CHAPTER THIRTEEN
PROMOTING
When people ask me how to get promoted, I always have the same answer: start doing the job you want to get promoted into, and do it well, while still doing your own job. Eventually, the title will follow you.
For a lot of managers and CEOs, it's hard to think of a marketing coordinator they hired as a potential marketing manager, director, or VP. It's a big trap to watch out for, and an important habit to break. Every organization should aspire to promote employees to more senior positions as the company matures and grows. This is especially true of startups.
RECRUITING FROM WITHIN
Whenever possible, groom and promote people from within your organization. It's good to keep talent within your company, and it's good for you to hire younger (and more easily molded) talent. And the possibility of a promotion is a great motivator. Hire all your senior staff from outside, and you'll be removing another incentive for more and better work.
While these considerations apply just as well to any company, big or small, there are other considerations that are more specific to startups.
When a major pharmaceutical company needs a new sales leader, they have an obvious and large pool of candidates to draw from: current or former sales leaders at other major pharmaceutical companies. What if a company that specializes in email deliverability needs a new consultant? Or a company specializing in 140-character updates needs a new SMS engineer? There aren't nearly as many “comparables” to lean on.
Many startups aren't simply building businesses; they're creating new marketplaces. If that describes your company, you have a particularly compelling reason to promote from within: you don't need a new hire to only acclimate to your culture; you have to train him in nearly every detail of your (brand new) business.
You can't always hire from within, and sometimes it's not particularly important that you do. (We recently needed to hire an international finance person; nobody in accounting took it the wrong way when we looked outside because no one had that skill set.) Before ever promoting someone within your organization, be careful that you're not about to create another instance of the “Peter Principle.”
Promotion Criteria
In order for promotions to feel like achievable rewards for outstanding performance, rather than ad hoc and arbitrary appointments, it is crucial to have clear criteria for promotions in place. At Return Path, we have “levels” that each job is mapped to, so it's clear when someone can become a VP, and when they're not ready. Don't make the system too rigid or too general: titles often fail to translate between departments, and you need the ability to make a promotion outside these criteria without being accused of violating ironclad rules.
At Return Path, each job falls into one of four broad levels—Learning (newer in a career), Applying (more senior, usually still an individual contributor), Guiding (senior individual contributor or manager), Shaping (senior manager and up).
Each year along with our performance management process, we evaluate every employee along five dimensions—each of which has several categories:
- Growth: Self-awareness, Incorporates feedback, Learns from experiences, Leverages strengths.
- Professionalism: Role models, Reliability, Builds community, Lives by RP values.
- Execution: Takes ownership, Reasons Analytically, Collaborates, Makes Decisions.
- Impact: Listens, Communicates, Builds Relationships, Develops others.
- Strategic Thinking: Develops vision, Instills passion, Prioritizes business levers, Drives innovation.
Employees need to show meaningful progress against each of the above dimensions and categories in order to be promoted to a new level.
For the full “Return Path Expectations” guidelines, go to the web site www.startuprev.com.
APPLYING THE “PETER PRINCIPLE” TO MANAGEMENT
Back when I worked in management consulting, I always used to wonder how it was that all the senior people at the firm I worked at spent the majority of their time selling. They hadn't been trained to sell, and a lot of the people great at executing complex analysis and client cases hated selling.
Should a company take its best salespeople and turn them into managers?
There are those of us whose personalities don't work in a management context, and there is nothing wrong with not managing. The usual notion of promotion to management by merit has always been a curiosity to me. If I am good at my job, why does it mean that I would be good at managing people who do my job? In other words, a good “line worker” doth not a good manager make. Hiring people specifically to manage and lead teams is preferable to promoting someone in your organization who's ill-suited for such a position. The latter happens too often, to the detriment of many companies and individuals.
For those of you not familiar with the Peter Principle, the short of it is that “people are promoted to their level of incompetence.” At that point, they stop being promoted. By then, every post in the company tends to be occupied by an employee who is incompetent to carry out their duties.
We've had numerous examples over the years at Return Path of people who are great at their jobs but make terrible—or less than great—managers. The problem with mistakenly promoting someone into a management role isn't only that you're taking one of your best producers “off the line.” The problem is that those roles are coveted because they almost always come with higher comp and more status. If a promotion backfires, it generally (though not always) dooms the employment relationship. People don't like admitting failure; people don't like “moving backward”; and comp is almost always an issue.
