Leadership succession in companies does not look the way it did 10, or even 5 years ago. The old standby in succession planning that businesses were once accustomed to, is having their leaders being “home grown”, groomed from within the company for years. And, if leaders are recruited externally, most often they come from within the industry (“hit the ground running” type role) to quickly assimilate and take-over key assignments.
However, like every great solution (internal grooming) to a problem (talent exits, retires), if companies don’t remain problem vs solution focused, they lose sight of transformation and agility as a company. Based on conversations across industries and within varying size organizations and feedback from our client partners, transformation in business is mandatory right now. A recent study also shows that the companies that are most disruptive have hired leadership from outside.
Keeping a C-suite that was born and bred within your company (while excellent in practice) will isolate your organization from innovation and the ability to see the world from a different perspective. In the next few years, we expect to see leaders recruited from outside of the industry filling key executive roles in organizations and board, picking up more and more steam. There are many trends in action such as healthcare tapping the retail sector and the automotive industry hunting for talent in technology. To be clear, there are benefits from direct industry knowledge, but there are also distinct advantages to a new voice in the room.
We see this as a positive development. Take a look here at what we’re witnessing today and why to consider embracing a hiring strategy that includes cross-industry executives.
It is easiest, and usually feels safer to stick with what is comfortable and familiar. But what is easy and comfortable, is most certainly not what is breaking barriers and innovating… The easy and comfortable has it’s time and place, but often leads businesses to having a narrow focus when acquiring new talent. Looking outside of your industry, and away from your competitors, might be the best place to start.
Bringing new eyes into a business, from someone who has no experience in the industry, can actually be a culturally stimulating act and challenge existing norms. An experienced, and curious leader will bring a fresh perspective. Because they will be unfamiliar with the industry, they’ll ask questions that might not have been asked in years, uncovering new ways of problem solving, marketing, and managing along the way.
Industry’s like healthcare and banking have historically operated the same year after year, with employees never leaving the field. While the status quo may be great for maintaining your current business model, when you’re experience a shift, looking to grow, or expanding your market, fresh eyes and outside experience may be just what you need.
Just last year Nestle’ shook things up by hiring, not only an outsider, but CEO Ulf Mark Schneider from the healthcare industry coming from Fresenius. As the healthcare industry is need of adapting to direct consumer experiences and hiring from retail, retail companies like Nestle’ are in a situation of needed disruption and hence looking to healthcare.
Schneider’s move is not yet the norm, but as industries like consumer goods are evolving in disruptive models and with increased competition, new strategies and leadership are becoming required for the “bigs” to hold market share.
While it may seem simpler to hire from within your industry or company, recruiting from another field makes for more well-rounded leadership. Core skills like marketing and sales are transferable from industry to industry once leaders have had a chance to jump in. While there might be a slightly longer learning curve, the payoff is worth it.
We often like to think that the skills necessary for our executive positions are specific to our field and difficult to learn. But a curious, experienced, successful leader from another industry will have the ability to learn the ins and outs in less time than you’d think, while also bringing a fresh perspective that can bring the change you are looking for in your company. Learning industry specific skills is usually much less difficult than learning the core skills of executive leadership, like sales, marketing, and management, which take time and are transferable across industries. In short, you’ll gain more access to highly talented individuals and true functional experts that can grasp the industry specific stuff later.
Push the Limit
The healthcare industry is currently undergoing a major shift from a service and clinical focus to a consumer driven focus. In order to effectively navigate this change, many healthcare companies are choosing to hire executives form consulting companies like McKinsey and Bain & Company. These top executives bring an agile approach, allowing them to try new things, quickly learning what does and does not work, and pushing the industry to change at a speed it would not have otherwise. This is a great way to test your internal pace and cadence. It’s also common for private-equity backed executives to lead decisively and with urgency. Sometimes these non-traditional tendencies lend themselves well.
When you are thinking of your next key leader, consider all factors. Know the challenges you’re currently facing, the future of your industry, and the skills required to get you there. Looking outside the industry, in a move others may see as out of left field, might be the difference that sets you apart in the end.
Image sources: Axel Griesch / Finanzen Verlag