Friday, March 23, 2007

Promotion From Within - Pros and Cons

The company that I currently working for has a strong tradition of "promoting from within". What that means is that most (is not all) of the management and leadership positions are filled by internal candidates. The people who now hold leadership positions in the middle and upper ranks of the company often have 15, 20, and even 30 years of tenure with the company. When the company publishes bios of its leaders, it goes to great lengths to point out how each of these individuals started at the bottom as young pups and eventually worked their way up into the roles that they have today. For most of these folks, this company was their one and only employer during their working life.

I am something of an oddity within the ranks. Unlike most of my peers, I have spent a siginificant amount of time working for a variety of other companies before landing here (four to be exact). Even though I have five years of service with the company, I am still considered the "new guy" because I probably have the least amount of tenure of somebody at my level of experience. Recently, I was pondering whether my employers emphasis on seniority and longevity when it comes to advancement is a good thing. Selfishly, being a relative outsider, this policy hurts me in a way, but I am trying to separate my own situation from what it good for the company.

Obviously, perferring people with long tenure has its advantages. There is a certain continuity that comes from having people with a lot of years of service in leadership positions. By the time they get into those roles, they have a good understanding of the "nuts and bolts" of the company and how things work. This can only be an advantage when it comes to decision making.

In addition, people who have been around a long time have been acclimated to the "culture" of the company. While this concept of company "culture" might seem quaint, it does have a practical benefit. It does give people a sense of community - of being a part of something great than oneself. People with a long tenure develop an emotional attachment to the company. They "care" about the what happens to the company moreso than an outsider, and this feeling of attachment is only enhanced by the company's culture. Obviously, there is also attachment from the fact that most employees also own sizable chunks of company stock, so money is a big motivating factor.

However, the main downside of this emphasis on tenure is the danger that its leaders suffer from a "group-think" mentality. Because many of the company's managers "grew up" in the company, they have all been indoctrinated in the same point of view and the same way of doing business. New ideas aren't introduced into the intellectual ecosphere, and the ones that do get introduced might have a hard time of gaining traction. This can lead to the same old ideas being trotted out when their time has come and gone. After all, if you have only experience things in a certain way, then you will always tend to gravitate towards those same tried and true methods that you are familiar with.

The other issue with valuing tenure is that it tends to harm bright, ambitious people who might be otherwise qualified for leadership positions but who haven't built up enough equity in the company. In a true meritocracy, you would place the best person from the job in each position, regardless of their years of service. If you have some young go-getter who has management potential, why hold them back just because they don't have seniority. There should be a way to fast-track people like that without making them wait to pay their dues. Otherwise, that high-flier will end up leaving the company for a better position rather than wait for their turn.

At the risk of sounding vain, this is the situation that I feel like I am in. I see people above me who are in their positions because they have been around for a long time. Don't get me wrong. Many of them are good people. However, there are a few who have taken advantage of their longevity, to put it mildly.

How does a company balance the continuity that comes from valuing tenure without becoming an insular organization? Obviously, tenure should be taken into account because, all other things being equal, a person with seniority is preferred over someone who isn't. However, that should stop the company from also advancing people who might have less company experience, or even bringing in people from the outside in certain situations in order to benefit from cross-pollination. While I am not advocating totally de-valuing tenure with the company, I think there needs to be a healthier balance here to ensure that, for every position, you have the best person for the job doing that job.

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