Senior Managers: Build or Buy?
At PFL, we focus hard on developing leaders from within. A number of our senior people were originally hired into entry-level positions, and worked their way into positions with progressively greater responsibility.
Nonetheless, I think a company needs to bring in some amount of outside talent in order to get fresh approaches and diverse experiences. Also, in a high-growth environment you sometimes don’t have the time to grow your own – you need certain skills, and you need them yesterday.
For a high-growth company, what is the right ratio of grown-from-within to “hired gun” managers? How do you decide which positions are served best by which strategy? I posed this question to a panel of experienced business leaders recently. Venture capitalist Paul Matteucci said he likes to see 80% home-grown and 20% hired, and the others mostly concurred. They also pointed out that hiring high-level talent is expensive, and there are significant integration risks. With home-grown talent, you generally have a very good idea of what you are working with, in terms of both skills and values.
We have only about a 50% success rate hiring in senior managers. Anyone care to share your experiences?