While many senior executives look within their industries for advancement opportunities, it’s a good practice to step back for a moment and look at the bigger picture: Are you in the right industry for your skills and aspirations? Do you want to keep working in banking, retail or consumer goods for the rest of your career? