes are appointing without genuinely devolving authority, keeping the founder or owner too close to day-to-day decisions after the appointment, hiring for personal chemistry over demonstrated whole-business capability, and failing to prepare the existing leadership team for a new layer of accountability above them.
Because a Managing Director sits above every function, a badly designed or badly run appointment does not fail quietly. It shows up as friction in every part of the business at once, and it is often blamed on the person rather than the decisions the business made before they arrived.
These are the mistakes we see repeatedly in owner-managed and mid-market businesses making this appointment.
1. Appointing without genuinely devolving authority
This is the single most common failure. A board or owner appoints a Managing Director, gives them the title and the salary, and then continues to make the decisions the role was created to own — pricing, hiring, investment, strategy. The new MD discovers within weeks that they are accountable for outcomes they have no real power to shape.
Fix: write down, before the search starts, exactly which decisions move to the new MD and which remain with the board or owner. Share it with candidates during the process, and hold to it once someone starts.
2. The founder who cannot let go
Founders and owners who appoint a Managing Director because they are exhausted by day-to-day running, and then continue answering the phone calls, overriding decisions and going around the new MD directly to functional heads, undermine the appointment within the first month — often without realising they are doing it.
An owner who keeps taking the calls they hired someone else to take has not actually made the appointment they think they have made.
Fix: agree explicitly, in advance, what the owner will stop doing — which meetings they will no longer attend, which decisions they will redirect, and how they will handle the discomfort of the first few times something is done differently than they would have done it.
3. Hiring for chemistry over capability
Because a Managing Director will work closely with the owner or board, there is a strong pull toward hiring someone comfortable to be around rather than someone with demonstrated evidence of running a whole business well. Comfort is not a proxy for capability, and the two are sometimes in tension — a Managing Director who will challenge the owner's assumptions is often more valuable than one who agrees easily.
Fix: assess for evidence of whole-business decisions made under real pressure, not for how the conversation feels. Ask what they inherited, what they changed, and what the business looked like when they left it.
4. Ignoring how the existing leadership team will react
Introducing a Managing Director above a leadership team that has previously reported directly to the owner is a genuine structural change, not an administrative one. Functional heads who have grown used to direct access to the ultimate decision-maker can experience the new layer as a demotion, whatever the org chart says.
- No communication plan for why the role exists and what changes for each functional head
- No clarity on whether existing direct relationships with the owner continue for some matters
- No transition period where the owner visibly hands authority to the new MD in front of the team
- Resentment building quietly because no one asked how the team felt about the change
Fix: treat the introduction of the role as a change management exercise. Explain it, sequence it, and be visible about the owner's support for the new MD's authority in the first few months.
5. No structured first-year plan
| Weak onboarding | Structured onboarding |
|---|---|
| No agreed baseline of where the business stands | A written state-of-the-business assessment agreed in month one |
| No priority order for what to fix first | A sequenced plan agreed with the board within the first quarter |
| No defined check-in points | Formal thirty, ninety and one-hundred-and-eighty day reviews |
| Owner judges progress against an unstated mental model | Success criteria agreed in writing before the person starts |
6. Confusing the wrong problem with a Managing Director gap
Where the real issue is weak sales leadership, thin operational capability, or a founder who has simply never delegated well, appointing a Managing Director does not automatically fix any of it — it adds a layer that may inherit the same underlying dysfunction. Diagnose the actual gap honestly before assuming the answer is this specific role.
7. Rushing the process for an appointment this consequential
Because the role touches every part of the business, a rushed process — a handful of unstructured conversations, no reference checking against whole-business outcomes, no board-level final stage — carries more downside risk than for almost any other appointment a business will make.
Sources
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Written by
International Sales & Market Development Director, Evans Sales Consultancy
Published 17 September 2026 — 4 min read