Episode 9
· 16:41
Welcome back to opening the c suite. I'm Mike Corey. And we had a previous episode which came audience requested, which got us down this trail of talking about when it does not work out with a senior executive and how the CEO, the board goes through the process of deciding and executing on removing a senior executive, which is a very real thing that happens. Now that episode kind of gave us a launching point for talking about today's topic which is the decision between an internal hire
Corey Ferengul:Yep.
Mike Shannon:Or or an external hire. So an internal promotion or an external hire, which from an employee standpoint, I think there's, a natural mindset of I'm continuing to climb the ranks when that, you know, c suite role opens up. If I'm next in line, it's naturally mine.
Corey Ferengul:Right.
Mike Shannon:Now the context of some of the reasons why it doesn't work out with a senior leader actually play a role in whether the board decides on an external hire versus that internal promotion. So we're gonna open that up now. Corey, you've been in much larger companies than me. I come from a start up scenario where we had some of this, but can you kinda lay the groundwork for us of the logic that goes into you're the CEO or the board thinking about internal promotion or external hire for a senior role.
Corey Ferengul:Yeah. It's all got to do with candidate and and and what the needs are in the moment.
Mike Shannon:Okay.
Corey Ferengul:Right? So, you know, as I've said before, when you are letting go an executive, it is an opportunity to rethink the organization. And sometimes rethinking the organization is a reason to let go an executive because the needs have changed. And when you're doing that, it becomes very clear at times like, oh, this person has the skills. But if we organized it in this way, that person succeeds.
Corey Ferengul:I can't count how many times I was on a whiteboard saying, well, this person is I see him as a high potential, but not for the way that team is structured today. But if the team was structured like this, what would I do? Could I should I restructure it or not? Right? So, but as the individual, the very first thing is how do you expose yourself as that high potential?
Mike Shannon:Yeah. Right.
Corey Ferengul:Right? And and a lot of it is through your accomplishments. It's not through kissing up to others.
Mike Shannon:Yeah. Right.
Corey Ferengul:It's through getting the job done and showing competence. Yeah.
Mike Shannon:Yeah. Okay. So let's say I've, you know, shown competence, I've got a track record, and now I'm next in line for whatever that kind of c suite senior leadership role is and I don't get it they go with an outside hire. What may have been the factors that led to the outside hire?
Corey Ferengul:Yeah. So number 1 is it could be that, you're just lacking certain parts of experience, and it's fair to ask. Right. But you, you know, maybe you hadn't managed as big a team as this is. Okay.
Corey Ferengul:Maybe this has parts to the role you don't truly understand, and that's the killer. Right? How often someone sees a manager and they go, I know their job, but they they know 60%. But that other 40% is this over here. It may be your relationship with others on the executive team that they don't respect or they don't wanna see you there, and you should work to figure that those things out.
Mike Shannon:Which means your stakeholder management That's right. And growing through a company is far beyond just your individual umbrella. Right?
Corey Ferengul:That absolutely right. Because when you become part of the management team, that is your peer group. Yeah. Right. And so that peer group is going to more times than not need to bless that you've been moved in or at least not create pain for the CEO if you are moved in.
Corey Ferengul:Right? So, you know, 1st and foremost, number one reason a person might be passed up is they're lacking something in their skill set that we think is needed at this moment.
Mike Shannon:Yeah.
Corey Ferengul:Okay. And you should work to figure out what that is. Yeah. And it's okay to raise your hand and say, I'm aiming for that in my career. What could I do in the future so that I would be considered?
Mike Shannon:Yeah.
Corey Ferengul:That totally acceptable.
Mike Shannon:So your first CEO role which we've got a whole another episode on first becoming a CEO Yeah. But, you know, came through, if I recall correctly, a multitude of promotions at a larger company.
Corey Ferengul:It was, I was brought in as the COO.
Mike Shannon:Oh, okay. So you actually brought in more senior than I thought.
Corey Ferengul:Yeah. So I was brought in as the COO and, the founder CEO decided it was time for him to step aside
Mike Shannon:Okay.
Corey Ferengul:And came into my office one day and said we we think you're the candidate.
Mike Shannon:Okay. Now when you were first brought in, was that already part of the thinking?
Corey Ferengul:It was not a promise. It was it was suggested that in the future it could be considered.
Mike Shannon:Yeah. Okay.
Corey Ferengul:But when I got in, I realized the head of sales was told the same thing and somebody else's so it was like, you know, nothing wasn't a problem. But Alright.
Mike Shannon:Alright. So actually maybe my question is more relevant to a previous
Corey Ferengul:Yep.
