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The Eternal Dilemma - Internal Promotion vs External Appointment for Senior Executive Roles

When it comes to appointing a Senior Executive position, it’s vital that the right person is chosen to ensure continued business growth and success. So it can be a real challenge to know whether that person already exists within the business or whether an external hire is likely to deliver more success.

Critical Success Factors

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In helping to determine whether an internal or external candidate is likely to be the best appointment, the existing business strategy and performance is the critical component that needs to be considered.  There are 3 typical corporate dynamics at play as follows:

  1. Strong existing business performance and projected growth

A strong corporate culture and stability are two elements that are crucially important for successful corporate performance, especially in larger companies. In these cases, bringing in an external appointment could be disruptive and negative, creating instability. An internal candidate will understand the business, culture, politics and accepted do’s and don’t's of being the business leader.

However, this becomes more complex for smaller businesses whereby they may require that external experience and expertise to make the significant leap that is often required to become a larger enterprise. Internal individuals may excel in their technical role for the business, but this may not translate well to Senior Executive levels which usually require greater strategic foresight and different skill sets. In addition, avoiding the ‘complacency’ trap by externally recruiting executives with a broader perspective may achieve significantly better results. 

  1. Stagnating performance and/or significant change in strategy

Significant change is always a challenge for the majority of people so it might be a big ask to expect it from an individual who has been in a business for some time. It’s likely they will have become embedded within the business culture and politics which may well hinder any change paths or blind them from seeing where the change is needed.

It is far more likely an external appointment will be able to implement changes and improvements quicker, as they won’t have any existing emotional baggage or political affiliations within the business.  

  1. Under-performance and/or fundamental strategic change

An external appointment in these situations is more likely to result in a successful turnaround of a business. In addition to the benefits highlighted above of an individual not having any emotional or political attachments within the business, they are also far more likely to have wider industry experience of dealing with really tough market conditions.

This situation can often arise from factors outside the control of the business.  Competitor activity, disruptive technologies, macro-economic aspects and political decisions such as Brexit, can result in a daunting set of conditions that an internal candidate is unlikely to have much experience in dealing with.

Senior Executives in these situations require incredibly strong and resilient leadership skills as well as substantial experience in solving crises.

Two pronged attack

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Of course, the prudent and most thorough approach for ensuring the best person is appointed to a Senior Executive role is to undertake both an internal and external recruitment process.

Whilst this may feel like a cumbersome and lengthy strategy, it is well worth investing in for business critical roles that will help shape and determine the future success of the business. This is also likely to be the only way of benchmarking internal candidates and ensuring the best calibre candidate gets the role.

Furthermore, the external recruitment process needs to be more thorough than simply external advertising of a role on a job board, company website or other media publications. These will only attract candidates who are actively looking, and often the best performers are kept happy by their existing employer so are not actively looking. Engaging with an Executive Search firm is well worth the investment of time and money. They will research the whole market to identify the best possible external candidates and utilise psychometric profiling techniques to truly benchmark all candidates against the same criteria.

A good Executive Search firm will usually offer to include internal candidates within their search process. This helps to ensure all candidates can be assessed on a consistent basis enabling accurate benchmarking to take place.

Summary

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The decision to appoint a Senior Executive from within or outside the organisation requires not only an assessment of the candidates’ personal hard and soft skills but also an assessment of the company’s current performance and strategic intent.

However, it’s also recommended good practice for business critical roles to undertake both an internal and external recruitment process in order to benchmark both sets of candidates. Utilising an Executive Search methodology for the external element should ensure the business is in the best position to identify and appoint the best possible candidate for their future business success.

If you’d like to find out more on how Executive Search can help you find the best Senior Talent, including an assessment of your internal candidates, please don’t hesitate to contact us on 0207 160 6996.

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