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6 Factors to Consider Before Promoting From Within

Friday, September 8th, 2017

Managing the development and performance of any organization has its difficulties. On the one hand, you may be consumed with tuning up people who no longer display an eagerness to excel in the role they occupy. On the other hand, you may be faced with turnover that continually leaves you at a talent deficit.

The old saying about having the right people in the right seats on the bus is more than just a quote from business guru, Jim Collins who authored the best seller- Good to Great. It’s a philosophy that puts heavy emphasis on identifying, selecting and developing people in every box on your organization chart to insure you’ve built your best possible business team.

The concept of hiring the right people can include many strategies. If you need to upgrade the performance of your organization and that means bringing talent in from the outside, this is a well-worn option. If you want to demonstrate that working for your company means getting opportunities to advance, promoting from within is a good way to go. If your business is running well and a foundational position becomes vacant, you have the choice of looking outside or looking for the best person inside. Whichever way you go, make sure you are choosing for the betterment of your business’ operating performance, not for expediency. Quick, impulsive hiring choices never end well under any circumstances!

Don’t Overlook Some Challenges Before Promoting from Within

One of the challenges of promoting from within is having to fill the spot of the person you promoted. The other is making sure the individual you are looking at has the skills and abilities for the position which is open. Business owners and executives frequently miscalculate this latter point as they decide to make their number one sales person the new sales manager. Or, as I was involved in recently, an IT company that promoted their best technician to the position of office operations manager.

Before you begin to think about promoting someone from a technical or hands on role to someone who (in a management role) will be challenged by completely different circumstances, it’s helpful to think about the areas that will impact your decision. After all, when a miss hire occurs at any level, the consequences on morale, performance and efforts to correct the problem are usually costly and overwhelming.

6 Characteristics to Consider Before Promoting from Within

Here are 6 areas to look at to insure the individual you are considering will be successful in the new role.

1. Does this person display Initiative?

Have they displayed any real or consistent initiative with their current responsibility? Are they prone to getting ahead of problems or asking for help before things turn ugly? Have they demonstrated any ability to handle bigger roles or volunteered to head up more complex projects? Have they spoken with you or their direct supervisor about what it takes to advance in your organization? Each of these scenarios provides clues about that individual’s desire to take on more and contribute at a higher level. Without this level of initiative, your insider may have difficulty acclimating to the demands of the new role.

2. Are they Resourceful?

Critical for management success is the ability to be resourceful. Having a keen sense of how to accomplish goals and get results without having ample support makes you a star in most organizations today. Has this individual demonstrated a capacity for finding ways to get things done when manpower is short, budgets are lean and the deadline was yesterday! Look for things like originality, unconventional approaches or simply thinking outside the company box. People who are resourceful don’t usually serve up lame excuses about why projects or initiatives didn’t get done.

3. Do they operate with Emotional Balance?

This is a big characteristic to consider. When you are working by yourself or on things that you are responsible for, emotional outbursts tend to be inwardly directed. At the very least, your displeasure with your own performance may be kept to a few people you work with or know well. When you are called upon to mediate a dispute between two of your employees or deal with one who decides to challenge your authority, how you respond is more important than what you say. People with itchy trigger fingers don’t’ tend to produce great results as team leaders or department managers.

4. Do they show Empathy?

This attribute is generally misunderstood. It’s not being soft or letting people get away with bad behavior, it’s having a keen understanding of what makes people tick. It’s recognizing that the way to get people motivated and focused on great performance is by understanding them as humans first. Someone who is empathetic will better relate to employees who have difficulty meeting expectations because they will be able to reach these folks in ways that inspire commitment and effort. If your candidate is too black and white or matter of fact with their people interaction, this could be a sign that their rapport building efforts with their new team could fall short.

5. Have they demonstrated any Organizational Discipline?

As an individual employee, you are mostly responsible for what you do. As a supervisor, manager or team leader, you are now accountable for the group’s performance. Having good time management, organization, planning and follow up capabilities is what this person will rely on until they get the hand of the new role they are in. Like a world class chess player, they must be 4-6 moves ahead of the group so they can impact direction and future outcome.

6. Do they possess Business Acumen?

Depending on the level of the promotion or the complexity of the department being managed, business acumen may or may not be a deal breaker. Ideally, your in-house candidate should possess some overall understanding of how the company operates. Why? Because many employees who lose focus and get sideways do so because they don’t understand the importance of their job as it relates to the success of the company. Someone with good business acumen will be able to educate the team on the linkage between what they do and the results of other departments.

The Best Way to Handle These Questions Before Promoting from Within

Now that you have some insight about the skill make up of your potential inside candidate, what must you be aware of to insure these areas are handled objectively?

For starters, think about any biases or preconceived notions you have about the individual you are considering. These biases can be negatively based or they can be from a sense of over confidence in the individual. This inability to see what’s real is called blind spots. Everyone has them but not everyone realizes it. Blind spots about candidates are a huge reason why many business owners make poor hiring decisions.

Secondarily, make sure you take the time to observe the individual directly in addition to getting opinions from others. Every time you ask another person to assess and recommend someone for a new role, you are getting that person’s capability for evaluating talent, whether or not they are good at it.

Finally, if the position being considered is recent or has not turned over in some time, look on the outside anyway. In my prior executive level positions with various consumer products manufacturers, I frequently was surprised at the level and availability of the current ‘market talent’. Even if your inside candidate more than meets your expectations, having a sense of what’s on the outside may cause you to reevaluate your own performance expectations. Better to do this before the individual moves into the new role than after.

