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Can You Manage?

Should the office hotshot be your next manager? Only if he or she really has the right stuff.

This story appears in the July 2003 issue of Entrepreneur. Subscribe »

Erika Mangrum was a year into her business and was feeling pressured to promote a star employee to general manager. "She wanted more responsibility and more pay," says Mangrum, co-founder and president of Iatria Day Spa and Health Center, a 40-employee company in Raleigh, North Carolina. Mangrum felt a deep sense of loyalty to this employee, who had been with the company from the start, so she went ahead with the promotion. However, it wasn't long before Mangrum realized she was promoting doom and gloom.

The new manager's rudeness under stress and her inability to manage conflict created big problems as the company grew. Mangrum, 36, started getting complaints from customers and sensed growing tension in employees. "You could just feel it," Mangrum says. She offered training, but it was too late. The manager left 14 months after being promoted. And that wasn't the end of it. Mangrum, who co-founded the company with her husband, Dave, 47, also lost key employees in the turmoil. "We didn't know what a major impact [a promotion] could have," she says. "It's one of the biggest mistakes we've made."

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