Matt Ryder explains why promoting your best individual contributors into management often backfires. A star salesperson might become a mediocre manager, then a worse executive, as the company grows and demands change. In high-growth companies, revenue can jump from $100K to $300K monthly each quarter, but early employees may lack the skills for larger, more complex roles.
If you're a really good closer and you get promoted to sales manager and you're like a decent sales manager, they go, oh fuck, he's been great. He's been here for a while. Let's make him head of sales, right? And now he becomes a decent head of sales. He's gone from great to good to decent. And they go, you know what? He's been here for ages. Let's make him the chief revenue officer. You've promoted that person to a state of incompetence. If you look at like a high growth business, then your business is essentially totally new territory every quarter. You're going from $100K a month, $200K a month, $400K. Now, if everyone joined at $20K a month and that was big for them then, and now you're at $300K, those people are not the people for the job. It's not that they It can't be one day. But like, if we're looking at what's in the best interest of the business, they're just not.
