Business leaders are under the spotlight from customers and boards to innovate, to adapt to the new norm and equip their organisation with the tools, skills, capabilities and products to survive in a world where competitors can emerge from unlikely places.
As a firm that works with listed, PE backed and private organisations, we are privileged to have a window into many different organisations. One of the more significant shifts that we have seen is organisations becoming more open-minded about where their next leader is coming from, no doubt in an effort to remain relevant and ahead of the curve in a rapidly evolving business world.
For years, highly talented candidates who had the right skills and desire for the role, but lacked sector experience in the client’s sector, were discounted. Yes, there will always be instances when sector experience is necessary; certain roles within finance and niche roles within manufacturing systems or off-shore oil rigs make it very difficult to look outside a sector.
For corporate functions however, there is a real opportunity to challenge the status quo, and if you are brave enough to do so, there are three significant advantages that come from looking outside your sector.
Innovation is often seen as imperative to the future success of organisations. Innovation is not always about creating something “new” but bringing something new to that organisation.
Significant benefit can be derived from bringing people into your organisation that are not like you. In recent months we appointed a CIO for a FTSE 100 who has a very different approach and style to what they have had traditionally. This is not just in terms of outlook but also his approach to the team dynamic, a belief in empowerment, flexible working and even wearing his bike leathers into work in the morning!
By bringing this person in, they are challenging how they do things on a broader basis, rather than just from a technology perspective.
2. Digital Transformation
In the new era of Digital, the rise of the Gig economy and with the digital giants encroaching even further into areas we never could have imagined (Amazon Health anyone?) organisations need to step out of their comfort zones and work out how to transform their core business. If you are not already doing it then you may find your Iceberg is melting and it’s too late to move!
Bringing talent in from sectors that are further along in their digital journey can enable businesses to jump start their own transformation. In order to take some of the risk out of a large organisational change, bringing in someone who has done something similar and can understand the pitfalls will mitigate some of the risk AND allow you to innovate.
An example of late has been the number of CIOs that have moved from the logistics sector into Insurance. Taking a technology leader from a business that operates with margins of no more than 3%, where systems have to be operational 24×7, and where clients have little loyalty, to a sector that has high margins and more disposable funds but often less control around costs makes a lot of sense. By bringing in experience of a more efficient model, it is enabling these businesses to make huge inroads into their costs and have more available finance to transform their businesses while digitising and improving the customer experience.
If you are operating in a sector that is struggling to hire diverse candidates from within your own sector, then start looking outside!
There are so many sectors that continually struggle to get women in senior positions for example and yet insist that the person must have sector experience. If your industry has always struggled with attracting diverse candidates, then fishing in an already minuscule pool will be exceptionally difficult. What’s more, the individuals who meet both the diversity agenda and have sector experience are approached almost daily. They know they are in high demand and are very selective about the propositions they will listen to, making them much harder to secure.
Organisations need to move away from hiring the type of people that they have always hired and stop hiding behind the false premise that no one from outside their sector can understand the speed or complexity of their business. As technology and processes become more uniform and standardised across all sectors and industries this is no longer true.
What can you do if you are not doing this already?
I am biased in this regard, but any search or interim firm that mandates sector experience should not be used. We are passionate advocates of 50/50 gender split shortlists which for us often mean looking outside of the client’s sector for this to happen.
It is easy to disregard candidates for not knowing the sector, it is much harder to identify talent that can join and organisations and positively disrupt it. Experience working in a corporate function in a specific sector does not guarantee skill or capability. Hiring the person from the market leader in your sector in an effort to have her replicate the same for you does not imply that you will then be the market leader in two or three years’ time. The goalposts will likely have shifted.
Good Search and Interim firms will look beyond the names of the organisations on the candidates profile. Of the past ten searches we have run for CIOs/CTOs and CDOs, none of the successful candidates have come from the clients sector and four have been women.
It can be harder to find candidates from outside your sector, and a greater level of creative searching therefore needs to take place, but in our experience, it is worth taking the time and effort to challenge traditional thinking and find the person who is truly able to take your organisation to the next level.