Is Sector Experience Overrated?
As little as a few years ago, a typical management profile would entail a leader who spent the majority of his/her career working within the same industry the company is positioned in. At best, they might have come from an adjacent industry (think insurance to banking). There were reasons for this trend. The prevailing corporate theory was that a talented executive who had had exposure to working within a competitor or a market leader’s infrastructure would be able to bring those practices over to propel equivalent growth. At worst, it represented a safe bet by bringing in someone who knew the industry, and would therefore at least keep the ship afloat. At best, the upside was theoretically limitless.
However, myriad changes have manifested over the last decade that have – possibly permanently – shifted these recruitment paradigms. In a period where technology in 2019 can be rendered obsolete by 2020, it is even more imperative for companies to shake off the talent rigidity that was once characteristic of a multitude of industries. The benefits of sourcing talent transcending industries can be boiled down to three main factors:
[perfectpullquote align=”full” bordertop=”false” cite=”” link=”” color=”” class=”” size=””]When bringing in talent from external sectors, companies open themselves up to new perspectives that challenge long-held and maybe even redundant beliefs. [/perfectpullquote]
The word “disruption” is used extensively to describe a new player’s innovative way of thinking that revolutionizes or “disrupts” the groupthink of incumbent players. For the purposes of this explanation though, the word “transformation” is more apt. When bringing in talent from external sectors, companies open themselves up to new perspectives that challenge long-held and maybe even redundant beliefs. Once these chains of habit are broken at a fundamental level, transformation that advances and enhances operations can begin to take place.
This scenario is similar to the story of the baby elephant who was tied to a tree by his owner. As a baby, he simply could not break free of the rope no matter how hard he tried. Thereafter, even after growing into a strong adult, he did not bother trying to break free as by then, he was conditioned to believe it was impossible. To avoid becoming the elephant, companies need to rethink existing ideologies to identify new growth platforms.
The status quo management recruitment philosophy of hiring within industries has one key flaw: it assumes that the industry will look the same five, ten and maybe even fifteen years down the line. With the advent of digital technology, that is simply not true. As technology moves along at breakneck pace, consumers are also becoming more and more tech-savvy which means businesses need to embrace the digital revolution on an accelerated timeline if they are to stay competitive. However, not all digital movements are created equal. Some sectors and some companies within these sectors are farther along the line than others, which represents an opportunity for the laggards to prevent themselves from becoming also-rans. By installing an executive with that sort of background who has “been there and done that”, companies gain the dual benefits of having a defined, proven roadmap while also being able to proactively mitigate the risks that arise from such a large-scale project.
Beacon of Advancement
A common saying amongst change management experts is, “when nothing changes, nothing changes”. It is used to encapsulate the idea that to see a different set of results, businesses need to start doing things differently. When hiring someone with a distinct skillset from an external industry, it galvanizes confidence in customers, employees, and other stakeholders that the company is willing to push the envelope and differentiate itself from competitors.
While some industries absolutely require management teams to have specialist technical knowledge, there is a strong case to be made for focusing on an employee’s individual skillset rather than industry background. With some multinationals already paving the way with this philosophy, it is a matter of when, and not if, talent pools will become mobile across sectors.