Executive Search – Why the “Same Old, Same Old” isn’t Always the Best Bet
The force of the familiar is hard to resist. In business as in our personal lives, more of the same can be a reassuring prospect because the path in question has already been traveled, its bumps and hollows are well known, and its potential risks and rewards have previously been evaluated. However, while the well-traveled road might be more predictable, it doesn’t necessarily lead to the optimal destination.
Predictability or Possibility?
When launching a search for senior-level executives, many companies start with the assumption that candidates, as well as the search firms that will be tasked with finding them, should have significant experience in the company’s industry, the rationale being that all involved will “know the ropes” and have a “Rolodex” (i.e., extensive database) of industry contacts, which is indeed sometimes the case. However, exclusivity of focus can prove more of a limitation than an advantage if a search firm has concentrated on only one or two industries for a long period of time. Its search consultants can grow complacent over time and come to believe that, since they know many of the industry leaders in a particular function, they are de facto aware of the entire candidate pool. Such a belief can inadvertently contribute to a “recycling” of candidates among competitors, rather like a game of musical chairs, whereby the same senior managers at different points in their careers end up leading the same functional areas at peer companies. Needless to say, this sort of circular churn is not likely to lead to an infusion of “new blood” “out of the box” thinking, “fresh ideas” or to be conducive to innovation or all of the above which are common goals among companies conducting external searches for new senior leadership.
Too strong a focus on industry experience can lead hiring companies and search firms alike to give short shrift to other important candidate characteristics, such as core values, personality, management style, and cultural fit — all elements that, when hiring senior executives, can spell the difference between failure and success. Regardless of a candidate’s functional match, a good search firm will inquire extensively about the hiring manager’s preferences and the hiring company’s culture, and will also have a proven ability to evaluate candidates on these traits.
Finally, while confining yourself to candidates and search firms with experience in your industry will likely surface players who’ve landed jobs comparable to yours, as well as the search firms who’ve placed them, it might be useful to recall the stock market caveat “past performance is not a guarantee of future success.” This disclaimer seems especially apt nowadays, when the future is unlikely to look much like the past, and the executives best equipped to lead a company into it — as well as the search firms who are capable of finding them — are probably those who can draw on broad and varied professional experience and can assess not only candidates’ functional competencies but also their dominant personality traits and their compatibility with the hiring company’s culture.
Change at the Speed of Light
Today, many business sectors and markets are in the midst of rapid, sometimes disruptive change, as evinced by the decline of print and magnetic media in favor of streaming content and the convergence of technologies like telephony and computing. Even once relatively slow-changing industries such as HVAC (heat-ventilation-air conditioning) and food equipment manufacturing have been transformed as traditional climate control systems have given way to electronics-driven smart homes and intelligent workplaces and commercial kitchen apparatus and restaurant inventory-control systems have been equipped with sophisticated software components and integrated into the IoT (Internet of Things). Emergent industries are also contributing to the changing landscape that is confronting established businesses — witness the effects of Uber on the traditional taxi business, for example.
Finding Leaders Who Can Meet Challenges on Disparate Fronts
The current unprecedented level of technological, market, and social change can sometimes put experienced leaders with narrow industry-specific backgrounds at a disadvantage. Deep and singular knowledge of a particular industry or technology is perhaps sufficient when markets exist in silos or technologies are isolated in vacuums but it is less advantageous in today’s increasingly fluid business environment. In such a setting, leaders with more diverse backgrounds and skill sets — and search firms with broad or diverse practices — are likely the better option. These sorts of leaders are typically unfazed by the new and, in fact, often thrive on mastering it, whereas such search firms, having conducted searches in different industries, usually have access to broader candidate pools and are also typically adept at detecting and evaluating transferable and desirable management skills.
Skills and Experience are More Often Transferable than Not
Much executive — and search-firm — experience is transferable across different industries and business sectors, as are related skill sets. Of course, there is little to no transferability of competencies among leaders of industries or business sectors that require specific technical and regulatory expertise, such as public accounting, law, healthcare, or aerospace. For the most part, however, there is considerable transferability across the skill sets of senior-level business executives in different industries. For example, a senior human resource executive can move with ease from consumer banking to an unrelated industry such as medical devices, in part because such positions are internally oriented; however, even senior leaders in externally oriented, customer- and market- focused functional areas do not need to have backgrounds in the hiring company’s industry, so long as there is some degree of operational or functional alignment between the two. For example, CMOs (chief marketing officers) and CSOs (chief sales officers) can usually move seamlessly from one B2B industry to another, such as from semiconductor manufacturing to industrial components manufacturing or from one B2C business to another such as from the hospitality industry to the brick-and-mortar retail business.
A Commonality of Competencies
This is because whatever the industry or business sector, most senior executive positions (i.e., vice president or c-suite level) entail similar aptitudes and abilities: a deep appreciation of market forces, a thorough grasp of operational imperatives, and a solid understanding of corporate finance and governance requirements on the one hand, as well as strong leadership skills, well-honed team-building capabilities, and an appreciation of organizational dynamics on the other. These key attributes of stellar senior executives have less to do with the industries in which they’ve worked than with their business philosophies, management styles, and professional track records. What’s more, executives that hail from another business sector than that of the hiring company are more likely to respond to disruptive industry change from a different vantage point, enabling them to offer fresh ideas.
Broad-Ranging, Consistent Search Methodologies for Cross-Industry Effectiveness
A comparable line of reasoning applies to the executive search firms that are tasked with finding key leaders. Some companies with open executive positions will as a matter of course retain a search firm that has previously placed leaders in its own industry. However, in truth, a search firm’s likelihood of successfully sourcing an executive that is a perfect fit will more often depend on the breadth of its research, the soundness of its outreach strategy, its account team’s business acumen, its competency-based interview protocols, and the thoroughness and repeatability of its search methodologies rather than on whether or not the firm has placed an individual with the same job title and responsibilities in a company that is a mirror image of the client’s.
This is in part because such “mirror image” companies do not in fact exist. Every hiring company is unique and different. A truly great executive search consultancy is one that understands this truth from the get-go and that has internalized it as part of their daily operations, regardless of the industry affiliation of its clients. Such a firm will spend the time to get to know its clients and to truly comprehend their requirements so that it can tailor its assignments accordingly. It is these sorts of comprehensive search competencies and this kind of attention to detail and dedication to the client that enable search consultants to deliver a candidate who is a true and perfect fit, not just a candidate who is a reasonable facsimile of one recently hired by a competitor. Because, in the end, few companies will succeed simply by imitating the competition. To prevail, companies have to differentiate themselves, which takes not only leaders who are different but who can make a difference, and this, in turn, hinges on hiring search firms with the right practices and competencies in place to find and evaluate them properly.
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- Posted by Ilana Katz
- On April 10, 2017
- 0 Comments