PROMOTION FROM WITHIN

 “A company growing at a very rapid rate may have such need for additional people that there just isn’t time to train from within for all positions. Furthermore, even the best-run company will at times need an individual with a highly specialized skill so far removed from the general activities of the company that such a specialty simply cannot be found internally. Someone with expertise in a particular subdivision of the law, insurance, or a scientific discipline well removed from the company’s main line of activity would be a case in point. In addition, occasional hiring from the outside has one advantage: It can bring a new viewpoint into corporate councils, an injection of fresh ideas to challenge the accepted way as the best way. In general, however, the company with real investment merit is the company that usually promotes from within.

This is because all companies of the highest investment order (these do not necessarily have to be the biggest and best-known companies) have developed a set of policies and ways of doing things peculiar to their own needs. If these special ways are truly worthwhile, it is always difficult and frequently impossible to retrain those long accustomed to them to different ways of getting things done. The higher up in an organization the newcomer may be, the more costly the indoctrination can be. While I can quote no Statistics to prove the point, it is my observation that in better-run companies a surprising number of executives brought in close to the top tend to disappear after a few years.” Phil Fisher

‘The company offering greatest investment opportunities will be one in which there is a good executive climate. This means, among other things, Management will bring outsiders into anything other than starting jobs only if there is no possibility of finding anyone within the organization who can be promoted to fill the position.” Phil Fisher

“Century Club companies also tend to develop leaders from within, using a deliberate process for leadership succession.” Vicki Tenhaken, ‘Lessons from Century Club Companies’

“Most old companies only bring in external candidates to fill executive positions as a last resort.” Vicki Tenhaken, ‘Lessons from the Century Club Companies’

“Visionary companies develop, promote, and carefully select managerial talent grown from inside the company to a greater degree than the comparison companies. They do this as a key step in preserving their core.” Jim Collins ‘Built to Last’

“We find that our value-infused top-performing companies are led by those who grew up with the core of the business – electrical engineering at HP or Maytag, mechanical engineering at Fluor or Bechtel. The star performers are seldom led by accountants or lawyers.” Tom Peters, ‘In Search of Excellence’

“Executive leadership in Firms of Endearment typically come up through the ranks. This turns into a big motivator for new employees, giving them hopeful and bright dreams about their future with the company.” Rajendra Sisodia, ‘Firms of Endearment’

“Developing leaders from within the firm appears to be one of the key differentiating factors in sustaining a business for the long term.” Vicki Tenhaken, ‘Lessons from the Century Club Companies’

“I have always felt that the most successful companies have a practice of promoting from within.” David Packard, Hewlett Packard

“We admire people who build up and develop their subordinates, because this is the only way we can promote from within the ranks. We detest having to go outside to fill important jobs, and I look forward to the day when that will never be necessary.” David Ogilvy

“Our company creates opportunities: Management that’s promoted from within, transfers to other offices around the world, and chances to move to new areas make us different.” Michael Bloomberg

“Almost all our management is ‘homegrown.’” Michael Bloomberg

“[Macquarie Bank] is the story of a place that has never gone outside its own ranks to recruit a chief executive in 53 years, where it’s nothing special to work there for two or three decades, and where people have no problem with a remuneration structure that only makes them rich if they commit to years of loyalty.” Joyce Moullakis

“Macquarie Bank tends to breed from within.” Peter Maher

“Our preference [is] to promote executive talent in-house whenever possible.”  Brad Jacobs

“Over its lifetime, Sherwin-Williams has benefited greatly from appointing leaders with long tenure within its own ranks.” John Cooke

“To the greatest extent possible, Federal Express strives to reaffirm the corporate philosophy established early on that “the people who are now working in the company are the future of the company” by pursuing promotion from within.” Fedex

“I believe we can train competence, but we can’t train commitment. That’s the primary reason we promote from within wherever possible” Chester Cadieux, Quiktrip

