Why Do CEOs with Cross-Industry Experience Succeed?
“The greater danger for most of us lies not in setting our aim too high and falling short, but in setting our aim too low, and achieving our mark.” ―Michelangelo
You must have heard about mobile number portability in India where cell phone users from one service provider can easily switch over to another service provider without changing their cell phone number. Similarly, there are CEOs who change their industry yet succeed as CEOs without losing their identity and image by leveraging their experience and expertise. In fact, there are some common qualities that are essential to succeed as a CEO, such as passion, dedication, commitment, flexibility, adaptability, conceptual skills, and transferable skills, to name a few. They emphasize organizational culture and align their strategy as per the industry, competitors, and prevailing global business environment.
Let’s take a look at a few CEOs with cross-industry experience and examine how they succeeded in other industries without any experience. For example, Alan Mulally worked in the airline industry (Boeing) but also proved himself as a successful CEO in the automobile industry (Ford). Similarly, Daniel Akerson, grew up in the technology and telecommunications industry but had much success as the CEO of automotive company General Motors. Bob Wright, head of GE Capital, went on to head media company NBC. It is obvious that these CEOs’ success had nothing to do with domain skills. These iconic CEOs succeeded due to various factors, including transferable leadership.
The stock market goes up when successful CEOs are hired by companies from other industries because of their past industry experience, image, and leadership brand. Leaders are portable, and leadership skills are transferable. Transferable leadership is the ability to transfer leadership skills and abilities from one industry to another as per the business environment. Some leadership skills are commonly required to lead, irrespective of the industry and environment. CEOs with transferable leadership skills and abilities can succeed in any industry and environment as they carry a unique mindset, skill set, and tool set to lead organizations. Succinctly, these CEOs possess soft skills with cross-industry experience.
To become a successful leader, it is essential to integrate self-management skills, domain skills, and transferable skills effectively. However, when you shift from one industry to another, your transferable skills matter more than the so-called self-management skills and domain skills. CEOs make use of their transferable skills and transferable leadership to achieve success when they shift to another industry. Additionally, they are visionaries with the ability to build effective teams and work under pressure, especially in volatile, uncertain, complex, and ambiguous global business environments.
Transferable skills also are known as “portable skills,” and transferable leadership also is known as “portable leadership.” I served in the Indian Air Force and developed qualities such as discipline, dedication, team spirit, leadership, and commitment. When I became an entrepreneur, I leveraged these skills. Currently I am in the teaching and training area, and these skills help me immensely. I made some changes in each profession to succeed.
CEOs come with basic leadership style and experience that they customize as per the new industry. They remain same at the core level but bring behavioral and leadership changes as per the requirements of the particular industry or sector they enter.
Cross-Industry Experience Adds Value
“Lead and inspire people. Don’t try to manage and manipulate people. Inventories can be managed, but people must be led.” ―Ross Perot
A 1996 Academy of Management Journal study that found that CEOs with “medium or moderate experience” in an industry performed better than CEOs with high industry-specific experience (http://www.businessinsider.com/these-experts-say-ceos-from-other-industries-make-better-leaders-2013-6?IR=T). CEOs with cross-industry experience are often curious and ask questions to understand the systems and structures. They are free from preconceived notions and ideas since they come from a different industry. They are adaptable and open to learning and exploring.
Cross-industry experience helps C-suite executives to take the best of everything and discard the rest. It helps them think from multiple perspectives and promote out-of-the-box thinking. CEOs from the same industry often tend to think from a similar perspective and use with routine tried-and-tested tools and techniques. In contrast, CEOs with cross-industry experience demonstrate adaptability and flexibility and explore new leadership tools and techniques.
When CEOs change their industry, they must learn the jargon of the new industry and understand the products and processes. At times, they lack contacts in the new industry. Setting these concerns aside, CEOs with cross-industry experience can perform better than those from the same industry. When you look at Lou Gerstner of IBM, Meg Whitman of eBay, and Alan Mullaly of Ford, for example, they added value to their new organizations from their previous industry experiences.
Industry Specialists vs. Broad-Based Generalists
Who do you think will perform better—industry specialists or broad-based generalists? Although it depends on the personality and leadership style of the CEO, typically the broad-based generalists perform better than the industry specialists. CEOs with cross-industry experience are jack-of-all trades and masters of leadership qualities and skills that make them stand out from CEOs with specific industry experience. In a nutshell, breadth of experience vs. depth of experience. Of course, both have their pros and cons. But having breadth of experience helps CEOs to deliver their goods effectively and grow as great CEOs globally.
“Skills make dreams happen. They build economies. They make people rich and famous. In today’s world, the demands for skills are staggering. Government, businesses, and individuals have too much to achieve, their goals are huge. They are constantly, and I do mean constantly, looking for people with the right skills. People who can get the job done.” ―Emi Iyalla
Professor M.S. Rao, Ph.D.is the father of “Soft Leadership” and founder of MSR Leadership Consultants, India. He is an international leadership guru with 38 years of experience and the author of more than 45 books, including “21 Success Sutras for CEOs” (http://www.amazon.com/21-Success-Sutras-Ceos-Rao/dp/162865290X). He is a C-suite advisor and global keynote speaker. He is passionate about serving and making a difference in the lives of others. His vision is to develop 1 million students as global leaders by 2030 (http://professormsraovision2030.blogspot.in/2014/12/professor-m-s-raos-vision-2030-one_31.html). He advocates gender equality globally (#HeForShe) and was honored as an upcoming International Leadership Guru by Global Gurus (http://globalgurus.org/upcoming-leadership-gurus). He developed teaching tool Meka’s Method; leadership training tool 11E Leadership Grid; and leadership learning tool Soft Leadership Grid. Most of his work is available free of charge on his four blogs, including http://professormsraovision2030.blogspot.com. He can be reached at: firstname.lastname@example.org.