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When to Promote from Within—And When to Search Outside

  • tcinello
  • May 19
  • 4 min read

By Tony Cinello, Founder – Anthony Andrew


Executive Summary


It’s one of the most important decisions a CEO or CHRO will face —how to fill a critical leadership role: do you promote from within, or do you conduct an external search?

It sounds simple. But too often, these decisions are made based on loyalty, pressure, or speed—not on strategic clarity.

Mid-market companies—especially those between $25M and $1.5B in revenue—can’t afford missteps in leadership. The wrong call on a promotion versus a search doesn’t just stall progress; it damages culture, undercuts confidence, and compounds risk.

This article breaks down a smarter way to make the decision. Not based on politics or hope—but on performance readiness, capability gaps, and business alignment. I’ll also share a decision-making framework that I walk my clients through, and explain when internal growth is the right move—and when a fresh outside perspective becomes the catalyst for scale.


Instinct Isn’t a Strategy


I’ve lost count of how many leadership teams have said to me:

“We think Sarah’s ready, she’s been here a long time…”“We probably need to go external, we just had a bad internal promotion…”“We’ll decide after a few interviews and gut feel…”

These aren’t bad leaders making bad decisions. These are smart leaders making fast decisions without a structured lens. But in today’s landscape, instinct isn’t enough.


Especially when:


  • Your VP of Sales just exited mid-growth plan

  • You’re about to launch into new markets

  • A PE board is watching every talent move

  • Your internal bench is strong—but untested


Promoting from within may boost morale and reward loyalty—but without readiness, you’re setting someone up to fail. And bringing in an external hire might seem like the safe bet—but without cultural awareness, it can fracture the team they’re supposed to lead.


The Cost of Getting It Wrong


Here’s what the research shows:


  • Executives hired externally fail 40–60% of the time within 18 months (Harvard Business Review, 2022)

  • Internally promoted leaders fail 20–30% of the time, often due to poor preparation and unclear expectations (Gartner, 2023)

  • The total cost of a failed executive hire can range from $750K to $1.5M+, including lost productivity, rehiring, and downstream team disruption (SHRM, 2024)


This isn’t about career pathing—it’s about business stability, speed, and trajectory.


What Strategic Decision-Making Looks Like


So how do we help clients decide?


Here’s the conversation I walk CEOs and CHROs through:


1. Define the Role Through a Strategic Lens


Ask:

  • What problem is this role solving over the next 12–24 months?

  • Is the role growing in scope due to M&A, digital transformation, or customer expansion?

  • Will the new leader need to build something new—or stabilize and scale what already exists?


If the role is entering uncharted territory, an external search often provides the objectivity and pattern-matching experience you need. If the business needs continuity and someone who understands the org, that’s where an internal promotion makes sense.


2. Assess the Readiness of Internal Talent


Internal promotion isn’t a free pass. You need to rigorously assess:

  • Have they led at this scale before (team size, budget, customer impact)?

  • Can they influence peers, not just manage direct reports?

  • Do they already demonstrate the mindset and behaviors expected of a VP or C-level executive?


The best internal promotions are backed by a track record of performance, stretch assignments, and observed leadership—not “potential” alone.


3. Evaluate Organizational Momentum and Risk


Are you in a growth phase where fast execution is required? Is the culture stable and high-performing—or does it need change leadership?

Here’s a simple way to frame it:

Scenario

Best Move

High trust, stable team, business continuity

Promote from within

Rapid growth, structural change, new markets

Search externally

Internal candidate ready, but never tested at scale

Promote with support (coaching, onboarding)

Internal bench unclear or overly political

Benchmark externally

Cultural issues or stalled momentum

Bring in outside energy

No two companies are the same—but the above table often clarifies the best course of action quickly.


Red Flags I Watch for


Internal Promotion Risks:


  • “We owe them a shot”

  • “They’ve been loyal”

  • No onboarding or coaching plan

  • The role is changing faster than the individual


External Search Risks:


  • No stakeholder alignment on what “great” looks like

  • Hoping for a unicorn to fix deep org issues

  • Over-prioritizing prestige over performance

  • Underestimating ramp time or culture absorption


What We Do Differently at Anthony Andrew


As a retained executive search partner, I don’t just surface external candidates. I help leadership teams make the right decision—including the one that might not involve a search at all.


That means:


  • Benchmarking internal talent against market data

  • Pressure-testing leadership capabilities before promotion

  • Advising when to supplement internal promotions with coaching, not replacement

  • Running a search only when it aligns with your strategy—not your stress


In short: we’re not trying to fill a seat. We’re helping you architect your future leadership.


Final Thought


Promoting from within can be one of the most powerful things you do to reinforce culture, reward loyalty, and increase retention. But only when readiness meets business need.


Hiring externally can inject new energy, capability, and change—but only when your organization is aligned and ready to absorb that change.


If you're facing that decision now—or wondering if you're making the right call for your next leadership move—I'm happy to help.


Because in executive hiring, it’s not just about who you choose.It’s about why, when, and how you choose them.

—

Tony Cinello Founder | Anthony Andrew


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