When Promoting from Within Doesn't Work

“We only promote from within” sounds like a values-driven promise, but what happens when that promise puts the wrong person in a critical seat? John Broer and Karen Shulman dig into the uncomfortable reality: internal promotions can fail, sometimes spectacularly, when organizations rely on seniority, loyalty, or gut feel instead of clear evidence of job fit.

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Transcript

Welcome And The Big Question

John Broer 0:08

A very warm welcome to all of our friends out there in The Bosshole Transformation Nation. This is your co-host, John Broer. And joining me today is none other than Karen Schulman. A favorite of the Boxhole Transformation Nation, I can assure you, because of her insights, her experience, her remarkable way of looking at the world of work. And I've asked her to join me in a conversation about when promoting from within doesn't work. Now we all know that it's honorable and noble to want to promote from within, to develop your own people, and I think that's great. I think that's the ideal. But if you don't invest in your people, and I mean set money aside to really grow and develop them and help your managers develop them, then promoting from within can really blow up in your face, and it does not work out all the time. So it asks the fundamental question: if we're gonna promote somebody or in the are they in the room, are they in the building, or are they out on the street? And sometimes this takes not only a philosophical change, but also a cultural change in the organization. So we're gonna unpack this topic. I think it's really critical these days and needs to be addressed by a lot of organizations. So let's jump in. Enjoy today's episode. Well, hey, Karen. Welcome back to the program. Good to see you again. Good to have you here.

Karen Shulman 2:01

It's really good to see you, John, and fabulous to be back. Always happy to come on the on The Boss hole Chronicles.

John Broer 2:08

And our audience appreciates you because, you know, whenever you've been on here, either with me or Sarah or both of us, I mean, we always have a great conversation. And a couple of weeks ago, a couple of weeks ago, I was thinking about this topic, and I thought, oh man, Karen would be a perfect one with whom to share this conversation. And it all has to do with internal promotions, you know, promoting from within when it makes sense and when it doesn't make sense, because recently we've had some conversations with clients that haven't even considered looking outside the organization. And we've challenged them because nowadays, uh, if people get a little too myopic when it comes to promoting from within, it could really hurt them. And so I think we've got a great discussion set up. And so, so Karen, we we both agreed. Let's let's go back. Let's let's go in the way back machine

Why Promoting From Within Feels Right

John Broer 3:05

when you and I were earlier in our careers, and the idea of promotion, promoting from within had a different feel to it. So give us a little bit of your perspective on that in your earlier career.

Karen Shulman 3:17

Yeah, in my earlier career, I was all about promoting from within. I couldn't understand why a company wouldn't do that because you already have talent inside your organization, you already know the folks. Why would you not promote everybody from within?

John Broer 3:33

Right.

Karen Shulman 3:34

Uh it it just seemed to be natural. And I was, you know, I was I was very, very assertive and very, very much wanted to move up the the ladder. And so of course they would do that with me because I was a great, I was a great performer, right? Yeah. So I was really a huge proponent of promoting from within because it just seemed to make sense. And and to me, I also worked in compensation and I saw what we had to pay people who came in from the outside. And to me, it just it just didn't make any sense at all to do that. So I loved it. I thought it was a great thing.

John Broer 4:11

Well, and I think it is an honorable and a noble um objective. I absolutely do, because one, yeah, there are there are people that are familiar with the culture. There are some community elements to it where they're part of the team, the family, whatever it may be. And I think you make I think you make a really good point. It is more expensive. I mean, statistically speaking, it costs more to bring people in from not only that the outside, but the time it takes for them to upskill and get, you know, into the groove. But, you know, the things that are favorable about it is that onboarding tends to be faster, lower cost, you pointed that out. And I I think the other aspect is it'll bolster morale. I mean, I I think that people will feel that look, my company wants me to grow. And, you know, one of the things we talk about is succession planning. You know, do you have a plan for me or is there a pathway for me? And and we've been talking about it for years. Nowadays, that career pathing is absolutely essential for the emerging workforce. They want to know that not only do I have a role here, but there is an opportunity for me to grow. And it tends to be, well, this is interesting. When you think about the pros, it would tend to perhaps present lower risk, but I'm not sure you and I would agree with that anymore. I would say how you and I have evolved over the years now that we are immersed in this science, and in our world, it's the science of predictive index and talent optimization. I think it is a noble and honorable thing to want to promote from within.

