As it is just like any other business, a direct selling company, too needs new managerial staff. This can be at any stage during the life of the company and at various levels. The need might arise due to a resignation or the company might choose to terminate an existing manager. Or, an entirely new position might need to be created because of growing business.
In such situations, the instinctive move is to look into the existing managerial resources. It is believed that if there is a staff with the necessary skills, the whole process might be smoother. That person would not need to pass through an adaptation period. Moreover, an internal promotion would definitely help boost motivation as others could imagine themselves promoting one day, too. However, this option is not always there. On the contrary, it is very likely that the company does not have a potential candidate within the team.
When looking outside for this person, the question comes down to: “Whether we should hire somebody within the industry or should we search elsewhere?”
If you have your strategies put in place and are being implemented smoothly, then a person already working for direct selling company might be a good choice. As s/he already posseses the industry experience, you will not need to spend time on this. With the new person’s adaptation to the company, s/he can immediately start pursuing your strategies. On the other hand, if your company is a small or a medium size one, a new manager coming in from larger enterprise can bring in lot of knowledge, best-practices and experience along with.
If we look at the second part of the question above that is, in looking outside, we see there are opportunities there as well. Especially, if the company is in need of new paradigms or new ways of doing business, a manager to be hired from outside the industry might introduce the team with a lot of new perspectives and methods. If the person is the right one, with the skills s/he has, the adaptation to the whole thing should take long anyways. Such a choice opens the way for you to differentiate your company from all competitors.
Now, let’s take a look at few top level examples from the industry…
Avon’s previous CEO Andrea Jung was promoted to this position within the company. She was with Avon for five years at that time. Replacing Jung, Avon chose to bring in somebody from outside the industry this time: Sheri McCoy from Johnson & Johnson.
Oriflame promoted Sven Mattsson to CEO position who was with the company for many years assuming various managerial responsibilities. When the Board decided to terminate Sven Mattsson in 2005, its choice was Magnus Brannstrom, again as an internal promotion.
There is no evidence that shows us if any of these preferences has categorically the potential of producing better results. At least, I have not witnessed this in my 22 years in the industry. I have seen both successful and not-so successful examples.
However, many companies continue making this mistake. I am talking about the categorical approach that can be summarized as: “We are different, we should always promote within the company.” or “It is not possible to work with a person from outside the direct selling industry.”
Any prejudiced approach is destined to fail.
What is your opinion on this?