Latest / Hiring & Firing with Fexingo: Recruitment, Performance, and Workforce Decisions / The Hidden Cost of Bad Internal Transfers
Transcript
- Lucas: Let's talk about the internal transfer that feels like a promotion but acts like a punishment. You know the type. You have a star salesperson who consistently beats quota by twenty percent. The natural instinct is to move them up, or sideways into a team lead role, to replicate that success across the department. Luna: Right, because you assume the skills are portable. If they can sell, they can teach others to sell. Lucas: Exactly. But here is the data point that keeps me up at night: when we track the first six months of these lateral moves, nearly half of them end in either a performance drop or a resignation within eighteen months. And the cost isn't just the salary; it is the total erosion of institutional knowledge in the original role. Luna: So you are saying we are burning our best players to keep the lights on elsewhere? Lucas: Precisely. It is what I call the 'competence trap'. We confuse individual contribution with leadership potential. A top performer has mastered their craft. That is a different neural pathway than managing the chaos of other people's crafts. When you pull someone out of their zone of genius, you do not gain a leader. You lose a player and create a mediocre manager. Luna: That sounds exhausting for the employee too. They get promoted into a job they didn't ask for and couldn't prepare for. Lucas: It is worse than exhausting. It creates a quiet resentment that spreads through the team. Because now you have a new manager who is trying to micromanage because they are insecure about their own lack of experience in that specific domain. The team loses trust, the new manager burns out, and the company pays for both failures. Luna: Is this happening more now with remote work? It feels harder to gauge if someone actually likes managing. Lucas: Remote work actually makes it worse because you lose the informal signals. In an office, you see who naturally steps up to mediate conflict or organize lunch orders. Those are proto-management behaviors. On Zoom, those things vanish. So managers default to the loudest voice or the highest revenue number, which is almost never the right indicator for leadership fit. Luna: So how do we stop doing this? We can't just leave our best people where they are forever. Lucas: You have to separate career progression from role advancement. There is a way to reward high performers without forcing them into management. It involves creating dual-track career ladders. One track is purely technical or individual contributor focused. The other is managerial. Most companies only have one ladder, so everyone has to climb into management to get a raise. Luna: I see. So if you want to keep your star engineer, you give them a senior title and more money, but no direct reports. Lucas: Exactly. And you structure it so that the senior individual contributor still carries weight in decision-making. They influence strategy without being bogged down in HR paperwork. This preserves their output while giving them the status and compensation they earned. It stops the brain drain because they don't feel forced to quit to advance. Luna: But doesn't that create a two-tier system? Like the managers are the real bosses and everyone else is second class? Lucas: That is a risk, but it is manageable if you define the scope clearly. The senior individual contributor owns the 'what' and the 'how' of their domain. The manager owns the 'who' and the 'when'. When those lanes are distinct, you actually get better outcomes because the experts aren't distracted by scheduling conflicts. Luna: This reminds me of the engineering world where principal engineers often have more respect than middle managers. Lucas: Spot on. In software, a principal engineer is often seen as the final authority on technical direction. A middle manager might be handling budget and headcount, but the architect decides if the code holds up. We need to bring that same reverence for specialized skill into marketing, finance, and operations. Luna: What about the people who actually do want to manage? How do we identify them before they break something? Lucas: You test them first. Before you give someone a permanent title, put them in a temporary project lead role. Give them a small team, a tight deadline, and a clear exit ramp. If they thrive, great. If they struggle, they learn valuable lessons without destroying their career trajectory or losing their original job. Luna: A trial run. That makes sense. Much cheaper than firing a bad manager after six months. Lucas: And it protects the company's reputation. Candidates hear stories. They know which teams burn out their leaders. If you build a reputation for developing leaders slowly and carefully, you attract better talent overall. Luna: It shifts the focus from filling seats to building capability. Lucas: Yes. But let's pause there for a second. If these conversations have moved your work forward in some small way, the way these stay ad-free is listener support. Buy me a coffee dot com slash fexingo. Luna: Yeah, it really helps keep the research sharp. Thanks for keeping this going. Lucas: Back to the testing idea. The biggest mistake companies make is assuming that past success predicts future management style. High pressure sales environments create aggressive personalities that do not translate well to supportive coaching roles. Luna: So you might have a great closer who becomes a terrible mentor because they value winning over teaching. Lucas: Exactly. Winning and mentoring are often opposing forces. Mentoring requires patience, vulnerability, and celebrating other people's wins. Sales rewards speed, confidence, and self-promotion. If you promote a sales shark into a coaching role, you will likely see the team morale tank within ninety days. Luna: That is a brutal timeline. Ninety days to realize you made a huge mistake. Lucas: And by then, the damage is done. Several good employees may have already left. The cost of replacing them is massive. Usually three times their annual salary when you factor in recruiting, onboarding, and lost productivity. Luna: Three times. That is a staggering number for a single bad hire. Lucas: It is. And it compounds. One bad manager affects five to ten reports. So you are looking at a potential fifty-thousand dollar hit for a decision you made in ten minutes based on a quarterly bonus check. Luna: We need to slow down the promotion process. Make it less impulsive. Lucas: Absolutely. Treat internal transfers like acquisitions. You do due diligence. You assess cultural fit, skill gaps, and long-term viability. You don't just buy the asset because it had a good quarter. Luna: Due diligence on people. That is a phrase I would like to see more companies use. Lucas: It changes the mindset entirely. Instead of 'who do we need to fill this slot?', it becomes 'who is actually ready for this next step, and are we setting them up to win?' It puts the burden on the organization to support the transition, rather than just dumping responsibility on the individual. Luna: Supporting the transition. Does that mean training for the new role before they take it? Lucas: Yes. Shadowing, workshops, dedicated mentorship. If you are promoting someone to management, you should spend three months preparing them for that specific set of challenges. Not just general leadership books, but actual scenarios relevant to their team. Luna: Practical preparation. That sounds like an investment that pays off quickly. Lucas: It does. And it signals to the rest of the staff that the company cares about development, not just extraction. Employees stay longer when they feel invested in. Luna: So the key takeaway is: don't punish excellence by forcing it into a mold it doesn't fit. Lucas: Right. Reward the excellence where it shines. Create paths for those who want to lead. And protect your core performers from being pulled into the management grinder unless they are truly ready. Luna: It seems like a simple shift in perspective, but it could save so much money and stress. Lucas: It is simple, but it requires discipline. Most managers promote because they are lazy. They want someone to handle the work so they can breathe. Recognizing that impulse and resisting it is the mark of a mature leader. Luna: Resisting the impulse to fix everything yourself by handing it to someone else. Lucas: Exactly. Build systems and people who can sustain the work, rather than burning out your heroes to keep the machine running. Luna: How do you spot those mature leaders in your own network? Lucas: Look for the ones who talk about their team's successes more than their own. Who admit when they don't know the answer. Who invest time in hiring people smarter than themselves instead of people who just obey them. Luna: Humility as a leadership metric. That is refreshing. Lucas: It is essential. Because ultimately, your workforce decisions define your culture. If you value quick fixes over sustainable growth, your culture will reflect that. If you value careful development, your talent pool will deepen. Luna: So the next time you see a star performer, ask yourself: do they want to lead, or do they just want to play? Lucas: Or perhaps, does the company need them to play, even if they want to lead? It is a complex question. But asking it is the first step toward getting it right. Luna: Next time, maybe we can talk about how to handle the reverse situation: when a manager wants to go back to being an individual contributor. Lucas: That is a tough one. Let's save that for another day.