Promoting leaders within vs. hiring externally

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🔗 Jake’s Picks

Must-Read Resources for Founders

🚀 Scaling Startups

• Tony Robbins: 11 Tips for Scaling Your Business (And Making It Last) (Yahoo Finance)

🧠 Founder Self-Development & Mental Health

• Forget Burnout: 5 Clear Signs You're Suffering From Rust-Out (Forbes)

📈 Productivity Hacks

• 46-year-old CEO who runs 2 successful startups: This is my productivity ‘cheat code’ (CNBC)

🛠 Tools for Scaling

• Gusto review (PCMag)

💡 Hiring Insights

• HR leaders used to be obsessed with recruiting. Now they’re developing the talent they already have (Fortune-MSN)

👀 ICYMI

• What to do with growth hits a wall (Scale Smarter Newsletter)

🏗️ Building vs buying your leadership team

As your company grows, you’ll go through so many decisions on what to build, when to build, and how to build it.  You can get so caught up in building that you forget it’s the who that matters just as much, if not the most.

Who builds, but even more importantly, who leads, is a decision that you’ll make over and over.  And although the gut reaction may be to just pick someone internal to your company, that may not always be the best choice.

When it comes to leadership, there’s no one-size-fits-all answer.

While some companies thrive in by cultivating internal talent, others may need help from external expertise.  The key is to know when to build leadership within your company and when to buy it through external hiring.

Who do you hire first: The IC or the leader?

Whenever a crucial team member leaves there’s always an urgency to fill the gap.  But do you hire an individual contributor (IC) to keep the work moving, or do you bring in a leader to set the direction and right the ship?

The answer is: it depends.

If execution is the priority: bringing on an IC first keeps the momentum going.

If the team lacks strategic guidance and direction: a leader should be the priority.

Try bridging the gap through an acting leader model.  Temporarily assign leadership duties to a high performing team member while you evaluate your leadership options.

You can also try hiring a “player coach”, someone who starts out as an IC but has the capabilities to grow into a leadership position.  In either case, this allows you to avoid the trap of hiring too quick from the wrong need.

The hidden risks (and costs) of executive searches

Hiring for leadership roles can be expensive and time-consuming.  Formal executive searches can take months, cost tens, if not hundreds of thousands in recruiter fees, and still result in a poor fit.

A bad leadership hire, especially at a high growth company, can drain time, create friction, and slow progress.

Instead, build out an internal leadership pipeline long before you need it.

Spend it up front on mentorship and leadership training programs and create the leaders you want from within by arming them with leadership skills.

And if internal talent isn’t ready to take on necessary leadership skills, try out a fractional recruiter or interim leader.

From advisors and consultants to leaders

For early-stage and growth companies, advisors are basically already part of the leadership team.  The right advisor provides strategic guidance when you need it, and helps with decision making for the rest of the leadership team.

Meanwhile paid consultants on contract are a low risk way of testing leadership talent before making a full-time hire.  When a consultant works with you long enough, you’ll get a sense for if they would be the right fit to bring into a leadership position.

With each scenario, you have an intimate, yet low risk opportunity to work with potential leadership candidates while they work on key initiatives for you.

⏳️ How to spend less time on leadership gaps

Should you spend time on hiring decisions to bring on leaders?  Yes, absolutely.  Should this consume your time?  Absolutely not.

The goal isn’t just to build a leadership pipeline for the company, it’s to create a system that allows you to step back from day-to-day hiring and leadership decisions over time.

A culture where leaders stay

Just create an environment where people enjoy working - simple on paper but hard to execute in reality.  We already talked about it here but the right culture not only attracts leaders but it inspires them to stay.

As you hire, whether it be IC’s or leaders, prioritize cultural fit.

For IC’s, when they buy into the culture, you’re already one step closer to producing leaders for tomorrow.  For the actual leaders, the right culture keeps retention rates high, resulting in less hiring emergencies for you.

The shortcut to smarter hiring

You can spend all day evaluating leadership candidates, thinking of internal and external candidates, but without a clear system, the process can quickly become cumbersome and subjective.

This is your cue to build a leadership scorecard.

Having a standard way of defining what leadership looks like in your company will help dramatically streamline the process building up and finding leaders.

Start with assigning a score on what skills matter the most from 1-5 on...

• Strategic thinking

• Decision-making under pressure

• Execution & accountability

• People leadership

• Culture fit

Now define success for the candidate through measurable outcomes...

For instance if you were hiring a head of sales:

• Increase revenue by X over Y period of time

• Build and scale teams from A to B reps

• Expand pipeline by X% of deals

Your scorecard should reflect the traits, goals, and fit that you’re looking for in your leaders.  Keep it standardized and easy to understand so that not only can you use it, but your leaders can take it on as well.

Always be recruiting

The best founders don’t just hire when they need to, they’re continuously building relationships with people who could be future leaders within their company.

When you’re always thinking about recruiting, as you meet people, you naturally keep your talent pipeline warm, reducing the risk of rushed decisions.

It’s important as a founder to keep mental notes of the people you meet and speak to as even if they aren’t the right person you’re looking for, they might be the connection you need to make the right introduction to your next leader.

Ultimately, the real shift happens when leadership hiring doesn’t feel like a scramble but a natural evolution of relationships already built.

When internal employees can smoothly transition into leadership roles while your culture continues to attract external candidates, you know you have built a leadership development engine that scales.

🎬 TLDR — Your Actions For The Week:

• Scale Your Team → Turn an IC into a “player coach”, who unofficially can take on leadership responsibilities

• Scale Yourself → Build a leadership scorecard to forecast who your next leaders are

Whenever you're ready, here’s how I can help:

💼 Hiring? I built an expert bench of recruiters from companies like Uber, Amazon & Spotify to run the full recruiting process for you. We’re on-demand, can flex up & down, and there are zero commissions or hidden fees—Learn more here.