Mike Shannon:Company. But I was curious when you mentioned like these areas that a rising executive
Corey Ferengul:Yep.
Mike Shannon:Has to work on to be at whatever that next senior level of management is. How did you get that guidance Yeah. When you were, like, getting to maybe not your first CEO, but the first, like, c suite Yeah.
Corey Ferengul:Yeah. Yeah. And first and foremost is understanding what outside of my day to day would be expected of a leader. So a lot of people think I'm really proficient at my day to day. I am really good at I'm a customer success leader, and I know how to talk to customers, and I know our product inside out, and so on.
Corey Ferengul:Yeah. You go, okay. But how good are you at defining the plans that others do? How good are you at monitoring that? How good are you at delivering feedback?
Corey Ferengul:How good are you at packaging up information to deliver to the board? How good, you know, and and do they see those skills? You don't have to do it every day, but do they see that you could have those skills. Right? So how did I learn it?
Corey Ferengul:I have a boss that I asked.
Mike Shannon:Okay.
Corey Ferengul:And I went to him this is, you know, earlier in my career, and I was like, how do I what what do I need to do there? Yeah. And was lucky enough to have a gentleman who I still speak with to this day and, even though it was 30 years ago, we worked together. And he would say, oh, you know, over dinner, this is what happens there. Yeah.
Corey Ferengul:This happens here. And they don't look for that. They look for this. This is what really works. Find a mentor.
Corey Ferengul:Yeah. Find a mentor. Someone who could help you understand what are the things expected of the next role. Yeah. And then you look for opportunities to partake.
Mike Shannon:Yeah. Well and on that point, the mentor didn't necessarily I don't know the dynamic, but come to you. You went and asked questions. You brought it to the table. Yeah.
Mike Shannon:Even by asking the question, you actually differentiate yourself to agree as, hey, this is somebody who wants to, you know, move to that level and they're asking the right questions.
Corey Ferengul:And and absolutely. And the other thing that really worked in my favor, I was always willing to try something.
Mike Shannon:Yeah.
Corey Ferengul:And what I mean by that, it would, you know, some people are very steady and then I take this role and I go here. There was multiple times very early. I was at a really fast growing company, in the nineties, and it was like, oh, we need to do that now. Alright. I'll try that.
Corey Ferengul:Yeah. And then one time, I even said, I think this is a job that needs to be done. That's good. Why don't we put you in that job? Right?
Corey Ferengul:Yeah. So just having the flexibility to try new things and move around gets the attention of others in the organization.
Mike Shannon:Yeah. Okay.
Corey Ferengul:And then how do you not just deliver results, but communicate results Yeah. For what you have done.
Mike Shannon:Yeah. Now everything you just described there of that sort of, like, go getter, widen your own, purview and umbrella is what working at a early start up is all about. Yeah. You're describing a larger company too. So from my vantage point of this question of when do you make an external hire versus an internal promotion?
Mike Shannon:For a while, like, with my first company, it was all internal promotion of, like, you you know, whatever the next role was because just the business expanded. Now we have a need and, you know, hey, Eric, you're up. And and so you're doing that, and it develops, I think, on the one hand, this culture of, you know, growth and internal development.
Corey Ferengul:Yep.
Mike Shannon:But then it also creates kind of this vacuum of we may be doing things a certain way just because the founders thought that was the best way we could figure out.
Corey Ferengul:Yeah.
Mike Shannon:So at a certain point, I remember us, you know, kinda as the founding team, we were sort of our full exec team at the time, Having to ask, like, alright, do we just need an outside perspective too? So at some point, you're trying to balance, you know, what's in the melting pot of experience and perspective because if it's all internal promotion from a startup standpoint on, it's like, are we growing beyond what we did at, you know, ground 0?
Corey Ferengul:Right.
Mike Shannon:And so that's part of what goes into the thinking too.
Corey Ferengul:Yeah. I mean, if if you need to inject something into the organization, you know if you have it there or not.
Mike Shannon:Yeah.
Corey Ferengul:Right? I mean, you you know, like, oh, we need somebody who's much better at a, b, and c. And sometimes, you can promote an internal person and bring somebody alongside them to help them.
Mike Shannon:Sure.
Corey Ferengul:But sometimes you need it from the outside. Sometimes you need to rethink your sales process.
Mike Shannon:Yeah. It's not
Corey Ferengul:gonna happen if you just promote the internal people. Yeah. It's just not. Yeah. You know, now the the other side of it is, as an executive, how do you figure out who are the people in the organization that might be able to be promoted?
Mike Shannon:Yeah. Yeah. So how did you approach, like, leadership development bullpens and and, you know programs like that? Because that was something I always found was in that high importance, low urgency quadrant.