“Too many businesses today are run by second or third generation men, pleasant fellows who have been through college, think they know a lot, and come into the business from the top. How can they really understand it unless they have begun at the bottom and worked all the way up? Incidentally, when any worker feels dissatisfied with conditions and tells the president about it, he doesn’t need an interpreter. Each of them knows all about the situation, for they have had the same experience and speak the same language.” George F Johnson, Endicott Johnson

“All our executive positions are filled by men who began at the bottom and worked all the way up.” George F Johnson, Endicott Johnson

“Virtually all employees- including people whose last name Nordstrom – begin their careers on the selling floor, before they rise up through the ranks to become managers.” Robert Spector

“Clear evidence of this culture of upward mobility is that only a small minority of corporate officers (in specialized roles) came from outside the company; all of the others rose from the stockroom and the selling floor. Nordstrom employees universally appreciate the promote-from-within policy because it creates a culture where every manager and every buyer has gone through the same experiences as the people he or she is managing. No one manages until he or she has “walked in the shoes” of those being managed. You start at the bottom and do it the Nordstrom Way, and those standards are nonnegotiable.” Robert Spector

“Each senior officer of Publix has had a solid grounding of starting at the bottom and working their way up.” Pat Watter

“Panda Express continuously promotes from within, with the internal promotion rate from hourly to management positions being 70 percent; multi-unit managers and above are 100 percent internally promoted.” Panda Express

“Another consideration in human relations that has meant a great deal is the continual opportunity for advancement. Because we have grown so rapidly, we have created a great many opportunities for promotion. No matter how great the temptation to go outside for managers, we have almost always filled these new jobs from within; no more than a small percentage of our people have come into the company other than at the lowest level in their specialty. We have hired a few top scientists, lawyers, and other specialists, but with those exceptions all our executives came up from the bottom. This has been a great factor in maintaining morale.” Thomas J Watson Jr, IBM

“We had spent a quarter century or more developing what we considered the strongest culture in our industry – first by hiring more for attitude than experience, later by establishing career paths and promotion from within.” Isadore Sharp, Four Seasons

“Mars prides itself on promoting from within.” Steve Lawrence, Forbes

“One of my lessons has been to promote from within. Your home-grown talent and people are always better than external.” Peter Wilson, Reece Group

“Our Company knows the value of a tenured Team, which is why our philosophy is to ‘promote from within’ first. As management opportunities arise, we look first within the Company and promote those who have performed well, have the right expertise, and have shown leadership potential before looking outside the Company; however, we augment this philosophy by pursuing strategic hires with a strong emphasis on automotive aftermarket experience, customer service excellence, subject matter expertise, and strong culture fit.” O’Reilly Automotive

“At the heart of our culture is promote from within. Somebody like me that didn’t even go to college has been very fortunate to grow up with a company that promoted virtually 100% from within, especially in store operations. I had the fortune to grow up in our stores and run districts and regions. And we’re extremely proud that really, over the last several decades, we’ve never had to hire outside the company for our field leadership.” Brad Beckham, O’Reilly Automotive

“When people join our company, they don't come for a bus stop; this is a career. When we hire someone, they find out when the job above them becomes available, they've got a shot at it.” Barclay Simpson, Simpson Manufacturing

“Mr. John often reminded employees: “You don’t have to be brilliant; we teach ordinary people to do extraordinary things.” And, he backed this promise with a policy of promotion entirely from within the company. Thus, he provided management opportunities earned by work achievement for thousands of employees ‘ who might not have been considered qualified for such positions on the basis of formal schooling alone.’ William Walsh, ‘The Rise and Decline of The Great A&P’

“Personnel – all promoted from within, which was Greggs’ policy whenever possible.’ Ian Gregg

“Many of our associates at ABC Supply have started in the warehouse, have started loading the roof, and they now run multimillion dollar businesses as branch managers or district managers, truck drivers, whatever it is.” Brad Messer, ABC Supply

“Business model expertise is our most important leadership attribute in ITW And it’s not something we can hire from the outside.” Christopher Oherlihy, Illinois Tool Works

“Richer Sounds also tries to promote from within. Each of the other nine board members has risen through the ranks.” Richer Sounds

