Promotion From Within: A Prime Generative Management Practice for Business Expansion

I’m sure you want as much control of your growing organization as you can possibly get. Who doesn’t? With frequent environmental and technological changes occurring all around us, it’s difficult to believe we can control anything. However, the fact is, you can control many things impacting your growing business. It is worth your time to discover what those things are and direct only the changes you need toward your goals. This is true if you are pursuing Generative Management-the ability to hold a grand vision in mind while designing and implementing multiple definitive operations or enterprises.

First, you can stay true to the architectural design or blueprint of your business. If it is designed thoughtfully and throughly, you can maintain the boundaries of your business as changes show up.This will help you correctly analyze each component and how it is affected by changes initiated by you, the environment or technology. Hiring a new employee requires time and energy for the assimilation of the new person into your business design. In the beginning stages of your business development, you’ll make several new hires. Using good management practices, will allow you to assimilate these people into your Systems with little disruption and limited negative financial impact. With all the energy and time you will put in coaching and training your employees, promoting from within seems to be the logical next step.

Beth Greenwood shared an interesting insight: “Jim Collins, author of ‘Good to Great,’ is credited with coining the comment ‘get the right people on the bus.’ If you want to promote from within, you need a pool of well-qualified talent from which to choose. Creating that pool starts with the hiring process. Set high standards and spend all the time necessary to find the right people. If your organization is fast-paced, entrepreneurial and dependent on teamwork, select employees who have similar styles. Never hire someone just to fill an empty slot. Train, coach and support your employees; be tough but kind and maintain high standards. In addition to providing you with good candidates for promotion, these activities will strengthen your organization.”

Following is a summary of the advantages of promoting from within:

The initial advantage is, you can develop primary competencies that you know you will need in your 3, 5, or 10 year projections. An example would be training someone to manage one or more of the Systems you are currently managing. Secondly, you’ll be able to evaluate the skill level of the employee overtime time. Third, promoting from within helps you make easy, seamless transitions as you grow your business because the employee is well grounded in your Culture and Systems.

Research by Matthew Bidwell, an assistant professor at Wharton focused on the costs and effectiveness of job-hopping. He had the idea that employers were unaware of the real costs of hiring from the outside. Susan Adams reported, “Indeed, Bidwell found that not only do external hires get paid more, but for their first two years on the job, they receive significantly lower marks in performance reviews. External hires are also much more likely to get laid off than are those promoted from within.” She also reported that Bidwell examined seven years of employee data, from 2003–2009, from the U. S investment baking unit of a financial services firm, which included information on 5,300 employees in multiple jobs, from traders and research analysts to support staff. Results of the study indicated ”everyone had to work to bring the new hire up to speed, the performance of the whole unit declined.”

We can conclude from Bidwells’ studies that hiring from within saves money and is more efficient.

There are fundamental benefits of hiring from within: These are adapted from “Promote from Within: Good for morale, Great for Business”by the Nevada Small Business agency.

1. Money is saved when you hire from within because the cost of making a new hire can be expensive in several ways. The cost of advertising or using an industry recruiter is pricey and productivity is lowered because the new hire will need time to learn your business design and performance expectations.
2. A mentioned above, the learning curve is short because of previous experience in your company. In many cases, you can just prepare the space for the new position and share you objectives. The employee is then ready to go because he or she understands how the work done will affect your current Systems.
3. When you invest a lot of time into training and coaching your employees, your business will prosper if you retain those well trained employees. This also leads to employee motivation because they see a chance for job security and advancement.

With the benefits in mind, we can now consider a brief description of methods for hiring from within.

1. Groom leaders from the first day with your training and coaching plans. Hire people with a view toward your Future vision.
2. Have a thorough understanding of all your employees. Know their strongest knowledge. skills, abilities and talents.
3. Develop an effective training and coaching System that will prepare people for a position a few years down the road.
4. Design and maintain a strong benefits package. It’s well worth the effort and cost.

Growth, replication and Generative Management will develop more efficiently and effectively with promotion from within.

Related: “20 Directives for Small Business Success: Do or Die” also the GeniusCore Business building Podcast