Companies Hire From Within

ViewPoint

Over 80% of the time, companies fill senior executive positions by promoting from within. This is because history has proven that in most cases, promoted executives perform better over time than those hired from outside the company. There are several reasons for this.

The Problem

Company executives understand and have become acclimated to their particular corporate culture. They have adapted their management style enough to fit in and become accepted. This is not easy to do, and takes time. Hiring authorities know from experience that the” chemistry and fit” challenge is the biggest risk in hiring from the outside. It is so important in fact that lack of fit is a major reason that executives are fired, not only, not hired.

Outside executives often try to change the company culture by themselves. They have succeeded in other environments, and believe that cultural model is necessary for them to succeed in the new company. Under pressure to perform, they seek to change, in only a matter of months, a way of doing business that has taken many years to develop. It doesn’t work. Changing culture takes time and patience.

New executives from the outside often try to change too much too soon. They believe the successful approach they used with other companies will automatically work with the new one. They feel they have something to prove, fast, and don’t listen enough to and gain sufficient buy in from peers and subordinates. They end up dictating their own change agenda and alienating colleagues in the process.

Finally, it is important to know that in many instances corporations interview outside executives simply to confirm that their inside candidate is the best available. They are even willing to pay recruiter retainers to identify the best talent outside the company as smart insurance to confirm that their planned inside appointment is at least of comparable ability.

The Solution

Understand the reasons why companies tend to trust promoting from within rather than hiring from the outside and conduct your interviews accordingly. Here are some of the ways you can improve your chances.

First and foremost, prepare for the interview by finding out as much as you can about the CEO, your potential boss [if not the CEO], and senior management. Culture is usually defined by the company leader and filtered down through the top management team. What are their management styles, personalities, and vagaries? You may uncover much of this information from former employees, competitors, suppliers, and customers. You can also ask to interview with as many on the management team as possible once you have received or are close to getting an offer.

Outside culture research can help improve your candidacy during the early interview stage by uncovering information you can use to your benefit. “ I understand you encourage a relaxed, open door management style. I enjoyed that same environment at my former company, and found it fostered a strong sense of management camaraderie and mutual support which resulted in superior performance especially under stressful conditions.”

Inside research benefits you at the end of the interview process, when you have been given or are close to receiving an offer. Now you have the power, and can ask the tougher people questions that can impress the company that corporate and individual cultural chemistry and fit are just as important to you and critical to your acceptance decision.

Interviewing is a sales process, and one of the first rules of successful selling is to address potential objections before they arise. So when discussing your strengths, finesse the “hire from the outside” challenge by discussing it head on.

When asked, “ So what would you do in the first few months here?” You might answer:

“I would meet with as many people in and out of the company as possible who impact my area of responsibility to learn what they feel about the company and how they would strengthen its operation and performance. I would do a lot of listening, carefully weigh their points of view, and gain a sense of both individual and an overall company way of thinking and communicating. Then I would integrate what I learned from them with my own ideas to develop and begin to execute a plan that was fully bought in to and implemented by key colleagues and subordinates. I have witnessed new executives who come in thinking they have all the answers, step on a lot of toes as they rush to decisions on personnel and strategy, and it simply doesn’t work.”

Another technique that helps overcome the fit challenge during the interview is to, as one great interviewer put it,’ “steal with your eyes”. Establishing rapport early is critical to breaking the ice and making the interviewer feel more comfortable with you. Search for any items that can link you to the interviewer. Sailing photos, kids in soccor uniforms, diplomas, travel pictures, awards, art. Also look for clues to the interviewers style. Is the desk cluttered or neat, the office spartan or embellished, does he/she allow interruptions or not? Does the interviewer talk a great deal, ask short questions, etc? The skilled interviewer knows that just as the successful salesperson adapts his or her persona to the one being sold, so must the executive being interviewed. The greater the rapport, the greater the chance that the company will feel more comfortable about your ability to integrate well within the company and erase the major concern about hiring from outside.

Finally, many companies can be persuaded that hiring a successful executive from the outside offers advantages over promoting from the inside. The most important reason is that the external hire brings a fresh,” out of the box “ perspective that can is sorely needed to effect urgently needed change. And the urgently needed context is the key. In most cases, the more troubled or under performing the company, the greater its willingness to hire someone from the outside and invest him/her with the power needed to make the change. If performance is unsatisfactory, promoting from within may simply extend problems that are endemic. It is time to change. Accordingly, senior executives who are in a position to take greater than average risk in turnarounds will have an easier time overcoming the promote from within bias.

Summary

By understanding some of the key reasons why companies overwhelmingly prefer to fill senior executive positions from within, executives in transition can use this information to their advantage during the interview process. Preempting concerns regarding chemistry and fit and the ability to adapt to a new company cultural environment as well as offering persuasive arguments for a fresh perspective will go a long way to convincing the company that you are well worth the hiring risk.