Karen Shulman 5:55

And I'll add one other thing, John. I think that typically promoting from within really helps improve retention because people see, you know, if I'm promoted and I know that I'm, you know, I'm I'm valued, then I'm gonna stay with the organization probably longer. And I think people that work in organizations where there are promotions from within uh may tend to stay longer because they're perhaps going to be slotted for upward mobility. So I do think it also it it also can improve retention too. But I agree with you. I'm I'm on the same page as you that uh having evolved over over time, I am still a proponent

When Seniority Drives Bad Choices

Karen Shulman 6:40

of doing it because of promoting from within, because it does have a lot of positives, but it can have some some things on the on the downside as well.

John Broer 6:49

Absolutely, absolutely. And so, so for our listeners, uh just so you have some context, you know, at Real Good Ventures, the work that we do is all around talent optimization and it is optimizing job fit, manager fit, team fit, culture fit. But everything we do is through objective data. And as I had shared, you know, the cornerstone of that is the validated scientific impact that we are able to get from the predictive index. Now, there are other tools out there, as long as they're validated for this, those are fine to use. We have just landed on this one. And I think that's when for both of us, our eyes were opened up, and it's like, wow, um it's good to want to have a philosophy or a plan for promoting from within until it's not a good plan. And this is for all of our corporate leaders out there, owners, managers, founders, whatever you whatever you want to call them, that are really ensconced in this idea of we will only promote from within and realizing it doesn't always work. And and I know a lot of I've I've said that to people and they go, I totally disagree with that. And they said, Okay, hold on, let's let's back up here for a second. And that's what we're really going to talk about. I I love to use a couple of examples. So a number of years ago, we started to introduce Predictive Index to a client, big manufacturing client, and the philosophy there, it was always promoting from within. Okay, so again, good, honorable, noble, and it was all about the next person in line, meaning it was based solely on seniority. That's good as long as they are the best fit in the position from uh, remember we talk about the whole person model, head, heart briefcase, and baggage. By the way, I'll put that, I'll put that episode in the show notes. Go back and listen to it. But we can't just look at the person's resume or as we call it their briefcase. We have to look at the whole person, which includes behavioral and cognitive data. And when we started to introduce that, oh my gosh, people freaked out because they because the the next person in line realized I might not get this promotion because now they're looking at it through a different lens. And man, did it it created a wave of concern through the organization. But that's because we were changing sort of the the old model that they had been used to because they were suffering from poor engagement, um, higher turnover, and performance was just not up to where it wasn't at a point where they could be competitive. And I get that, but making that transition was really hard for this particular organization. I mean, that shouldn't come as a surprise.

Karen Shulman 9:40

No, I mean you're you're talking about a change, and it's a big change. Yeah. But it's not it it's very interesting to me hearing you describe that client because it's not really so much of a change, it's really an enhancement. It's adding more information to help you make better decisions. But it's, you know, look, it's the way we've always done it. So why would we do it differently? That that mentality had to be overcome.

John Broer 10:06

Yes. And it did not happen without a lot of consternation, heartburn. I mean, people were really upset, but this is sort of that old model of, yeah, well, it's based on longevity or seniority, and it really shouldn't be. It should be based on who is best wired and best equipped to do this job from a head heart briefcase and baggage perspective versus how long you've been here. And uh they had a they had a few people leave because they felt that they were shortchanged and not given that opportunity, which is unfortunate. But I think this gets back to as organizations start to think about how do we optimize job fit across the enterprise, do we have an effective training and development program to equip people to move into new roles? And then if we decide to go out on the street, do we have an effective onboarding process to get them up to speed as fast as possible? Because some of the cons, I mean, we we had looked at some of the pros and cons. Uh, we I put this into Grok and said, hey, just give us the pros and cons of promoting from within. And some of the cons are limited talent pool because uh there could be potential skill gaps. So if you don't have a training and development program, you'll suffer there. Potentially risk of stagnation, group think, complacency. Uh there could be resentment in office politics. Uh but the other thing that uh was interesting is that the there can be a higher failure rate. So initially, when you promote from within, you could get better productivity or a less drop in productivity, but over the long term, the failure rate actually can be magnified when you're not looking outwardly, if that makes sense.

Karen Shulman 11:56

Well, I think it does make sense because I I think statistically what we've both read is that maybe 25% of uh internal promotions uh don't go well. And I think for the reasons that you just said, they they fail certainly at maybe senior levels, because they don't have the broad scope of what it takes to really perform in the

Objective Data And The Whole Person

Karen Shulman 12:25

role.

