I recently had the opportunity of meeting up with some former colleagues who worked with me in my startup many years ago and following its sale, went on to do other things. I was delighted to hear that they have all gone on to successful careers with most heading businesses. What was more interesting to hear were the problems they faced in today’s economic climate.
Whilst the problems in Greece and the slowdown in the Chinese economy was a common theme, the lack of qualified staff was also a key bugbear for them. They moaned the lack of experienced staff with the right qualifications to fill their ranks and this more than anything else, was what was holding them back from expanding their business further. It was amusing to hear them complain as these were the same young guns, in those startup days, who had taken on any challenge head on and disparaged the structured world of MNCs that pigeonholed employees to specific tasks….yet here they were doing exactly that.
If the company’s objective is to maintain the status quo then obviously I can see the benefit of recruiting someone from within the industry who has industry knowledge and possibly industry contacts. He or she can hit the ground running without much trouble. However, to expect that person to come up with groundbreaking ideas given that they are likely to be “coached” in the industry’s norms is highly unlikely and may not be a reasonable expectation.
If, however, the company is looking to grow, does it make sense to hire someone from within the industry? Granted its the safe choice, which is why 99.99% of HR departments in MNCs advocate this approach, but as Einstein once said “We cannot solve our problems with the same thinking we used when we created them”.
In today’s highly connected world, the need for a more diverse team is critical. The need to cross pollinate ideas and best practices from different industries through recruitment is a powerful tool that can save a company millions of dollars in failed ventures and consulting fees. Companies that continue to look for staff with long employment records in their own industries are likely to end up being overtaken by the next Uber, Airbnb or Tesla.
But how does one hire a senior executive from another industry most effectively. Here I can speak from experience. I have had some bad experiences, even some disastrous ones, but in general, most of those who crossed industries have shown an eagerness to learn and end up being top performers.
1. Is the candidate a good performer in his/her current industry?
It sounds like a no brainer, but how often have we heard candidates tell us that their current industry wasn’t a good fit for them which is why they did not perform well. Star performers thrive in any industry because they understand what is needed to succeed. They know how to manage bad bosses, tough colleagues and rough working environments. On the other hand, I have often found that poor performers end up performing poorly wherever they go because there is always some excuse or reason to account for their failure.
2. Has the candidate shown his/her ability to adapt and be flexible?
This is very important and one of the worst hiring mistakes I made was to bring on board a highly talented star performer from another industry without assessing her ability to adapt to the company culture properly. The clashes and ill will generated between the existing senior management and her due to her inflexibility almost threatened to tear the company apart till I had to make a hard decision to part ways with her. Moving to a different industry requires the new hire to adapt regardless of how good they are. You can’t change industry norms overnight. The best hires are those that learn the norms then find ways to impose new ones while getting buy-in from colleagues and staff.
3. Does the candidate understand why he/she is successful?
Skills and knowledge can roughly be classified into three categories. The first are the general skills and knowledge that are transferable to any industry. The second are those skills and knowledge that are specific to that industry. The third are skills and knowledge that are specific to that company. Candidates who are strong in the first category will carry a lower risk when switching industries as they have a strong business foundation. Those who are strong in the second will be able to add value in terms of introducing best practices and ideas from the industry that they came from. Be wary of those who are only strong in the third category. Knowing their way around a company might imply a strength in playing internal politics which while desirable to a certain extent, will not add much value unless this is paired with strengths in the other two categories.
So, ultimately, what would I look for in a resume for someone who might make a safe bet for a cross industry position?
1. Has the candidate spent at least two years in each company in his/her resume?
I use two years as a rule of thumb due to the cyclical nature of most industries. The first year to understand the business cycle of the industry and the second year to add value. I take anything shorter than one year as being insufficient to understand an industry fully and if there are too many such jobs on the resume then I would probably classify that person as a job hopper unless they were headhunted to their subsequent positions.
2. Has the candidate currently been in the same industry for more than ten years?
If a candidate has spent too long in the same industry, there has to be a question mark as to whether he/she will be able to adapt to a new industry or how long it would take them to do so. If however, there are jobs following that ten year stint in other industries then it should be fine.
3. Does he/she have a consistent increase in his/her level of responsibility and remuneration even as they crossed industries?
This shows a candidate’s ability to adapt and perform. If all moves are lateral with no upward movement then more questions should be asked of the candidate to assess his/her suitability.
4. Does he/she have the necessary skills for the job?
Inspite of what has been stated above, some jobs absolutely need specific skills. You can hire a CFO from another industry to fill a CFO position in your company, but that hire would still need to have the qualifications and skills of a CFO. This relates to item(3) above.
Ultimately, there is no sure thing as evidenced by mistakes made by even the most experienced executives, and what is listed above goes against the current thinking of traditional HR practitioners worldwide. However, I feel that HR has got to take a good hard look at itself if it is to meet the needs and remain relevant to the companies of today.