Hiring additional staff becomes more complicated the higher up the ladder you go. Do you reward loyalty and hard work by promoting from within, or will your firm profit from bringing in someone with a fresh perspective and new skill set? The risks and rewards of both approaches can help firms determine the right path forward.

Jean Stoffer had a problem. The Grand Rapids, Michigan–based designer spent the early decades of her career running a steady but modest boutique kitchen-design firm in the Chicago suburbs. Then, after she moved north in the 2010s, Stoffer’s work started gaining national attention and her business caught fire. Soon she had a show on the Magnolia Network, a cabinetry business, licensed products, a retail store, even a café. Along the way, her children came into the business. So, eventually, did longtime family friend Laurie Hamen, who left a high-level career in academia to join the firm as CEO. Stoffer credits Hamen with professionalizing the operation and creating a structure that allowed it to become a focused business: “She took the company from a bunch of worker bees to something that had a foundation underneath it.”