John Broer 12:26

And we ask the question when we're working with clients and whether it's their talent acquisition group or the executive team, and they're starting to think about you know the growth or or expansion or enhancement to and and the roles that need to be filled, we like to ask the question, well, is the person in the room in the building or are they out in the street? And you know, the ones that say, oh no, no, you know, they're in the you know, we always promote from within, it's like you need to think from outside the building. Because 25%, that's a pretty significant number. I mean, if you think about the cost associated with a bad hire or a bad promotion, 25% of the time, those numbers add up very quickly. And as we found out, as you and I have evolved and we've realized, man, that is so avoidable when you have the proper data to look at the whole person. And and another thing, Karen, that really prompted this, and you and I were talking about this last week, is you know, we have a client that is looking at what we call an organizational rebuild. And what that means is that in order for them to grow, in order for them to manage their expansion, the expansion of their business, they need to restructure the executive team. Because they have some people that are going to be retiring and they have a new person coming in. And whenever we do this, we say, okay, well, let's take the leader or the future leader and put them in the middle. And what are the functional roles that we need to put around that person absent of any actual person or name? And that is a hard thing to do because they say, well, so-and-so is in finance, and well, we think that person would be the CFO. And it's like, whoa, whoa, whoa, hold on, time out. You have no evidence other than the fact that the person is already in the organization. And so what we would do is say, let's identify whatever those roles are. So it's operations and finance and human capital and sales and marketing, whatever the or technology, whatever those key roles or functions need to be around that senior leader, and identify and create the job targets and the job profiles, and don't even think about a name of a person. And that's where we say, now let's go out and get the data of the people that are already here and see who is the optimized fit. And that frightens some people. This individual I'm thinking of specifically, it's like, oh, that's that's gonna be difficult because they have some data already, and you and the feedback was, I don't think this person's gonna be right for this role. And that is gonna blow things up. So what what would you what do we say to a client like that?

Karen Shulman 15:14

I totally understand the the thought process of that's gonna blow things up if we don't promote from within.

John Broer 15:20

Right.

Karen Shulman 15:20

But if you promote from within and the person does not does not succeed, it's not just a blow up. It's still gonna blow up because the person is not the right fit, but then there's a chain reaction. There is the chain reaction throughout the rest of the organization where, you know, some people might look at it and say, well, you you put the person in the role, you didn't help them do the role.

John Broer 15:46

Right.

Karen Shulman 15:46

Um, or you put the person in the role and everybody knew that person wasn't going to be successful at it, you might have as well. So it's a there's a whole different type of blowing up that can happen when you try to fit, it's like trying to fit a what a round uh round peg and a square hole. Square peg and a round round hole. Yeah.

John Broer 16:10

Thank you. Yeah. Yeah. Okay, you and I can talk about this and we go, of course this makes sense. Logically, this makes sense. Now I realize that there are emotions involved, there are personalities involved, sometimes there are long-standing relationships

Org Rebuilds And Role-First Thinking

John Broer 16:25

involved. And I mean, I've been told, I think we've both been told, say, well, we we can't overlook this person. They've been here for years. It's like, okay, well, what is the objective of this organization? Is it to accommodate whomever has been around and most loyal? Because loyalty is great. It's just that if if it supersedes effectiveness in a particular role, like you said, the blow-up will be significant. And okay, I'm going to give another example. I love examples, and of course, I won't use any real names, but um, we've had a couple of these examples where the CEO, a senior leader, is tolerating what I would consider to be really substandard performance from a chief financial officer. And there were long-standing relationships involved. This person has been with us since the beginning, they've grown with us. But what happened was is the organization grew and this person's capabilities were it were just they they reached a limit, but they they elevated this person beyond their capabilities. And in one case, refused to uh, despite the fact that, and I and I said this this is he's not the right person for this role. I'm I'm just telling you right now, and this went on for years, this person is not wired to do this role at this level, at this strategic level. And it ended up costing, first of all, they had to fire him, and it ended up costing this organization in all kinds of ways. So the blow up, the extension of the blow-up, Karen, is exactly what you pre what you said, and it's easy to predict. But I I get frustrated when it's like, we're here to help you do this. The data tells us that this is just not going to work out long term. The emotions that play a role in it are very powerful.

Karen Shulman 18:19

It's so interesting because really what we're talking about, and I think part of the hesitancy and part of the pushback and part of the resistance to the change in looking at the whole person and and really looking at objective data is the fear of how is this, how is the person going to react when they don't get the promotion.

John Broer 18:41

Yeah.