“While Danaher believed in developing an expertise in a function within a single business, the bias was to promote and retain executives within Danaher. As a result, approximately three out of every four senior promotions were filled internally and roughly one-fifth of senior managers were promoted to a new position every year.” B Anand, Danaher

“Promoting Managers from within. Self-discipline is also a necessary and typical quality of ALDI executives – one that promotes the company’s core cultural values and rules of frugality, publicity shyness and fairness towards others, especially suppliers. Practising this type of asceticism day on day is no small feat, and there are some who completely fail at it. This has always provided cogent arguments for recruiting trainee managers from within the company. ALDI’s executives, in general, have come up through the ranks, through the various departments in sales and supply chain management. Among today’s regional managers, for example, you can find former district managers, sales managers, administrative managers, distribution centre managers and even store managers. These trainee managers know the organisation, the ‘front line,’ and have been initiated into the corporate culture early on.” Dieter Brandes

“As much as possible we hire from within, to keep the company culture strong. And then we train, and take the time to train, as though our future depended on it.” Yvon Chouinard, Patagonia

“[Managing organic growth] allowed us time to promote people from within rather than hire professional management from the outside, ensuring we could maintain our culture.” Jim Koch, Boston Beer Company

‘The company had a long tradition of promoting from within. A-B even maintained the old German brewing tradition of der Sternewirth, which granted all employees a thirty-minute free beer break every day.’ Bitter Brew, Annheuser Busch

“Old Dominion is dedicated to promoting from within through opportunities on all levels in our company.” Old Dominion

“Tom Hennessey believed in bringing others along, developing and promoting from within and sharing the wealth.” Tractor Supply Company

“Tractor Supply’s policy of promoting from within the organization and that ‘substantially’ all those in leadership positions are people who started at the sales counter or in warehouse positions.” Tractor Supply Company

“One of the things I am proudest of at Fastenal is the opportunity we give people to excel. Most of the people who join us come out of a school with little expertise in our product line. We see their potential and give them an opportunity to achieve. Most of our executive officers started in entry level positions in Fastenal stores.” Robert Kierlin, Fastenal

“I decided that promotion would always come from within, except when we needed talent we didn’t yet have.” Isadore Sharp, Four Seasons

“McDermott’s emphasis on self-development programs was a major plus for employees – and the Association. Better qualified employees resulted in almost 90% of vacancies being filled from within.” USAA

“We are in a fortunate situation to be able to recruit 95% of our upcoming top management from our own ranks, and this is certainly another one of our success factors.” Reinhold Wurth

“The best-run companies develop their own managers from within – rarely do they seek outsiders. In fact, it’s a sign of weakness when a company goes outside too often for management personnel. The morale of the company is likely to suffer; people may begin to feel threatened and think, ‘No matter how well I perform, an outsider will probably get the position I want.’” Mary Kay

“Publix almost exclusively promotes from within, and every store displays advancement charts showing the path each employee can take to become a manager.” Publix

“We’re a promote-from-within company. Everybody knows that in this company you start at ground level. Look at all our vice presidents, our senior vice presidents, all the way up to Tom Englert, our CEO. They all started at the same place. We’ve been around fifty years and we’ve never had a layoff.” Ron Archer, Discount Tire Company

“If I were to bring someone in at a high level without having worked in the stores, I may as well get in my care, drive around to the stores and slap every one of the guys in the face – because that’s literally what I’d have done to them. And I would never do that.” Bruce Halle, Discount Tire Company

“It’s not easy to get a job at the higher levels at In-N-Out. Every associate who works in or leads our stores was hired at the entry level, then worked their way up. Strategically, that means that every operations leader has done the exact jobs as the associates they’re leading. They understand each one of those tasks, hands on, all the way up the line. They earned their way into their roles.” Lynsi Snyder, In-N-Out Burger

“Patterson’s ventures in hiring stars were all failures and the men who really helped him make the company were all men who had come up through the ranks!” National Cash Register

