Tweet

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

Guest post by: Anne Warfield

Article Overview: 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.

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.

Related Articles
  Start An Online Business From Home Off On The Right Foot
  Why Hire a Public Relations Firm
  Online Affiliate Marketing Start-Up Tips For Beginners
  Money Saving Tips To Rent A Car
  Hire Purchase Financing for Small Business
  How To Promote Your New Product
  Are You Still Struggling To Build Your Online Business?
  The Heart of Business Strategy: 48 Things That Matter
  Lesson #1: “Never hire or promote in your own image”
  How to Hire the Right Person During an Economic Downturn
  Why hire a Sales Coach when I already have a Sales Manager?
  The Ten Commandments of Fake Steve Jobs
  Writing and Publishing eBooks Made Easy #10 - Selling and Promoting Your eBook
  The Bozo Explosion
  Starting a Business Online Requires Developing Internet Marketing Skills
  The Most Important Issue of Successful Work at Home Internet Business
  Startups and the Dilemma of the First Sales Hire
  Starting An Affiliate Marketing Business
  Online Money Making Ideas: How To Make Money With Clickbank
  SEO - What Is That?

Article Tags: communication, corporate culture, firing, hiring, leadership, presentation, principles, promote, values



Related Forum Posts
How to valuate a business - Hi Garth - here is how we did it at Northern Crown Capital when I was helping them raise venture capital for Toronto-based entrepreneurs. Assume the start date is 2003 so 2008 projections are 5 years out: How Northern Crown Capital Valuates a Business 2008 Financial Projections Earnings Before Tax $5,865,000 Tax Rate 42% Taxes $2,463,300 Net Earnings $3,401,700 Amount Seeking to Raise Today $3,500,000 Discounted Value of Future Opportunity, 5 Years Out 2008 P/E Ratio 15 Value of Company in 2008 $51,025,500 Discount Rate Applied 30% Year 2008 $51,025,500 Year 2007 $35,717,850 Year 2006 $25,002,495 Year 2005 $17,501,747 Year 2004 $12,251,223 Value of Company at Investment in 2003 $12,251,223 Less: Investment Amount $3,500,000 Present Value $8,751,223 Discount for Risk & Private Company 40% Less: Discount for Risk & Private Company $3,500,489 Private Company Value $5,250,734 Present Value (What the Owner Keeps) $5,250,734 60.00% Financing (What the Investor Gets) $3,500,000 40.00% Total $8,750,734 100.00% I hope this helps!
Re: Moderators on vacation - Well what happens if you own a store or bar/restaurant? You're up at the crack of dawn to do prep work, and the last one there late at night closing... open 7 days a week... what can such an entrepreneur do for time off? Hire a trusted manager?
Re: Ways to Boost Productivity - 1. Give Employees More Than a Paycheck 2. Provide Better eSupport Channels to Promote Self-Service 3. Complete your most dreaded tasks first thing in the morning. 4. Outsource as much as possible 5. . Turn off the TV.
Hi everyone - Hi everyone.I am Alex,SEO Analyst on XSEO Company.Nice forum.
Hiring good people - Thanks everyone. From the PROFIT companies the success formula seems to be: - Give employees responsibilities that make them stretch themselves - Provide them with a good work environment and happy co-workers - Invest in them by giving them training - Build projects with them to give them some ownership of the idea - Make sure they fit your company culture And almost all of them say: Hire slow, fire fast.


Share this article with your friends. Fund someone's dream.

Leave a comment below or share on the left and you'll help support entrepreneurs in Africa through our partnership with Kiva. Over $50,000 raised and counting - Please keep sharing! Learn more.

Newsletter

Get advice & tips from famous business
owners, new articles by entrepreneur
experts, my latest website updates, &
special sneak peaks at what's to come!

Name:
Email:

Popular Articles

What I Really Want Is...

What Makes an Extraordinary Business Consultant?

Quick Tips on Buying a Business

Suggestions

Email us your ideas on how to make our
website more valuable! Thank you Sharon
from Toronto Salsa Lessons / Classes for
your suggestions to make the newsletter
look like the website and profile younger
entrepreneurs like Jennifer Lopez.