Corey Ferengul:Yep.
Mike Shannon:And, it was something I was passionate about but I don't know that I always nailed it because at the end of the day you need, you know, so and so selling versus practicing management. And so, like, to prioritize the time and that bandwidth, just curious how to approach it.
Corey Ferengul:I and it was focusing well, first off, I worked with my head of people to make it a responsibility of the one of their goals every year to manage high potential program in the company. Okay. And their job is to work with each executive, identify who were the key high potential people. Yeah. And we would always discuss in the exec team meeting at least a couple times a year and say, who are the people we see?
Mike Shannon:So you gotta have a
Corey Ferengul:And everybody kinda gets a view of who are those people in the organization that we think are good. And then from there is where it gets a little stickier depending the org, depending on your budgets. Yeah. You know? But if you have high potential people, you wanna try and give them opportunities.
Corey Ferengul:We got a special project. Can I pull them in? We're doing, you know, some activity over here. Can they be part of it? Should I have a meeting where we talk strategy and I invite a couple of them to And I would do stuff like that.
Corey Ferengul:Right? How do you how do you broaden their range? And more importantly, I would always make sure I had one on ones with those people. I would make sure I got to know them a little bit better. Yeah.
Corey Ferengul:Good idea. And and just kinda pull them in.
Mike Shannon:Yeah. It's kind of your ex it's not your extended team as a CEO, but, you know, you can't spend the same amount of time across your whole
Corey Ferengul:That's right.
Mike Shannon:Multi hundred person org. But you've got your direct reports and then you've got the, you know, the skip levels. But then you're kinda rising stars. You're figuring out some cadence of your lunches with that Yeah. Coffees, whatever.
Corey Ferengul:So I I was also, overboard maybe on the if someone got hit by a car planning.
Mike Shannon:Yeah. Okay.
Corey Ferengul:And I was always very big on, and I'm always big on and this goes back when I had an organization of over a 1000 people, I would always be like, oh, my, you know, top 5 leaders in that group. That one got hit by a car. Who? I don't know. Well, that's a problem.
Corey Ferengul:Yeah.
Mike Shannon:Right. I'm
Corey Ferengul:gonna figure that out. Right? And, you know, and and it would just it would be a constant running dialogue for me. Yeah. If someone what would I do?
Corey Ferengul:And sometimes it was, I was gonna change the org up and move those 2 teams together, whatever that is, but that brings up who in the org could I put in place.
Mike Shannon:Yeah.
Corey Ferengul:Or I don't have anybody. We'd have to hire from the outside. What would we do in the interim? Who could be an interim leader? Right?
Corey Ferengul:And it would it would expose that to myself a lot.
Mike Shannon:Well, here's what's going through my mind as you describe that is if I'm the internal rising executive and, you know, that spot in the c suite opens up and they go with an external hire
Corey Ferengul:Yeah.
Mike Shannon:I'm sure there's some question going through that person's mind of, well, should I stick around here or go somewhere else? And, you know, you're you kind of expect that too as CEO of I don't promote that person right now Yeah. That I leave. But what you just described is the CEO is thinking about this, you know, kind of backup plan always. Always.
Mike Shannon:And so it's not necessarily a you have to now jump because somebody's blocking your spot. The org could actually shift design Yeah. You know, in the near future.
Corey Ferengul:But, look, I I had that where I was an executive passed over for the next step up. Okay.
Mike Shannon:I
Corey Ferengul:had a CEO who retired. I was one of 3 executives interviewed. They actually tried to hire somebody outside and told all of us they were doing that, and that person turned the job down. Okay. So they decided to go with another internal candidate Okay.
Corey Ferengul:Bypassing 2 of us. Yeah. So now I was like, oh, so I'm not even second on the list. Right? I mean, because it went outside, it went inside.
Corey Ferengul:And and look, it can be hard. Yeah. That was a scenario where I knew I was now limited. Yeah. I wasn't gonna go anywhere.
Corey Ferengul:I left the organization. Yeah. If you're earlier in your career, you look and say, you know, I went and talked to people and I said what, you know, what was the issue? And, you know, at the time they told me, well, you're too young and we're public and we need this and we need that. And I was like, you know, I don't agree with any of it.
Corey Ferengul:So I'm gonna move on. Yeah. Yeah. But they didn't do what they needed to do if they really wanted to keep me. What they did is said, we're gonna give you all these extra options and we're gonna pay you to stay here and, you know, don't worry about it.
Corey Ferengul:And I was like, oh, okay. So my career has stopped here. Yeah. And you're just gonna pay me off to stay. Yeah.
