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Talent quandary: To promote from within, or hire externally?

Startups need to do both, says Maynard Webb. Here’s how to bring in new people without alienating your current team.

Talent quandary: To promote from within, or hire externally?
[Illustration: Infadel/iStock]

Editor’s note: Each week, Fast Company presents an advice column by Maynard Webb, the former CEO of LiveOps and the former COO of eBay. Webb offers candid, practical, and sometimes surprising advice to entrepreneurs and founders. To submit a question, write to Webb at dearfounder@fastcompany.com.

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Q. How much do you promote from within?

—CEO of an early-stage tech company

 Dear Founder,

The answer to this comes down to math. If you have 20 people today and you think you need 100 people in a year, you can’t simply promote your way there. Of course, you can’t just hire your way there either, as there are cultural implications—you will need to carefully work to integrate them.

It’s not an “either, or.” It’s an “and.” You will need to promote people from within your organization and you will need to hire externally. It’s important that you communicate this. People need to know that you have their backs, and as they do good things you will make sure that they are rewarded with good opportunities. They also need to understand that you will have to look externally as well and that everyone must make these new people feel welcome.

Employees like to know that opportunities for promotion will be going to internal people first, but that’s not necessarily the best strategy for the company. Leaders have to chase what’s best for the entity. And what’s best for the entity is finding the best people for the task at hand.

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Some of my best moves have been internal, but that doesn’t mean that you should be bound exclusively to internal promotions. The math will never compute.

Companies that don’t grow don’t thrive. Part of our job as a leader is to make sure everybody has opportunities to achieve their potential and enhance their potential. But you also have to execute and not have things break.

You didn’t ask, but these are a few best practices when it comes to determining who to promote from within:

  • Identify the most promising candidates and give them more to do: Task high-performing individuals with extra-credit assignments and try to help them expand their horizons by giving them a cross-functional project or asking them to lead a team. Or, as I like to sometimes say, find the person who is getting things done (the busy person) and try to break them. But don’t take this too far and scare people!
  • Look for those who command the respect of their team and peers: Be incredibly aware of their leadership abilities, not just how hard they work on their own. They absolutely must have true respect from the team and the ability to inspire others.
  • Let people have an acting role. But set expectations well so they don’t get their nose bent out of joint if they don’t get the job.
  • Give them the resources they need to grow: Match candidates with mentors, coaches, and advisers. Allow them to enroll in classes that will hone their expertise.

Be known as an organization that will reward people for doing a great job. But understand that you can’t promote everyone. Oftentimes, employees want things to stay the same. They fear change, and they think that growing with outsiders means they aren’t loved anymore. Show them that’s not the case, and inspire everyone to come along with you.

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