Should you promote from within?

Q. I need to put an additional manager in place. I have an internal candidate that I am considering promoting, but I’m not 100% sure she is ready. How can I know if she is ready and what can I do to help ensure she succeeds as a manager?

A. First, congratulations! Most of the small business owners we know want their businesses to grow. However, as you have found, if your business continues to expand and you hire additional employees, at some point you will need to add a layer of management between you and the primary workers.

This is one of the toughest transitions for business owners because adding management in your organization means transferring some of the decision making power to those managers. It means giving up a measure of control and that can be difficult for the small business owner who has been in charge of everything since the beginning.

However, we digress. You asked if you should promote one of your current employees and how to know if they are ready for management responsibilities. You are facing the “make or buy” decision. In other words, should you hire employees with potential and then mentor, coach and invest in them so that when a management position becomes available in your organization, you have an employee ready to step in, or do you go outside of your organization and buy the talent you need.

We are big fans of promoting from within. It has many benefits: • You know these employees—their strengths and weaknesses • The employees know your company and its culture. • Promoting from the ranks can increase morale and decrease turnover within the entire organization as employees see the rewards of hard work, dedication and loyalty. If you are going to promote from within you need to start this process well in advance of the need. No one is born knowing how to manage employees. This is a learned skill. It takes time to create a manager. We wish we could give you a simple formula for determining when an employee is ready to manage others, but it does not exist. However, there are ways to increase success rates. • Supply the employee with opportunities to manage—before becoming a manager. One company we worked with put a high-potential employee in charge of a task force. She had the opportunity to lead a group and practice management skills. • Supply the employee with coaching. The same company provided this high-potential employee with an executive coach who helped her to develop specific management and interpersonal skills. • Give the employee with feedback. The high-potential employee received feedback from the coach, her manager and the members of the task force. This candid feedback helped her to further develop and refine her skills. • Help the employee to develop a professional network. The organization encouraged the high-potential employee to network with other young professionals within their industry and in their community. The employee was able to take advantage of learning and professional development experiences, further enhancing their skills. The process was not quick. The organization invested in this employee’s development for more than a year, exposing her to various experiences. In the end, the business had an employee who was ready and excited to step into a management role. It comes down to the “make or buy” decision. If you need a manager right away, you can buy talent. However, well-trained, experienced managers are expensive. In contrast, making your own managers by investing in high-potential employees has many benefits. However, it does take time. We wish you much success.