> If I went looking for another startup to join at some point in the future, I would specifically look for an exec team or founding team that could cite examples of building up high performers for internal promotions — and swiftly recognizing and rewarding those already having impact outside of their role-defined scope.
Yeah in my experience this seems very rare. The default in most start ups I've seen is that when a new level in the hierarchy becomes necessary and/or available (i.e. the existing person leaves) is to hire externally.
I guess the rationale is that if everyone is doing some necessary job and they are good at it, it's better not to mess with it. But needless to say, I find this very demotivating. Much more so than if I am passed for the promotion but a colleague gets it, because I know that if there is a culture of promotion and progression, I might have a fair chance next time. But if its always external hires, then my whole career at this company is in the same position I started with.
It is not just startups, no wonder the age old wisdom is always-be-leaving if you want to get a raise/promotion.
I think the rational is more like paying as little as possible for keeping smart people around who could outperform their title. Switching jobs has a very real cost for employees, especially in harder economic times. Some will leave nonetheless, some will quite quit but some will stick around just fine.
Something I've seen countless times is the initial employees complaining that the company "is not what it used to be" when it grows to a certain level and, in my experience, they refuse to adapt and leave or are fired.
I've become that person. In small teams a lot of magic happens and the feeling is somewhat addictive. I don't think it's wrong to long for times when the company had more output, at a higher quality, while using fewer resources. The past will never repeat itself but it seems meek to not attempt to preserve the good parts.
I thought you were implying it's a failing of grouchy employees ('refuse to adapt') - I just think that might be sometimes hypocritical as companies love to talk about their culture etc., if you change what that is (and previously talked about it) then you should expect some negative reaction to it, and if you don't (or talk about how you're keeping it the same) then it seems unfair to criticise someone saying it's changed or not liking that.
(Personally I think I'd rather companies uncultured/not talking about it, but if they do it should make sense and be consistent with actions.)
I was replying to the point where OP says companies end up hiring externally when they grow and need new layers/functions.
Most of the time (in my experience), it's not that employees want to take those new jobs but upper management fails to promote them and more that the company is becoming something they don't like (which makes sense, otherwise they wouldn't have joined a startup if they prefer big corps)... and they don't want to adapt.
It's all perfectly fine, IMHO. People move on. Companies move on. Some people will adapt (because they like the new reality, or they need to like it, or..) and others won't. And by adapting I'm not saying become "better" but different only.
I think the worst case is when both parties don't realize it and don't take action. Then you get upper management hiring externally, saying the employees that helped the company grow are bad employees, etc. And the initial employees saying upper management is clueless, sold out, lost their way, betrayed the culture, etc.
Startups scale faster than management skill sets. Being able to manage a team of 10 doesn’t translate to managing an of org of 100, let alone 1000. I’m not saying that’s what’s going on in your case, but it’s a legit reason in some cases: avoiding the Peter Principle.
In my experience, this "avoiding the Peter Principle" is rare for people who are founders/friends-of-founders.
I think that's where the complaint comes from. It's mainly that a lot of competent people get skipped because founders and friends of the founders keep just hiring their external favorites rather than promoting and rewarding people who are getting the company to where it is.
What's your sample size? I mean sure, nepotism happens, this isn't a surprise. But for competent founders, the ability to successfully execute the role at hand is the primary consideration. To be coldly rational about it: whether someone was a high performer at the previous stage or if they were a close personal friend are both irrelevant data points. The only thing that matters is can they be effective in the next stage. Obviously this is a judgement call, and founders can get it wrong (they're only human after all), but the Peter Principle is a real thing and it can be deadly when someone is promoted beyond their capabilities during hypergrowth. This can be a very tough pill to swallow for someone who got the company where it is, but it doesn't make it less true.
In my experience promoting too much from within just means all the flaws the founders had will never get better since the people who put up with them (or don't see them) got promoted. And if you're one of the few external hires who has the experience to see them you're probably in for a bad time.
I work for a larger start up (or a scale up) that is doing decently. Majority of the top leadership was promoted from within sometimes all the way from IC to VP and I think it shows. The org would definitely benefit from someone that would have seen that level across multiple orgs.
> The default in most start ups I've seen is that when a new level in the hierarchy becomes necessary and/or available (i.e. the existing person leaves) is to hire externally.
Count me among the people burned by this.
I joined a startup with promises of being promoted when the department grew. I was required to hit certain performance metrics, which I exceeded. Then it came time to hire and suddenly the position was only open to people with oddly specific qualifications I didn't have (example: required an MBA or experience at company greater than # in size, where the # was chosen to be just barely more than the biggest company I had worked for)
It’s usually not the founders strong suit to grow talent, so they farm that out to other companies and hire the growers. That’s been my experience. Where it misses is that most other companies or managers can’t actually nurture talent.
Yeah in my experience this seems very rare. The default in most start ups I've seen is that when a new level in the hierarchy becomes necessary and/or available (i.e. the existing person leaves) is to hire externally.
I guess the rationale is that if everyone is doing some necessary job and they are good at it, it's better not to mess with it. But needless to say, I find this very demotivating. Much more so than if I am passed for the promotion but a colleague gets it, because I know that if there is a culture of promotion and progression, I might have a fair chance next time. But if its always external hires, then my whole career at this company is in the same position I started with.