Could an Internal Promotion be a Company Demotion?

Promoting a candidate from within your company can be a seamless route for steering an enterprise toward a steady and glorious future.  But there are many times when a seemingly competent internal candidate is not at all what the situation requires.  It can be a tricky road for CEOs and upper management to navigate successfully, especially when weeks turn into months and no outside messiah has arisen that really excites your imagination.

If a month or two have passed and “Bob” from Business Development is still your “acting” Marketing Director, you may be tempted to settle.  But if an internal candidate is looking acceptable to you now, you might want to ask yourself, “Why wasn’t he the obvious candidate from the beginning?”  Did he miraculously gain super-talents overnight?  Does the department have the same urgency and flavor it had before your bigger competitor snapped up your marketing guru for big bucks?  Why are the headhunters and big companies not throwing money at Bob?  If Bob was really the guy you wanted, wouldn’t you have had the paperwork done and the transfer made on day one?

Maybe you’re still suffering from sticker shock when you hear the salaries that the proven outside wunderkinds are asking.  In any case, before you settle for Bob this late in the game, remember that two things often happen when companies take the short and less monetarily painful route of an internal promotion after a long and fruitless search:

– First, you are moving a person out of a position in which they are highly skilled and effective, creating a hole that you will have to backfill with somebody less experienced and less competent.

– Second, you are moving that same person into a position for which he/she has not been groomed and which may take months or years to grow into and get up to speed.  You know that disclaimer you see on a stock offering prospectus? Past success is not an indication of future results.

That’s true here too.  Dr. Laurence J. Peter, in his 1969 book, The Peter Principle, famously theorized that “every employee tends to rise to his level of incompetence.”  As long as an employee is doing well, he will keep getting pushed ahead.  Eventually, he will reach a point that is over his head.  He will be mediocre and languish in that position, no longer getting the stellar reviews that keep him moving forward.  And there he will stay, making the company more mediocre for years to come.

Too many internal promotions seldom bring about the growth and vibrancy a company needs. The best of your best is not necessarily the best there is.  Expanding the gene pool and the introduction of new blood with new non-parochial ideas are what the doctor ordered (Dr. Darwin, that is) to allow the strengthening process of natural selection take a company to new heights.

An ability to “think outside the company box” may shake things up in a gray company universe, but sometimes the safe and stable course provided by loyalty and company-line thinking do not provide the innovation or the talent to give a company the competitive edge it needs to be the best in a jungle that gets more dog-eat-dog every day.  Does that mean to only bring new talent in from outside for every hire?  No!  A healthy mix of outside talent coupled with internal career-track growth is likely the recipe for success!  Outside talent often brings new ideas (even if the person was in an entirely different industry) and can offer a fresh perspective (‘forest for the trees?!’), and internal talent can offer tribal knowledge and loyalty that an outsider cannot!