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At the end of 2023, General Motors (GM) found itself in the midst of a serious management crisis. This was due to internal promotions at its autonomous vehicle subsidiary (Cruise). The internal power struggles and subsequent mismanagement highlighted the critical flaws that can arise when companies rely solely on internal promotions to fill leadership positions. A high-profile accident involving one of Cruise's autonomous vehicles further highlighted this flaw. In the end, GM had to intervene as majority owner, replacing almost the entire management team and laying off around a quarter of the almost 4,000 employees. The problems in the case were also linked to the fact that important management positions were virtually "pushed" to inexperienced people internally.
This incident at General Motors underlines an unspoken industry insight as to why IT management positions are often better filled externally. In this article, we therefore look at the most important advantages of external recruitment. These include how it mitigates internal politics, improves risk management, expands the network of industry contacts and brings in new perspectives. Let's look at these factors in detail today.
Politics and Confidentiality
The example of GM illustrates that internal promotions often lead to political problems within an organisation. The reasons are manifold: employees might perceive internal promotions as biassed, leading to dissatisfaction and low morale. This may not necessarily be due to nepotism, though that can be a factor. Additionally, internal candidates may hesitate to challenge the status quo because they are familiar with existing processes or know whom they would be up against. This dynamic stifles or slows down innovation and hinders effective decision-making.
External recruitment avoids many of these pitfalls by ensuring a more objective selection process. A covert and confidential search for external candidates allows the company to focus on finding the best fit without the influence and entanglements of internal politics. Anonymity during the recruitment process further enhances objectivity, ensuring that decisions are based solely on candidates' qualifications and their potential contributions to the company.
To achieve the highest level of objectivity, a thorough review is necessary to minimise hiring risks. This is another critical advantage of external recruitment, beyond avoiding internal politics. Let’s examine this point further.
Risk Mitigation through Detailed Processes
One of the biggest advantages of external recruitment is the rigorous assessment process that usually comes with it. External applicants have to jump through a number of hoops: extensive interviews, comprehensive background checks and various assessments to prove their suitability for the role. This thorough vetting process minimises the risk of a poor hiring decision – which can be extremely costly and disruptive for companies on a C-level basis.
Outstanding recruitment companies specialise in these detailed processes and ensure that external candidates meet the high requirements for IT management positions. By using a professional recruitment agency, companies benefit from their expertise and the execution of thorough and objective personnel assessments – so that the likelihood of an incorrect appointment is significantly lower than with an internal assignment.
In addition to minimising risk, other advantages of external recruitment become clear: active sourcing and new contacts that external candidates often bring with them.
New Networks and Active Sourcing
External candidates often come with networks of new contacts who also have years of industry experience. These networks provide valuable resources, partnerships, and opportunities that internal candidates may not have access to. This is particularly advantageous in the fast-paced IT sector, where collaborations and connections can drive innovation and strategic advancements.
By recruiting externally, companies can actively search for specific skills and experiences that are currently missing within the organisation, thus planning for the future. This precise approach ensures that the newly hired person is not only suitable for the current needs but also for future challenges and opportunities. In IT, where directions can shift rapidly, external recruiters possess the tools and expertise to conduct active sourcing effectively, identifying candidates who can have both an immediate and long-term significant impact.
Of course, new hires bring not only networks but also additional knowledge and experience.
Industry-Specific Knowledge and Experience
Candidates from outside the company often bring specialised industry knowledge and extensive experience that internal employees simply lack. External candidates bring insights from different companies and industries that can be invaluable in shaping the strategic direction and driving innovation within the organisation.
Internal candidates also often lack the experience required for high-level IT management positions. These positions require a broad understanding of various technologies, industry trends and management practices.
Here too, active recruiting can be used to identify leaders with the desired experience and skills, who can then be transferred to the company. Industry-specific expertise is often crucial for a forward-looking IT strategy.
Fresh Perspectives and Innovation
It is obvious that new employees bring new perspectives and, at times, innovative ideas to a company. These are things that are not only in great demand in the IT sector. Here too, external employees often bring new experiences and methods from different companies and sectors. These perspectives and experiences are important for driving innovation and improving or modernising (long-established) processes in companies.
For example, for successful digital transformations or the implementation of new technologies such as AI or other modern opportunities. Here, it's not just about what the new employees know, but also about how they think and approach problems differently. As they are unfamiliar with internal processes and approaches, this often offers a fresh perspective on existing challenges.
And that brings us to the last point – change management, accelerated by new approaches and perspectives to bring about innovations or necessary transformations.
Accelerating Change Management
External IT leaders are often better placed to drive and manage change within an organisation. This is because they are unbiased and therefore generally more objective. There is no emotional or mental connection to the status quo of the organisation. This makes it much easier to implement the necessary changes depending on internal politics or the constraints of the existing corporate culture.
Needless to say, change management requires a delicate balance between understanding existing structures and introducing new ways of thinking and working. Externals are usually better placed to maintain this balance and ensure that the organisation adapts and thrives in a fast-moving technological landscape. They are able to do this because they can make decisions more quickly and are not held back by old dependencies in any form.
Conclusion
The decision as to whether external leaders make sense compared to internal promotions must of course always be considered on a case-by-case basis. However, when it comes down to it, external appointments to IT management positions offer clear advantages. From bringing in new perspectives to avoiding internal politics, externally hired leaders are often better able to drive innovation, bring in new perspectives and knowledge, and implement change within organisations. The simple rule of thumb is that the larger the company, the greater the entanglement and interdependencies. It is just like in politics. Always think about the big picture.
FAQs: Why IT Leadership Roles Should Be Filled Externally
Q: Why might internal promotions lead to political problems within an organisation?
A: Internal promotions can be seen as biassed, causing dissatisfaction and low morale. Internal candidates may also hesitate to challenge the status quo, stifling innovation and effective decision-making.
Q: How does external recruitment help in mitigating internal politics?
A: External recruitment ensures an objective selection process, free from internal politics, focusing on qualifications and potential contributions without bias.
Q: What are the key benefits of a rigorous external assessment process?
A: Rigorous external assessments, including interviews and background checks, minimise the risk of poor hiring decisions, ensuring candidates meet high standards.
Q: How do external candidates enhance a company’s network and resource access?
A: External candidates bring extensive industry networks, offering valuable resources, partnerships, and opportunities that internal candidates may lack.
Q: In what ways can external candidates contribute to innovation and fresh perspectives?
A: External candidates offer fresh perspectives and innovative ideas from their diverse experiences, crucial for driving innovation and improving processes.
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