Read a couple of management books or histories of corporate success and you'll almost certainly find one of the outline-point headings like "build a sustainable organization" or "pro-actively recruit from within" or something. S
There are a bunch of obvious reasons why this is good -- for lower-level employees, the perception that they can advance is important. But I want to talk about something more subtle.
Bringing in executives from other companies doesn't just cap ambition of current employees, it causes a huge amount of chaos. An executive joining a company from the outside has usually been recruited for some outstanding work they did turning around a division, or putting out innovative products or... something.
When they join, they have a couple of priorities.
- Figure out what I've gotten myself into
- Get things shaped up
Generally, they give themselves about three months to come up with a great plan for success. During that time, they're listening to almost anyone's ideas, try and map out the power lines, and come up with a long list of problems.
They will, almost inevitably, pick the worst people to listen to. It'll be the personable politically saavy senior VP, or the guy running some random division he was rightfully exiled to. They're good over lunch, they seem helpful and welcoming, they have a great pitch about the company's problems.
This, as an aside, is where many execs lose it. When the people who actually make things happen look and see that the new exec is championing the worthless ideas of some scumbag everyone hates working with, that's it for the new exec's credibility. This kills morale when people know that the guy with the ear of the new VP or CEO or whatver is a slick moron.
But more to the point: nearly every exec, at the end of that initial period, takes their list and sets out to solve it in exactly the wrong way:
They try and change the world to match what made them successful at the last job.You'd think that the kind of eagerly-persued talent that gets hired would be more adaptable, but that's rarely the case.
Everything they look at will be measured against what things were like at the last awesome job that exec had. If they had success at customer-centered orgs, that's what they'll do. If they were all about cost control, order office supplies now and lock them in your desk.
I've seen this happen over and over. New execs are willing to look at the problems of the institutions they join but rarely at the positives.
For example, say a company's evolved over a long period of time to produce teams centered around different pieces of particularly difficult technology (I'll use cell phones, so my current job doesn't get after me):
- Customer application A
- Payment application B
- Phone application C
...
Each of those has a couple of rocket scientists who have done the core work on the application, and an outer layer of people with specific experience who know their job really well.
The new CEO notes that it's really hard to get big projects done, because each application has resources and wants to tinker with stuff. Resources are hard to move around. They come from a much different background, where all jobs classifactions were divided up and people might work on anything. So if you want Superproject 2000 to go out, you get 10 analysts, 10 devs, 10 testers, and so on. The new CEO decides they need to reorg around job function.
This fails, because the world can't be bent to perception. Probably what happens is that everyone moves around on an org chart and then ignores it: the manager in charge of projects for application A goes and gets their old crew together, while application B does the same, with a little poaching here and there. Really undesirables get put on the worst work, or laid off.
Which isn't bad, but those people should have been weeded out aggressively earlier. That's a whole other topic though.
The other possibility is the rocket scientists and the other really smart folks leave, and now your silos are filled with dumb folks who can't get anything done.
Whereas if you promote from within, the worst thing that'll happen is you'll have someone who came up through the ranks and knows how to work with the other groups. There are drawbacks, of course -- favoritism towards old cronies, inability to let go -- but the one advantage someone who comes up steeped in company culture will know is the company culture, and who is to be respected and who should be ignored.
When they face the problems the new exec faces, they are much better acquinted with it. They know why it exists, and what's happened to previous attempts to fix it. They know who can make the solution happen, and how it can be done.
Sometimes when a company is clearly broken, a new exec is the solution. But often it does far more harm than good, and promoting from within should always be the prefered choice.
