In January, Jeff Bezos, Warren Buffett, and Jamie Dimon (the CEOs of Amazon, Berkshire Hathaway, and JPMorgan, respectively) announced they would disrupt the health care system with a new venture. It will start with coverage for their companies' employees, which number around 1 million, and some believe that the yet-to-be-named startup will either expand to cover more people, or perhaps become a model for other corporate health care plans.

Yesterday, the trio named the trailblazer who will lead this initiative: Dr. Atul Gawande.  Gawande is a Boston surgeon and a professor of surgery at Harvard. He is also a prolific writer: he writes for The New Yorker and has published four books about medicine. More than a million people have viewed his TED talk on how to fix modern medicine. But he has never run a billion-dollar venture.

So is this a good move for Bezos, Buffett, and Dimon? I certainly think so.

Gawande is a corporate outsider. His lack of experience running a billion-dollar enterprise (although he has run both an innovation lab and a nonprofit) could be a good thing. Outsiders often bring fresh approaches and fresh perspectives, because they aren't weighed down by "what's always been done." In other words, Gawande is unlikely to be burdened by entrenched institutional bias.

The question of whether to promote from within or hire from outside is a common issue for most startups--not just the ones with unfathomable amounts of investor backing. You're particularly likely to encounter it when your startup moves to scale.

So how do you decide? I deal with this issue a lot, and can share my two cents here.

Hire from within when things are going well. It's quicker and costs less. It reinforces company culture and morale. And it's much less risky, since the candidate already has a track record succeeding in the venture (otherwise, why promote them?). The biggest drawback to hiring from within is that it usually generates more of the same and often leads to "in the box" thinking.

Hire from outside when things aren't going well, or when doing "the same old thing" simply isn't working (it's clearly not working with health care). Often, hiring an outsider allows you to bring in a wider range of skills and experiences, which can directly address any holes in your current team. The main issue when hiring from outside is twofold. First, while the person you hire might have success, they might not have success in your line of business or industry niche. Second, they might not be a fit for your company's culture. 

Here are the five steps I share with startups looking to scale their venture and upgrade top-level management:

  1. Consider your company's current results and future dreams. Determine if you need change or if you need more of the same (just bigger). Question what needs to be done: a shakeup or a scale-up. Consider the ramifications of each.
  2. Analyze current team dynamics. What will be the impact of bringing in an outsider? Will an internal promotion lead to resentment from those who weren't promoted? Will it disrupt business as usual, and is that your goal?
  3. Think about cost and timelines. Outsiders take more time and money to hire and onboard.
  4. Review current staff. Can anyone fill the role? Is there a top employee who is ready to grow?
  5. Review competitors' leadership. Can you steal the top mind from a competitor or from a customer?

Only time will tell if Bezos, Buffett, and Dimon made the correct choice by appointing Gawande. But given these investors' history, track record, and ability to drive disruption, I have a hunch they'll be proven right.