On Hiring: Promote Stars, Not Strangers

“Well, he’s never been a sales development rep (SDR) manager before, but he has been an SDR for 3 years at another company. The chance to be a manager is why he’d come here.” — Famous Last Words

I can’t tell you the number of times I’ve heard something akin to the above in hiring processes.

Of course he’d come here to get the chance to be a manager.  The question is why his current employer won’t make him one?  They’re the ones who know him.  They’re the ones who’ve worked with him for three years.  What do they know that we don’t?

As a general rule, startups are not the place to learn how to do your job.  At startups, you should hire people who already know how to do the job.  Running the startup, in a high-growth, frenetic environment, is hard enough; you don’t need to be learning how to do your job at the same time.  A key reason startups offer stock options is precisely this:  to incent people who already know how to do the job to do it again by participating in the upside.

This is not to say, reductio ad absurdum, that startups should have no entry-level jobs, never take a bet on inexperienced people, and never promote anyone into management.  That’s a recipe for losing your best people when they decide the company has no interest in their personal development or career path.  The best startup teams are a mix of veterans and up-and-comers, but since — particular for management hires — you need to have a mix, you need to be very careful to whom you give that first-time in-the-job slot.

This is why I made the Star/Stranger Promotion Quadrant.

star promotion

The two axes are simple:  is the person a known star (at this company, i.e., do we all known her and do we all think she’s a star, here) and has the person done the job before (i.e., the actual job, SDR manager in this case, not SDR).

One of the easiest things you can do is to appoint known stars.  This means the person works today at your company in a different role, but wants to do a new job that’s opened up, and has already done that exact job before.  It doesn’t happen that often, but sometimes your director of product management has been director of product marketing before and wants to get back to it.  Awesome.  I call this “appointing” known stars because while the move may involve a titular promotion, in reality it’s more of an appointment than a promotion.  It’s great to let people move around the organization and there should be no shame in ever wanting to move back to something that someone particularly likes doing (or that the company really needs).  I shade this green because it’s low risk.

One of the nicest things you can do is to promote known stars.  For example, take a top-performing SDR who has management potential (an elusive concept, I know, but a whole post unto itself) and give them the chance to run a piece of the SDR team.  I prefer to do this — especially for first-time promotions into management — on a reversible basis.  Since neither side is certain it’s going to work, I believe it’s best to make someone a “team lead” for six months and then assess how it’s going.  If it’s going great, promote them to SDR manager and give them a raise.  If it’s not going well, you haven’t burned the ships on making the person a regular SDR again, working on some skills, and trying again in the future.  I shade this purple because there is some risk involved, but it’s a good risk to take.  People in the organization want see others given the chance to succeed as well as to safely fail in taking on new challenges.

If you lack existing team members with management potential or if your current team has too many first-time (and too few experienced) managers, then your best move is to hire qualified strangers.  While the stranger might want a career step-up, the reality is that most companies hire new people to do jobs they already know how to do.  Cross-company promotions are rare and candidates offered them should be somewhat wary.  Why again are these people willing to make me a CMO for the first time?  Sometimes the reasons are good — e.g., you’ve been a divisional marketing VP at a larger company and move into a startup.  Sometimes the reasons are bad.  Think: why won’t any qualified CMO (who knows this space) take this job?  But, moving back to the employer perspective, I shade this square purple because external hiring is always risky, but you can minimize that risk by hiring people who have done the job before.

This takes us back to the start of this post.  While depending on the kindness of strangers may have worked for Blanche Dubois, as a hiring manager you should not be extending such kindness.  Hiring qualified people is risky enough.  New hires fail all the time — even when they are well qualified for job with lots of relevant prior experience.  Don’t compound the risks of cultural fit, managerial relations, attitude/urgency, and a hundred other soft factors with the risk of not knowing how to do the job in question.  What’s more, do you have time to teach one of your managers to do their job?  Especially when what’s needed is teaching in basic management?  As I often say, VCs are risk isolators more than risk takers, and hiring managers should think the same way.  That’s why you should almost never promote strangers.  (And, as a corollary why strangers should be wary of those willing to promote them.)

That’s why I’ve colored this square red.  Companies should hire outsiders to do jobs that candidates already know how to do.  Promotions are reserved for promising insiders.

Put differently, and from a career planning viewpoint:  “rise up, jump across.”

One response to “On Hiring: Promote Stars, Not Strangers

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