Final Thought

I always prefer to promote from within as long as I am fully informed of the person’s desires, skills and ability to learn new responsibilities. Knowing this can only come from your own learning about your candidate’s true characteristics.

8 Strong Reasons to Buy Your Own Health Insurance Cover Right Now

Friday, September 8th, 2017

Wealth Protection is an area often neglected in lieu of Wealth Creation. Without an iota of doubt, Wealth Creation by doing smart investments is definitely important. But what use is it if there is an imminent risk of losing all that you created over your life time – in a span of, say, a few months?

Health Insurance is one such aspect of Wealth Protection – where most of us feel that either we are already protected enough by our company group insurance policy, or God will always be too kind on us and nothing is going to happen to us while we are in our prime age. Can we be further away from truth? And all of us see and hear enough examples around us everyday, which contradict this basic assumption of ours. Just closing our eyes is not going to make the risk vanish. A smart wealth creator, like a smart project manager, manages the risk of health by ‘adequately’ covering this risk associated with it. Cover your risk before it is too late.

It was a sever heart attack. He was fortunate to have survived. He is 31, my ex-colleague, working in an MNC in Gurgaon, and highly successful – or seemingly so. He has a beautiful daughter and a very caring wife. All his 3 arteries were more than 70% blocked. Bypass was the only option. When he came home, his corpus was down by 25% – this in spite of having a group insurance policy from his employer. Other than the emotional setback as well as lifelong constraints on his lifestyle habits, it is going to take him another 4 years of hard work – just to claw back his portfolio to where it was prior to this incident. You may say he was unlucky. No. He was not a smart portfolio manager. A smart manager will always cover the risks to his or her portfolio.

And if after reading this, you have been thinking that it may have happened with him because of his workplace stress, and that you don’t take that much stress at your workplace, let me tell you that the food you eat, the air you breathe, and the water you drink have become toxic enough to cause such, and many more dangerous diseases even if you are leading an absolutely stress free life. It is unfortunate, but true that we are living and consuming such toxicity. Who will be the next one – is just a matter of chance.

Hope for the best, but prepare for the worst – that is how we used to plan our projects. that is how exactly you ought to deal with your life. I sincerely hope you lead a healthy and prosperous life, but I earnestly urge you to be prepared in case of any such eventuality -for it is a definitely reality in our so called developed world.

Here are 8 strong reasons you must buy your own health insurance policy at the earliest, irrespective of your age or your existing cover:

1) Avoid stringent tests

If you think, you will save some money and take a health insurance cover only when you cross the age of 50, then please be aware that after 50, almost all health insurance companies subject buyers to a slew of medical tests before selling them a health plan. And once you undergo a battery of tests at that age, it is quite likely that you will be discovered with some minor, if not severe, anomaly. Each such anomaly is going to load your premium, apart from the physical pain of undergoing all the tests. You can avoid all these tests if you buy your health insurance policy earlier. Any pre-existing diseases are automatically covered in such a case. Any diseases diagnosed later will be covered – without any additional premiums.

2) Pay lower premium

Health insurance premiums are quite low when the age is less. The lower the age group, the lower the premium. And premiums go up only if you move across age groups. At 25, a plan with Rs 5 lakh coverage would cost you around Rs 8000, at 35 you’ll have to shell out around Rs 11000 and at 45 the cost rises to Rs 18000. So buy it as early as possible to book the policy at the lowest possible premium.

3) Accumulate no-claim benefits

Even if you remain healthy – which we should all hope for – with every such no-claim year, the extent of your medical cover increases. Buying early means you are likely to have more no-claim years, allowing you to accumulate the benefits over time.

4) Get access to cheaper and hassle free online buying

At a young age, you can buy a decent enough health insurance policy online. The online policies are cheaper. Many insurers are not willing to sell online if the buyer is above 50. You will not be able to avail of the ease of online purchase if you wait too long.

5) Your employer cover is just not sufficient

With exponential increase in healthcare costs, the need for health insurance cannot be overstated. Check the cost of a week’s hospitalized for a regular illness and then compare it with your company’s coverage. Most likely you’ll be persuaded to buy a cover immediately. Still not sure? Think about when you grow older and might need more frequent medical attention. What about if you are asked to leave the company – a harsh reality today? What about the period in between two jobs? You ought to cover all these risks to protect your portfolio.

6) Avail Sec 80D Tax benefits over and above Sec 80C benefits

Buying your health insurance early also means better financial planning. You save tax for paying the premium. Under section 80D, you can potentially save taxes upto Rs.40,000 annually. If you take these tax benefits into account, the cost of a health insurance policy is not prohibitive considering the protection you enjoy.

7) Overcome the Waiting Period

When I quit IBM and took financial freedom, I bought a private health insurance policy – just to realise that I have to undergo a waiting period of 2 years for specific treatments. And, as fate would have it, my wife had to be operated for one such disease during this 2 year period. Who paid? I did. Do not do the same mistake that I did. Do not wait to buy a health insurance policy till it becomes a definite necessity.

When you buy a health plan, you have to serve several waiting periods-for certain surgeries, special treatments, pre-existing illness coverage, etc. If you buy it now, when do not need it immediately, it would mean you would have served the requisite waiting periods and be able to claim all full benefits later.

8) Cover your ‘to be born’

Today’s health insurance policies covers much more than just hospitalization. New health plans cover you for day care procedures and OPD, not just serious hospitalization. Even vector borne diseases are covered. Most plans also have maternity benefits, which may be relevant at this stage of life. Also, your new born will be covered from birth without any additional premiums.

As with wealth creation, taking action early works with wealth protection too.