Karen Shulman 18:41

It's and that's not a real good basis for the decision. That's not being objective in your decision making of who to promote. It's very interesting to me, too, because you know, my brain goes to all right, when I when I look back in history, how did we promote from within? We took people that were technically wonderfully competent, and we just said, okay, now you're going up to the next level. Now you're going to be a manager.

John Broer 19:07

Right. Right.

Karen Shulman 19:08

That does not mean that you can take somebody who is technically wonderful and put them in a managerial role and expect them to succeed, especially if you don't have the training and if you don't have the support. Because the higher up you go in in organizations, the issues become more people-y, for lack of a better word.

John Broer 19:29

Yep. Yep. Yeah. Rooted in the emotion or the familiarity. Yeah. Go go ahead. Yeah.

Karen Shulman 19:35

And yeah, rooted in the emotions, rooted in the relationships. And what's going to happen if we don't do this? Well, what happens if you do do it and it isn't successful? I think that you have to take it to another step.

John Broer 19:48

Yeah. Absolutely. And and it is costly. I mean, I mean, the bottom line impact is huge. And in this one case I shared with you, it was it was really significant. I mean, the organization almost shut down. So it's not just an inconvenience not to promote from within. It can have ramifications that are really dire for the whole the for the rest of the organization and everybody employed there. So I think your point is very well taken. And we've talked so much about that, Karen, on the Boss Hole Chronicles is again, just because somebody is a great individual contributor, there is no correlation to the to the to any proof that they will be a great manager or supervisor. And that gets back to, however, if you see that in them and they want to do it, you ask them if they want to do it. It shouldn't be the only pathway they have to follow, but you should have a, again, a robust training and development program to help them, you know, move in that direction.

Karen Shulman 20:42

I'll go back to my comment about uh promoting from within, uh being being very helpful for retention. If you do not promote from within well, and you

Fear, Relationships, And Promotion Fallout

Karen Shulman 20:55

do put people in jobs that they are not ready for, not equipped for, not trained for, can't be successful, actually fail in those roles, right? You the impact on retention is is going to be pretty, pretty extensive. Oh, sure. Because people that work in organizations, they they also want they want to see people promoted from within, but they also want to see those people succeed. Sure. But if those people fail miserably, then the thought processes of employees that are looking for promotions are probably, oh my God, well, that person wasn't ready for that role. Are they going to set me up to fail just like that person? So the impact, again, talk about the blow up, the continual chain reaction could be pretty extensive.

John Broer 21:40

All that to say that you better have some really clear objective evidence of moving somebody into a new role. And by the way, this goes back to an several episodes we've had where we talk about having a robust individual contributor pathway because you're not forced to move somebody into a supervisory role. So absolutely, absolutely. Okay. So what have we established? We've established that well, both you and I have come to the realization that while an honorable, noble, and effective can be very effective, promoting from within has absolute limitations. And all of this, all of the movement of people, these wonderful people in our organizations, should be supported by objective data and evidence that this is a good move. So for our listeners out there, Karen, what would you say is, all right, what is a better solution if we start to move away from a commitment to promoting from within? What should we do? So what would your suggestion be?

Karen Shulman 22:42

I think that we have to certainly look more broadly at the at the talent pool within. And we have to look in terms of not just what they're doing now, what do we need them to do in the future? And are we prepared as an organization to invest in that person if we can recognize through objective data that the person is going to have some shortfalls, they're going to have some problems. Right. Are we willing to invest in them, groom them to be ready and to be able to perform in their new role? Right. Um, whether that's supplying mentors, whether that's supplying training, what whatever it is. I think we have to really think about, we have to, we have to be able to invest. I think, you know, in general terms, I think we really have to be thinking about, I think we have to think more broadly, that it's not, okay, fine to look for internal promotions uh perhaps first, but be willing to to and to admit uh this is probab just like the example that you shared, this this may not work with this person. They may not be equipped to do the job. And if so, then you're gonna have to look outside the organization. I do think that there is a component, if you want to not take a ding on your culture, to really have honest conversations, honest communication with employees to make sure that they understand we're gonna try to promote from within whenever we can and whenever it makes the most sense. But there are going to be times when we're gonna have to look outside the organization in order to get the expertise and the talent that we absolutely need.

