In this post I hope to explain how hiring externally as a tool for fixing problems ultimately leads to a weaker organization.
When I began writing this post, I was having a hard time. Whereas the post talking about what a bad idea firing is was easy, the situation is considerably better for hiring. For starters, there are more organizations that do a good job. Very rigorous hiring practices, even during growth. It’s also easier to talk about how a company hires people than how it fires people, as its generally a positive experience (which is why this article probably seems a lot weaker than the previous). Of course sometimes you need to hire specialists for very specific areas (I’m talking something like ‘hardware emulation’ or ‘low-level rendering engines’, not ‘databases’ or ‘UI programming’), where it is prohibitive to train or grow people in a year. And sometimes there are amazing individuals you just need to have (take Ward Cunningham being hired into New Relic or John Carmack becoming CTO of Occulus as examples). Then there are organizations in periods of rapid growth. While rapid growth is always risky, it’s often necessary to bring enough force to bear in innovative companies. I’d much rather see stable growth but it’s not always an option. So I needed a clear demonstration of the problems.
Then, like manna from an ironic heaven, I saw this article about Abercrombie’s CEO. After investor calls for his resignation, Abercrombie renewed his contract and stated their plan to hire in three executives to manage each of their brands. The idea is that one of them will replace the current CEO, and the CEO has done a bad job managing things, and of course did not groom internal candidates, so it seems they are due to come from the outside.
I don’t understand how anyone expects this to end well. Each Brand President will come in, make changes (including, probably, layoffs!) that benefit the short term (because their goal is to be CEO), and then: 1) The one that becomes CEO will stay a few years. The average tenure of a CEO in America is about 4.5 years. 2) The two that do not will likely leave, meaning new executives will be hired in and there will be more instability.
This is the sort of hiring- not just at the CEO level but all leadership levels down to team lead- that I think can be misguided. Why?
Mostly, because it disguises a problem. Most organizations buy into the idea that internal candidates should be preferred to external ones (another Lean principle!), yet still need to look outside for senior talent and managers. I would compare the situation and solution to DevOps: if deployments are an issue, the worst thing to do is isolate their handling to a small group and deploy less frequently. The DevOps movement has shown us the power of the mantra of “if it hurts, do it more often.”
I believe the inability of an organization to groom internal candidates indicates severe management problems, and because the feedback cycle is so slow for personnel changes, trying to defer it and “fix it for the next time” will never actually fix the issues. Internal hiring will force an organization to confront its issues, which can include:
- Stifling managers that do not or cannot groom their reports for seniority and leadership.
- A dysfunctional project that people do not want to work on and would be under-staffed if people were allowed to transfer.
- Projects that depend on a couple of people, making them unable to transfer.
- A general lack of learning and growth, perhaps because everyone is 100% allocated, with no slack time.
- Work that is not challenging or evolving, causing the same experience over and over.
- Valuing efficiency and specialties of individuals over utility and value.
All of these issues (and more) cause issues with internal hiring, but also are bad for the organization overall. Wouldn’t it be great if you could both fill a key role and address issues?
Is the risk too great of promoting a bad candidate? I don’t know: is the risk too great of hiring in an unknown quantity into a leadership position? Is the risk too great of having a candidate who wants a job change but your organization can’t give it to him or her?
If you are looking to do anything but shrink, you should always have ‘junior’ positions open and take the cream of the crop. This is especially true if you are outside a major tech hub.
There’s also another type of problematic hiring: adding resources to failing projects (whether outside or inside hires). We all know Brookes’ Law, that “adding people to a late project makes it later” but I can’t count how many times people do it anyway. If there are problems with a project, adding people is the worst way to address issues. “We need more resources” is a tantalizingly simple explanation for why something isn’t getting done, but I’ve never seen it be the actual reason. It is, like hiring leadership, a great way to disguise and distract from the real problems. This topic requires a separate post, though.
I also want to point out a perversion of ‘internal hiring’: creating an excess of managers and handing out seniority titles as candy. What I’m advocating here is when you need a manager, look internally, not to turn someone into a manager because they want it. Likewise, I’m not saying you should give someone a more senior title because otherwise you’d open up a senior developer spot, I’m suggesting you give them the responsibilities (say, team leadership) and see how they handle it.
It is much easier to hide the lack of internal hiring in technology companies because it is growing so quickly (there’s a need for external hires, and people can get jobs elsewhere if they become frustrated). But ultimately I see a dependence on external hires on the other side of the ‘firing as a tool’ coin. I don’t think you can do one without the other. They are inseparable from not just a cultural level but a practical one as well. It is about investing in your employees over looking for easy answers.