Engineering Management - Internal Promotion


This is the third part of a series of notes regarding my thoughts during my time in engineering management at Facebook. Read the intro here.

Promotion from within

Promoting your leaders from within is relatively well-known advice for building healthy long-term organizations. It is also important for small and rapidly-growing startups, but upholding a policy of internal promotion for a hyper-growth startup is both uniquely vital and difficult due to a number of reasons:

1) Due to the inherent hyper-growth nature of the company, the organization is growing rapidly, so the need for new people is very high. Individual contributors can be sourced from the outside, but when finding leaders, closing off the external pipeline is therefore even more difficult and must be made as a conscious and deliberate choice.

2) External sourcing is often viewed as a "magical" source of perfect candidates ("there are so many possible candidates!"), but it is not. A successful manager needs to understand core elements of the company culture and values, including what makes the startup uniquely successful and what steps it needs to take next. An impressive resume or even the memory of their performance by others who worked with them in larger companies is not a reliable indicator of their ability to do this.

3) Your organization is unlikely to have enough fully-qualified internal candidates. Startups are usually populated by strong individual contributors and the leading candidates among them are typically the strongest such people, so they are (1) an immediate loss to operational capacity if promoted and (2) not guaranteed to be as skilled in management as they are at doing hands-on engineering.

However, hiring managers and executives externally is undesirable:

1) Hiring managers or executives is inherently very risky.

All hiring is ultimately a gamble. Despite interviewing and screening well, you really have no way of knowing for sure if the candidate you hire will turn out to be a dud or a superstar. When it comes to hiring engineers, the success ratio is never better than 80%. With managers and executives, it's never better than 50%.

This means that for an externally-sourced manager, you have an even chance of getting someone who might not just be no good at the job, but could be fatally bad for your organization. Getting a bad engineer is harmful, but usually not fatal - a bad manager or executive can be, and your organization may not recover.

Remember that experienced managers have also engaged in hiring, so they are usually quite skilled at sounding good in an interview.

2) There is a very high probability that an externally-sourced manager will slow you down.

This is because the primary source of experienced managers is larger companies. Small companies cannot produce many managers (there just aren't enough people to manage, or if there are, it becomes a large company), so the vast majority of managers come from large companies. There is a low probability that external managers will understand, preserve, and strengthen the internal culture. They will tend to bring their own outside culture, which is typically that of the larger company. This is the single greatest potential force that can slow down your internal operations, usually by introducing process and methodology significantly before it is optimal to do so (the reason is usually "preparing the organization to scale").

While the company or your engineering department remains below a certain size (specifically, 150-250 people, the Dunbar number), organizational culture is still nascent and is dominated heavily by the personalities of individuals and group convention. Leaders have a disproportionate effect on shaping the culture, so a single new leader can easily shift the entire organization into focusing on things which are not vital to the startup's real growth and market viability, and cause it to lose its competitive edge.

More than one startup has ended up inadvertently shooting itself in the foot when, after taking funding in an A- or B-series round, decides it should now hire a professional manager or VP to "help scale up the team." Instead, what often happens is that the team gets scaled up, processes are put into place, execution slows way down, market position falters, the manager or executive is not fired quickly enough, and the company fails to make it to the next stage.

Therefore, successfully implementing a policy of internal promotion is both vitally important but uniquely difficult to do. Here are some ways to do it:

1) Source management candidates who are willing to join as individual contributors. While the company remains below a certain size, it's is eminently possible for highly talented technology managers to join as individual contributors and rapidly rise into positions of leadership, and they should be encouraged to do so.

This is also a good sieve for finding the occasional manager who has spent time in a larger company but who can effectively manage at a small company (or be rapidly indoctrinated with enough of the culture to do so). It is also an effective acid test for technology leaders who truly possess individual technical acumen and talent (see #5: Technical Leadership, later to come), because they have the confidence to re-prove themselves over and over again. Look for people who have direct experience in a similar startup mentality, usually in the following two groups:

- managers who've started startups themselves but for one reason or another (e.g. acquisition) had an opportunity to learn how to be a professional manager in a larger company.

- managers who've worked at a startup during a phase where it was smaller than the current size of your company.

NEVER hire a manager who has never had experience working at a company as small as yours. They will be utterly unable to comprehend how to fit into or run your operations without using the lens of "we need to do this the way we did it in my experience at a larger company." This is almost certain death for your department and, if your department is engineering, your company.

2) Using either the few experienced managers you've been able to internally promote or failing that, outside executive coaches, intensely mentor your more inexperienced managers to develop their skills. Typically, because many of your management candidates were less than fully-qualified, they will demonstrate potential but still be unsure in their new roles. Until they are comfortable and practiced in their roles, both they, their peers, and their teams will exist in a state of some distress.

Special attention needs to be given to new managers, primarily in addressing ways in which they need to reach a level of comfort regarding the ambiguities of their role, their people management responsibilities, and general confidence-building. Left unattended for too long and combined with the stresses of a hyper-growth startup, it can result in failure (usually demotion or self-demotion) and a morale setback to the team.

The key trade-off that is being deliberately made here is that with proper and intense mentorship, an internal candidate with a deep grasp of company culture, leadership potential, and a track record of success in the service of company goals has a higher probability of success as a manager in your organization than an externally-sourced candidate whose true skillset, culture, and motivations are ultimately questionable.

Long-term effects:

Once the organization's size successfully passes the 150-200 people ("Dunbar") stage with its culture intact and inculcated into its operating conventions, it becomes self-reinforcing and outside managers can be gradually introduced directly into those positions without internal promotion (continuing to fill the majority of leadership positions via internal promotion is a good idea anyhow) in order to season the skills of the management cadre. The culture is now stronger than the influence of any one new manager, and will become a strong passive force in eliminating candidates who do not fit that culture, thus becoming self-reinforcing.

There is a famous set of quotes from Jamie Zawinski that talks about the difference between people who joined Netscape in "the early days" vs those who joined later. The early people joined "to make the company great," while those who joined later did so "because the company was great" and, he felt, this was key to the later lackluster performance of the company.

The motivation of those who join your company later, especially after it has achieved externally notable success (or "worse," wild financial success) are highly suspect - they are likely to be oriented around money, security, conservatism, or some combination of the three, i.e. "because the company is great" and are unlikely to share the early core values. This is undesirable, and it can be one of the things that will sap your organization's longer-term success and vitality. Executive hires prone to these motivations can be very detrimental to the types of decision your later-term company will make.

The way to combat this is to have successfully promoted and earnestly developed enough of your earliest potential leaders into leadership positions, thus creating a pipeline dominated by those who joined very early on and whom you know are there "to make the company great." New people who join can be sourced into this pipeline, forming an ongoing system that indoctrinates people with the proper values before placing them into influential leadership positions.

Originally posted here on 2009 Oct 28, by Yishan Wong.