“Every promotion in the business is made from the ranks. That has been the practice from the beginning. Every chief, from the officers of the corporation to the superintendents and directors and assistant directors of departments, has begun by working at the bench or in the vats, and earned his steps upward by his industry and his skill. In stimulating zeal this rule of action is as effective as Napoleon’s reminder that every soldier carried a field marshal’s baton in his knapsack. Outsiders are welcome to come in at the bottom of the structure; never as directors, for George F. says no self-respecting man would stand for it. Day by day the workers see their companions stepping up; therefore they work and think so that they can step up, too.” Endicott Johnson

“Ikea promotes the highest levels of management internally, which ensures stability and understanding of the criteria for success.” Anders Dahlvig, Ikea

“Promoting from within has given us a reliable pool of people that share our common goals and truly understand the nature of our business.” Chester Cadeux, Quiktrip

‘When you build a strong team, it allows you to promote from within, and that creates great loyalty, because the good jobs go to the people who have earned them. Over 80 percent of our management today started in entry-level positions.’  Stew Leonard

“We need good people to help us. At Stew’s, most of our management people were promoted from within. We found that we are way better off growing our own people for our management jobs. We feel that loyalty is more valuable than operational skills. We can always teach skills, but loyalty is something you can’t teach.” Stew Leonard

“Marquee CEOs have high failure rates. In general, seasoned executives who have time with the organisation have the highest success rate.” Joe Scarlett, Tractor Supply.

“Whenever we can we hire from within, we’d much rather do it that way. If you have to hire your top people from outside your company, it just doesn’t say too much for the people you’ve got.” Charles R. Walgreen III

“All of our people have thus come up from the bottom. The head of the factory started as a machinist. The man in charge of the big River Rouge plant began as a patternmaker. Another man overseeing one of the principal departments started as a sweeper. There is not a single man anywhere in the factory who did not simply come in off the street. Everything that we have developed has been done by men who have qualified themselves with us.” Henry Ford

“The [Fedex] company policy was ‘promote from within,’ which offered enhancement opportunities to reward hard workers.” Vance Trimble

“Our culture takes time to become ingrained and we’ve found that people who rise from our hourly ranks tend to be our best performers. Quite a few people who today lead the company started in hourly rates.” Kent Taylor, Texas Roadhouse

“A big red flag for me personally, and I think about that in our firm, anytime a portfolio company brings in leadership from the outside to me that’s sort of a red flag that they haven’t built the depth of talent within the organization.” Paul Black WCM

“It has always been our policy to fill vacancies by advancing qualified employees whenever possible. I’m happy to say that the number of occasions when we had to bring people in from the outside for a particular job is negligible, and this should occur even less frequently in the future because of the fact that we are making headway in developing more and better employees.” Peter Kiewit, Kiewit

“Given [Mainfreight’s] policy of only promoting from within, if the branch managers failed to pick winners, and were afraid to employ people who were better than they were, then Mainfreight’s very survival was in question.” Mainfreight

“In almost every case, it is most advisable to find a CEO successor from within the organisation, someone who knows the culture and the players, represents the values of the organisation, and has demonstrated an ability to consistently achieve its objectives.” Robert Rosenberg, Dunkin Donuts

“We believe it is critical to our success to promote managers from within who will serve as examples of success for other to follow.” Enterprise-Rent-A-Car

“All of the people that are running the Costcos today are people who have been with us 10 and 12 and 15 years prior to becoming a warehouse manager. When you’re going to promote from within and grow the talent from within the company, you have to be mindful of what your limitations are.” Jim Sinegal, Costco

“We found ourselves with quite a high staff turnover. My solution was to promote from within, and this proved to be very successful. An assistant manager from one branch was encouraged to apply for the vacant manager's position at the neighbouring branch, and this in turn created a chance for the counter staff in the first branch to become assistant manager. We gave staff opportunities they were not getting in other organisations, and this fostered loyalty and excitement among them. It meant we had some very young managers - a couple were only 20 - but they knew they'd been given a chance to prove themselves, and they worked hard to show my faith in them hadn't been misplaced.” Gerald Ratner