Adding a new executive to your scaling team is one of the riskiest decisions you’ll make as CEO. It has the opportunity to dramatically improve your company’s performance across key metrics, but it also has the potential to drastically set your company back, more than you probably think. We see a lot of CEOs (and have been guilty of this ourselves) that fall in love with the idea that a big name executive is the only thing you need to solve your current problem and unlock your next stage of success. The truth is that that no matter how successful an executive has been at a different organization, that doesn’t mean it will translate to your company.
In many cases, you likely won’t know the full impact of your executive hire decision for 6+ months after their start date. And if you include the time it takes to identify and recruit them you’re easily looking at 9 to 12 months of total time (from the initial decision to hire) before you have a real assessment on the impact on your key metrics, company culture, and strategic direction of the company. 12 months is an eternity at a startup, and wasting it going in the wrong direction can be very costly.
For this reason, it’s often a safer bet to promote talent up from within your company first before you look externally, even if they have less experience than an external executive hire. Promoting a star performer that’s already bought in to your vision and your work style, and has already contributed to your company’s success to date, is often a better investment than hiring externally.
Promoting from within can also strengthen company culture as the rest of your team can internalize the career opportunities that are available as they see good work rewarded with more responsibility.
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