The success of both home grown and externally hired managers varies widely depending on the organization's business challenges, the candidate's capability and potential, and the organization's effectiveness at making and leveraging the right choice. Read on for more insights.

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While some research shows that internal promotions out-perform external hires, the fact is there are no absolutes
either way. Results vary widely based on the organization’s business challenges, the capability and potential of the
candidate, and the organization’s effectiveness at making and leveraging the right choice.
Generally speaking, external candidates perform better in the short run and internal candidates perform better in the
long run.The difference often depends on whether the organization is in a short-term change situation or a long-term
sustain mode.The diagram below shows the more common business conditions or drivers that favor one approach or
the other. Note that this list is not meant to be an exhaustive listing of the various conditions.
Learning Curve: While the external hire may come in with more management experience having already performed
in a similar role elsewhere, it takes time to appreciate the culture, understand the unwritten or unspoken “rules,” and
learn the unique business drivers and processes of the hiring company. Most internal candidates won’t have that steep
culture and process learning curve.And the internal candidate has an added advantage of already knowing the different
personalities and relationship nuances that exist in the department or company. So learning curve requirements often
favor internal candidates.
Honeymoon Period: When external managers join a new company, they are still an unknown and have a chance to
build their reputation from scratch.As they do, they are usually given more leeway to make mistakes early on. Internal
promotions, however, take their reputations with them into their new roles along with the organization’s expectation that
they will hit the ground running.Thus, many of their peers and higher-up’s aren’t as patient or forgiving as they are with
external hires. External hires usually enjoy a longer honeymoon period.
Role Clarity: Internal promotions struggle with role clarity more than external hires do.When someone is promoted
internally, there’s a common but weak assumption that they know what the role entails and what their new boss expects.
And the internal candidate is usually reluctant to ask for any clarification or do anything that might draw question to their
suitability. External candidates generally do more due diligence about the role, expectations and near-term goals all of
which expedites their ramp-up.
Employee Loyalty: Usually, employee loyalty is enhanced when manager roles are filled internally. It sends a signal to
the organization that strong performance can pay off. If employees and managers feel that an internal candidate should
have been given or considered for the job, support and cooperation for the external hire could be weak.Also, external
As shown in the center column on the above diagram, there are at least six key factors that act to either support or frustrate a newly promoted or hired manager in their success.
WHICH MANAGERS SUCCEED – HOME GROWN
OR OUTSIDE HIRES?
Bill Thomas, SHRM-SCP, SPHR, Managing Principal, Centric Performance, LLC.
Continued…
When to Promote Inside: Success Factors When to Hire Outside:
• Long-term growth / sustain mode
• Strong culture / brand advantage
• Want to retain succession pipeline
• Maintain incentives to perform well
Learning Curve
Honeymoon
Role Clarity
Employee Loyalty
Key Relationships
Coachabilty
• Struggling or terminated incumbent
• Tough decisions needed
or imminent
• External variables changing
• Internal lack of essential skills

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hires bring with them an inferred threat of wanting to clean house or bring in other outsiders they’re more familiar with.All
of this can create loyalty or dysfunction challenges that need managed.
Key Relationships: Many companies strive to ensure that each new manager (promotion or hire) raises the caliber of the
overall management team.This often means the new manager must be able to bring new ideas to the organization or lead
the organization into new areas or capabilities. Internal candidates often have pre-existing relationships that can limit their
objectivity and willingness to introduce change or make tough decisions for the company’s benefit. External candidates
don’t typically have that emotional constraint and often have a more developed external network they can tap into for fresh
ideas and insights.
Coachability: Oftentimes, internal promotions are more coachable than external hires – especially for front line manager
roles.An internal candidate’s weaknesses are more likely to be known upfront, whereas a new hire’s growth needs may
not be obvious early on. Internal candidates are usually more humble about their skill gaps, while external hires may come
in with an ego that makes it hard for them to seek or take advice.Where internal candidates must learn how to manage
others or manage at the next level, external hires often bring management styles and habits that must be unlearned before
they can be effective in their new company.
Conclusions:
The build versus buy question does not have an answer that‘s right for every situation. It really depends on a number of
factors, some of which we’ve described here. One thing that is certain – organizations need a blend of both home-grown
and externally recruited managers.
As you think about your own organization’s management needs and approach to meeting those needs, the suggested
practices below may help you make and support the best decisions possible for your situation.We have used these practices
to effectively address the six success factors described above and other keys to management success.
If you’d like to learn more about these suggested practices, or have other questions or challenges in your management selection, capabilities or
pipeline, please don’t hesitate to contact us. Bill@CentricPerformance.com or call toll free at 866.302.9099.
WHICH MANAGERS SUCCEED – HOME GROWN
OR OUTSIDE HIRES?
Continued
Outside Hires – Helpful Practices
Cultural Fit Assessment – that identifies the alignment or
gaps in the hire’s values, adaptability, business maturity,
motivational fit, management styles and preferences.
A deliberate on-boarding and assimilation plan – that
prioritizes and facilitates the new hire’s introduction to key
stakeholders, processes and resources.
A 180-day transition plan – that consists of four stages: ask
and learn; digest and decide; position and communicate; lead
and implement.
Inside Promotions – Helpful Practices
Assessment of Potential – that identifies the alignment or gaps
in the individual’s motivational drivers, adaptability, capacity
for growth, job and career interests and drivers.
Development Plan – that identifies the gap in skills and/or key
experiences, and the resources, activities and people who will
support closing those gaps.
A 180-day transition plan – that expedites the hand-off’s
between incumbents, level-sets peer expectations, and
prioritizes key deliverables over the first 6 months.

3. 14
The Pittsburgh Human
Resources Association
offers many valuable
networking and
education programs
throughout the year.
Keep an eye on the
PHRA online event
calendar for a complete
and up-to-date listing
of all programs. Register
for an upcoming event
today!
July 18
HR Communication
Survey: Findings and
Taking Action
PHRA Training Center
HRCI & SHRM Credits
July 19
Speed Networking Event
Southpointe Golf Club
July 25
PHRA Member
Appreciation Breakfast
Panera Mount Lebanon
(Galleria)
July 28
Annual Diversity Summit
PHRA Training Center
HRCI & SHRM Credits
August 1
The Five Behaviors of a
Cohesive Team
PHRA Training Center
HRCI & SHRM Credits
August 28
Fall SHRM Certification
Prep Class Begins
August 29
PHRA Member
Appreciation Breakfast
West Location TBD
August 30
Rockin’ HR
DoubleTree – Green Tree
September 7
Understanding and
Developing Critical
Leadership Skills: An
Action-Based Workshop
PHRA Training Center
HRCI & SHRM Credits
October 10 & 11
PHRA Annual Conference
& Exhibition
DoubleTree – Green Tree
HRCI & SHRM Credits
Pittsburgh Human
Resources Association
One Gateway Center
Suite 1852
420 Fort Duquesne Blvd.
Pittsburgh, PA 15222
Phone: 412-261-5537
www.PittsburghHRA.org
2017 EVENTS

4. 1
PERSPECTIVESJULY 2017