Why do IT leaders prefer external hires?
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Tech Realities Every Executive Must Hear: Insights from a Forthright Advisor
I have often seen external hires preferred over internal promotions. While new hires bring fresh competencies, they can also disrupt processes and lower morale. External leaders offer new perspectives but lack company insight. Balancing between external and internal hires is essential for fostering innovation and keeping up the employee motivation.
In my almost three decades in the IT sector, from technical to executive positions, I have very frequently encountered situations where external hires were preferred over internal promotions and growth, for reasons that were not always clear to me at the time. This trend, though contentious, is driven by a mix of strategic and sometimes less savory reasons. Drawing from my experiences and interactions with fellow IT leaders and techies, I realized that evaluating this practice requires a balanced approach. Thus, I decided to examine both the Benefits and Drawbacks of each factor influencing the decision to hire externally. This topic is often unpopular and rarely openly discussed by hiring managers, and even less so by recruitment service providers.
Fresh Perspectives
Benefits - External candidates bring fresh perspectives and innovative approaches, preventing stagnation and encouraging continuous improvement. In my own experience, when I transitioned between roles, my external viewpoint helped revamp the IT strategy of the new organization, aligning it with industry trends and driving efficiency gains.
Drawbacks - New ideas can disrupt existing processes. While working in a recent project, the introduction of AI-powered solutions met resistance from long-standing employees who felt their contributions were undervalued. Integrating these innovations without alienating the team required significant effort and sensitivity to their concerns. These situations usually are manageable, but it is not all impossible for the transformation processes to fail due to this specific human factor.
Expertise
Benefits - External hires often have unique skills or expertise that address specific strategic needs efficiently. In one of my previous engagements, hiring a cybersecurity expert from outside was crucial for developing robust security protocols that our internal team, despite their competence, couldn't have implemented alone.
Drawbacks - Internal candidates may feel demotivated if they see no opportunities for skill development and career advancement. I’ve seen talented, and high integrity, team members leave because they felt overlooked, which underlines the importance of balancing external recruitment with internal growth opportunities.
Objectiveness
Benefits - An external leader can provide an unbiased assessment of an organization’s strengths and weaknesses. As a new joiner, my fresh perspective helped identify inefficiencies that internal teams had grown accustomed to. However, this was due to organizational enablement and support that I had as a newly hired leader.
Drawbacks - Lack of understanding of the organization’s history and internal dynamics can lead to friction. Some of my early decisions, uninformed by the company’s nuanced culture, caused initial resistance and time needed to recover. This experience taught me the importance of quickly learning and adapting to the internal environment.
Competitive Advantage
Benefits - External leaders bring a network of industry connections and a deep understanding of market dynamics, providing a competitive edge. When I took on one of the new roles, leveraging my external network was instrumental in forming key partnerships that propelled our growth.
Drawbacks - Over-reliance on external connections can undermine internal networks and partnerships, weakening organizational cohesion.
Gaps in Leadership
Benefits - External hires can quickly fill leadership gaps, ensuring continuity and stability. I have had colleagues who have been hired in interim executive roles . This organization brought in an external CIO during a transitional period that helped maintain strategic direction and operational stability.
Drawbacks - This approach can highlight weaknesses in the organization’s leadership development programs, signaling to employees that the organization lacks faith in its internal talent pipeline. Persistent reliance on external hires can demoralize internal staff and lead to long-term retention issues.
The Less Noble Reasons
Power Control
Benefits - External candidates can neutralize internal politics and power struggles, ensuring smoother transitions. Once upon a time, an external hire helped our team mitigate internal conflicts and align the team towards common goals.
Drawbacks - This tactic can also be used by current leaders to suppress potential internal rivals and maintain their power, fostering a toxic work environment. I have observed situations where external hires were strategically brought in to disrupt internal power dynamics rather than for their expertise.
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Politics
Benefits - Strategic external hires can create new alliances and expand the organization’s influence and network, beneficial for growth. This was evident in one of my roles , a couple of years ago, where new alliances facilitated by external hires propelled our expansion into new markets.
Drawbacks - This tactic can also serve to deflect blame and protect the current leadership’s reputation, rather than addressing underlying organizational issues. I witnessed situations where external hires were used to shield existing leaders from accountability.
Accountability
Benefits - An external leader can act as a buffer, taking the heat off current leaders and allowing them to focus on strategic initiatives. This is often seen as necessary during a particularly turbulent period.
Drawbacks - It can also reduce accountability for past decisions and ongoing issues, potentially perpetuating problems rather than solving them. This was a challenge I faced when external hires were used to cover up for previous leadership mistakes rather than addressing the root causes.
Career hopes
Benefits - External hires might be necessary to bring in expertise not available internally, ensuring the organization has the skills it needs.
Drawbacks - This can block internal growth opportunities and demoralize employees, leading to a loss of internal talent and decreased morale. I have painfully witnessed how this demotivation can lead to high employee turnover rates and a weakened talent pipeline.
Nepotism
Benefits - External hires can break cycles of internal favoritism and nepotism, bringing in more merit-based leadership. An important element of hiring is that the hiring manager tends to hire similar people as herself/himself. This can turn out to be very positive, looking at it optimistically.
Drawbacks - Conversely, external hires can also be influenced by personal connections and favoritism, perpetuating a different kind of bias and undermining meritocracy. I have encountered scenarios where external hires were chosen based on personal connections rather than their qualifications. This wave of hiring continued until silos were created within the organization and even within Engineering and Development teams.
Reputation
Benefits - High-profile external hires can enhance the organization’s public image, attracting more talent and investment. I do remember an occasion where this was strategic, with the aim of boosting our market position.
Drawbacks - These hires can also serve to boost the personal reputation of current leaders, focusing on short-term image rather than long-term success. This focus on image over substance can detract from meaningful organizational growth.
Striking a Balance
External hires can introduce fresh ideas and innovative approaches, refreshing the organization. However, new approaches can disrupt established processes and cultures, causing friction among long-standing employees. While external candidates can fill specific skill gaps and meet strategic needs, this can demoralize internal staff who feel overlooked.
External leaders offer unbiased viewpoints and clear assessments of strengths and weaknesses, but may lack understanding of the organization’s history and dynamics, leading to misaligned decisions. Industry connections from external hires can provide significant advantages but may weaken internal networks and partnerships.
Quickly filling leadership gaps with external hires ensures continuity, yet highlights weaknesses in internal leadership development, signaling a lack of faith in the internal talent pipeline. This can lead to long-term retention issues and a demotivated workforce. Managing power dynamics through external hires can neutralize internal politics but may suppress potential internal rivals, fostering a toxic environment.
Strategic hires can expand influence and network but might deflect blame from current leadership, reducing accountability. High-profile external hires enhance public image, attracting talent and investment, but may prioritize reputation over sustainable success.
In conclusion, while hiring external candidates has its merits, it is crucial for IT leaders to strike a balance. A thoughtful approach that considers both external and internal talents will foster innovation and growth while maintaining a motivated and cohesive workforce.
If this sounds familiar and you'd like to share your story, I'd love to hear from you .
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Tech Realities Every Executive Must Hear: Insights from a Forthright Advisor