John Broer 24:23

And so that would presume that um this philosophy, this this strategy needs to be very well communicated and early on and frequently, because if you are an organization that is traditionally committed to promoting from within, this is an enhancement, to use your word. This is an enhancement to what we've done before, because in order to grow where we need to grow, we're gonna have to add this to it. And and you don't want to take anybody by surprise, for sure. So, in other words, this is a bit of a,

The Hybrid Plan And Investing In Growth

John Broer 24:55

I guess, as as Sherm, as we found out in some of our research, Sherm would refer to this as a bit of a hybrid. Just saying, look, you know, internal promotions and looking outside the organization, you really need both, and because both will open up the opportunities for you to really address how do we want to grow, where do we want to grow, and how do we make this work? Because uh the from the from a financial burden standpoint, if you even if you go outside and you hire poorly, it's incredibly costly, just as costly if you take the wrong person internally and promote them or move them into the wrong role. And and once again, I don't know how you do this without objective data. You will never, ever be able to determine this based on somebody's resume or their briefcase or how you feel about them or sort of your subjective impressions of them. It has to be supported by objective evidence. I just can't stress that enough.

Karen Shulman 25:53

Yeah. And I totally, totally agree with you. And that I I'm I'm a convert, I think, because really what I described at the beginning of the podcast was uh, you know, it's just internal promotions. That's all you should be doing. And now I don't I think what we've what we've talked about today makes a lot of sense. You really have to you have to look more broadly.

John Broer 26:13

Yep, for sure, for sure. And I I want our listeners to know that, and we've we've referenced this, this isn't just about, you know, well, let's start looking externally. You have to think about how robust or effective is our onboarding program. So we bring people in, we help them assimilate and we get them to production as quickly as possible and effectiveness, build those relationships, and and then once they're here, training and development. You know, how let's invest in people growing, upskilling, and getting better. And by the way, when we do that, we may not have to go outside the organization. I remember, Karen, years ago, when I was building a uh I was working for an organization and was brought in to build their corporate learning, corporate university uh program. And I really wanted to figure out what is the best way to establish a budget for this? Because whenever clients come to us and they say, Hey, we'd like you to do this, and we say, Okay, what's your budget for this? And said, Oh, we really don't have one. Well, what's your, you know, what's your fee? And it's like, okay, that's that's a little bit lazy. So one of the things that I used as a benchmark was to say, look, if you were to try to come up with a budget for training and development, a really good program, just calculate $1,000 per employee. And people go, wow, that's a lot of money. It's like, well, if you want to do this well, yes. And by the way, you're probably going to invest, you know, in some employees, it might be less than $1,000 per person. And in others, it might be more, might be higher because they're moving into higher roles of responsibility. But if you wanted to establish sort of a benchmark, just calculate that. And that ought to be your annual budget for training development, could be some of the onboarding. But that to me, that shows a real commitment to a strong culture of learning, because I think that's what you want is a culture of learning and a way that we're going to equip our people to be better positioned for internal promotions. But just to sort of throw that in there as a budgetary concern, I think is lazy and it's just it's not effective.

Karen Shulman 28:28

I totally agree with you. I think it's um it's critically important. I think if those of us in business would do a calculation of the mistakes we make with the people issues, I think that $1,000 an employee uh would be quickly re recouped.

John Broer 28:47

Yes. Seriously. Yeah, that's a good point. That's a great point. Calculate your losses, and it's it's a lot more than probably what that investment

Budget Benchmarks And Closing CTA

John Broer 28:55

would be. Well, great. Well, Karen, Karen, any final thoughts for our listeners on this topic?

Karen Shulman 29:00

I would just say I think uh proceed with um looking for internal promotions with a broader perspective, uh a wider, a wider view. Okay. So that you really make sure that you are putting the right person in the right seat.

John Broer 29:18

That is awesome. Well, first of all, thank you. I always love and enjoy and value your insights, and I know our our audience does too. I well, I and I know our clients especially do. If you are one of our clients or a client in the future that gets to work with Karen Schulman, you are the better for it, trust me. I would encourage our audience members to go into the show notes and I will include episode, our episodes on Head Heart and Briefcase. You gotta know that. You got to understand how to look at people through the whole person model. I will also include the one on the individual contributor pathway and anything else that really helps you define a better way of identifying best fit candidates, whether it's internally or externally. So thanks again, Karen. It's been great.

Karen Shulman 30:02

Thank you, John. It's been fun as always.

John Broer 30:05

All right, everybody. Keep checking in for more episodes of the Boss Hole Chronicles, and we will see you soon. Thanks very much for checking out this episode of the Boss Hole Chronicles. It was so good to have you here. And if you have your own bosshole story that you want to share with the Bosshole Transformation Nation, just reach out. You can email us at mystory at the Bosshole Chronicles.com. Again, my story at the Boss Hole Chronicles.com. We'll see you next time.