Sometimes there's not much you can do about this, even if you know it's a mistake to promote someone. We had a top-performing sales rep once who was dying to be a sales manager. She begged for the job. We didn't think she would make the shift to manager well based on how she interacted internally. At some point she begged enough—and threatened to leave if she didn't get a management position—so we gave it a shot, with all the caveats and training in the world. What happened? It didn't work out. In the end, she left the organization because she couldn't handle a demotion.
What can be done about this? We have tried over the years to create a culture where being a senior individual contributor can be just as challenging, fun, rewarding, impactful, and well compensated as being a manager, including getting promotions of a different sort. But there are limits to this. One obvious one is at the highest levels of an organization, there can only be one or two people like this, at most. A CEO can only have so many direct reports. Another limit is societal. Many companies define success as span of control. You get a funny look if you apply for a job with 15 years of experience and a $100k+ salary yet have never managed anyone. After all, the conventional wisdom mistakenly goes, how can you have a big impact on the business if all you do is your own work?
The fact is that management is a different skill. It needs to be learned, studied, practiced, and reviewed as much as any other line of work. In most ways, it's even more critical to have competent and superstar managers, since they impact others all day long. Obviously, people can be trained into being managers, but the Peter Principle is spot on: just because you are good at one job doesn't mean you should be promoted to another one.
There are lots of ways of meeting this challenge, but the one I've found most successful is moving people to new and interesting roles within the organization, though not necessarily management ones. We call it “scaling horizontally.”
SCALING HORIZONTALLY
As important as it is to help people scale by promoting them whenever possible, it's also important to recognize when that can't work, and figure out another solution to retain and grow those people.
The traditional way to promote people is to scale them “vertically”: to senior or management roles within their existing function or department. As I just wrote, this approach is highly susceptible to the Peter Principle. Another approach is to scale employees “horizontally” by moving them into different roles on different teams. This allows them to grow, develop, and, over time, become more senior and more valuable to the organization.
We've had instances over the years of engineering managers becoming product managers; account managers becoming product managers; product managers becoming sales leaders; client operations people moving into marketing; account managers moving into sales—I could go on and on. We've even had executives switch departments or add completely new functions to their portfolio.
Moves like this don't always work. You do have to make sure people have the aptitude for their new role. When moves like this do work, they're fantastic. You give people new challenges, keep them fresh and energized, bring new perspective to teams, and retain talent and knowledge. When you let someone scale horizontally, make sure to celebrate the move publicly so others know that kind of thing can be available. Also, be sure to reward the person for their knowledge and performance to date, even if they're moving laterally within your org chart.
PROMOTING RESPONSIBILITIES RATHER THAN SWAPPING TITLES
A couple of years ago, Brad Feld wrote a post on his blog Feld Thoughts about how title inflation had infected startups with the same virulence with which it proliferates through major corporations:
Suddenly, title inflation is everywhere. I've seen more business cards or email sigs lately with adjectives like “executive” or “senior” or “senior executive” or “special” or “chief” in front of more traditional titles (e.g., “vice president”). The “chief” one is especially bizarre since it's not always obvious whether the CSO is a “Chief Sales Officer” or a “Chief Security Officer,” which in and of itself is a problem.
I first saw this in my previous job at MovieFone, where I was struck that people at Hollywood studios had titles like chairman of marketing (really?). There are lots of problems with titles: they don't translate well from department to department, they don't track to comp in any consistent way, and they create the wrong kind of pretty meaningless set of incentives.
Brad suggested a radical alternative: think of every senior member of an organization as the “head” of something. Is your controller a director or an SVP? Does it matter? He or she definitely is the “head of accounting and financial reporting quality supervision.”
I'm not ready to make that switch altogether or to eliminate titles as some companies have. I do think about Brad's proposal every time I make a promotion. Am I simply turning a “director” into a “vice president,” or am I putting someone in charge of a new responsibility? If it's the former, it's a waste of time—with one key exception, which, as I said at the beginning of this chapter, is when the person is already doing their “next” job.
Reversing a Promotion
Like reducing someone's compensation, demoting an employee—specifically, reversing a bad promotion—almost never works. It's not impossible, but it's hard enough that you should try something else. The easiest solution is to move the person into a completely different role. If they got a promotion in the first place, they were probably talented, valuable employees. They were just put in the wrong role. Move them into a more appropriate one. The one exception to this role is with somewhat senior people where the rapid growth of the company may have just outpaced their development, but where they're still excellent in their department.