When You Should Promote From Within And When You Should Hire From Outside The Company

Their company was on the rise. They had gone from $50 million in sales to $250 million in just 10 years. They had a softball team, a family picnic every year, and a Christmas party that was so loved by everyone that groups of people would get blocks of rooms and stay the night to party together. Almost every Thursday the entire office would end up at a local bar for a few drinks together. Most of the Senior Vice Presidents made it on Thursday night as well.

And then the CEO decided to retire.

Two of the internal Senior Vice Presidents applied for the CEO position but were turned down because the board of directors decided it was time to bring in new blood to take the company to the next level. After all the board figured, how could someone internally take it any higher since all they had to learn from was the CEO and he couldn’t take it any further?

Now at first the company grew under this new leadership. It actually went to $500 million in sales. On the surface it looked like the Board of Directors choice to hire from the outside worked.

What they didn’t realize is that the corporate culture had switched to being one you worked at, watched your back, and did what you had to in order to get ahead. And then it happened…the corporate culture had switched so much that there was a mass exit of the top talented people and the sales dropped from $500 million to $300 million in only 5 years. In the last 3 years they have gone through 3 different CEO’s and are still struggling today.

Can changing one person really have that kind of impact on a company? Is that normal?

ABSOLUTELY!

You must know WHEN you should promote from within and when you need to bring in new blood or you can KILL your company.

So how do you know which one you should do?

The answer is surprisingly easy yet I am amazed at how many companies miss it. I believe most companies miss it because they don’t realize the importance of this ONE ingredient in the success of their company.

The one key ingredient is YOUR CORPORATE CULTURE.

If you have a great corporate culture promote from within your company. That way you are ensured that the values, integrity and character of the company will keep going. You are better off training a person on the new skills they need for the job than you are trying to train someone on what your company culture is.

If you don’t have a good corporate culture or you wish to change the corporate culture, than hire from the outside. Look, not only at the individual, but study the corporations they came from as well. Have they learned under corporate cultures that you would like to duplicate or enhance? If so, they would be a great candidate.

Be leery if they have always been in organizations that are counter to your corporate culture. Remember they will practice what they have learned.

I have seen so many companies hire poorly with disastrous results for the department or corporation. I saw one company that was a driving yet balanced company hire a young woman that was a driven go getter. She came from corporations that rewarded you for the work you did not the life you lead. She came in disrupted the entire work flow, had 3 people in her department quit before the company had to fire her. That department is trying to rebuild itself today.

I have also seen companies that know their culture so well that they mainly promote from within. American Woodmark is a corporation that has a complete grasp of who they are. They have a solid seven year vision that each employee knows about and how they directly affect that seven year vision. They have a complete training program that builds on and molds people in their corporate culture. Matter-of-fact we are one of the only training companies they use from the outside. The reason our programs have worked for them is that we build our program to MATCH and ENHANCE your corporate culture. We realize that your behavior comes from your beliefs and so the more the training fits your corporate beliefs the more the training will be reinforced in your company.

Remember your company has it own culture, character, and flavor. If you like the way it is, than you are better off promoting from within and helping that person develop the skills to move to the next level. That is how you build loyalty, values, and love for the company.