Corey Ferengul:Okay. Got it. If I were a different executive, you know, somebody comes to me and says, well, what do I do? Here's the kind of things I would look for. Yeah.
Corey Ferengul:Right. Here's the things that that I think you need to develop. Growing the individual. That's right.
Mike Shannon:What it's interesting that you say that even at the highest, like that was for the CEO role. Yeah. You know, I'm I'm thinking if there's a senior leadership role or a c suite role, that's where there actually may be multiple opportunities. I mean, maybe not, but the reorg can't be what you're talking about.
Corey Ferengul:Often happens. We had a situation at a company I led that, you know, we had a executive step out, promoted someone else up, and another person felt a bit passed over and prop appropriately came and said, look. I think I might be limited here. Yeah. And we said, well, here's the things that we haven't seen from you.
Mike Shannon:Yeah.
Corey Ferengul:Stick it out. You're you're probably and eventually that person did get more responsibility, promotion. And, you know, I believe felt better about it. I won't say I had had many, conversations with the person about it, but I believe felt better about it. Yeah.
Corey Ferengul:But I think what we did right as a leadership team is we knew this person, leave you out there. We went to the person, and then we, you know, laid out for him what we thought had to happen, and then we acted on it. We let it happen.
Mike Shannon:Yeah. One one thing I would always try to make a point of doing is have the individual who may have been the internal promotion be part of the interview process for the external campaign.
Corey Ferengul:Work for you?
Mike Shannon:Well, it it it has. I think it's been, you know, instrumental in that there were some examples I can think of where that individual said, you know what, I can learn more from them coming in
Corey Ferengul:That's good.
Mike Shannon:Than if I take it. And and if that occurs, now all of a sudden like that individual is going to be the champion of that person coming in.
Corey Ferengul:Yep.
Mike Shannon:Now is gonna be my next question for you is you've actually been the outside hire. I think that COO role you mentioned Yeah. Yeah. You've been the outside hire where somebody internally could have been that COO. How did you then approach being the external guy and, you know, orienting the culture around you being in the role and and now becoming one of them?
Corey Ferengul:You don't dictate the terms, you make adjustments over time.
Mike Shannon:Yeah. Okay.
Corey Ferengul:Like I didn't walk in the
Mike Shannon:This is what we do now.
Corey Ferengul:This is how it works. I've seen that executive. I You shared.
Mike Shannon:Alright. Yeah.
Corey Ferengul:But I I've heard that term used. Right? I've seen that type of executive walk in for work.
Mike Shannon:Still saying that?
Corey Ferengul:Yeah. Alright. Yeah. Yeah. Yeah.
Corey Ferengul:But, they'll walk in and go, you know, I'm in charge now. This is how we're gonna do it. Like, no. Walk in and, like, tell me about your team.
Mike Shannon:Yeah. Do your listener tour or whatever.
Corey Ferengul:Yeah. Yeah. And and and and I and people will use the term listening tour, and I sometimes feel it's just it's not just about listening. It's about creating your to do list. Yeah.
Corey Ferengul:Okay. And it's how do I get well well, because I've heard I've seen people go, oh, I did the listening. Like, what did you do with what you learned?
Mike Shannon:Right. Yeah.
Corey Ferengul:Right? That's the key. It it's only useful if you're gonna do something with what you've learned. But, yes, that's what you have to do. Yeah.
Corey Ferengul:But you have to, you you have to go in. You have to know what kind of engagement you and you have. And we've talked about, you know, leadership meetings and what cadence do you want, how you're gonna get status reports.
Mike Shannon:Yeah.
Corey Ferengul:You wanna set those kind of models in place, but you also wanna make sure that you're taking in account what they've done before, how they've operated before. And let's be honest, your new executive coming in because there's something deficient there.
Mike Shannon:Yeah.
Corey Ferengul:So everything they did before wasn't perfect. Yeah.
Mike Shannon:Right. Right.
Corey Ferengul:But you can't walk in and say everything you did before wasn't perfect. Yeah. Right. Right. Right.
Corey Ferengul:You know? What's always shocking is every time I've walked in from the outside, everybody looks up and says, good. We needed somebody. Here's everything that we
Mike Shannon:need.
Corey Ferengul:Right. Right. Right. Every time.
Mike Shannon:Yeah. So That makes sense.
Corey Ferengul:So there you go. So if you're looking to get promoted from the inside, there's a bunch of pointers in there on what you should be doing. And if you're an executive, you need to always be thinking about who are our internal candidates and what would it what are their strengths, weaknesses, and what would it mean to shift the organization around?
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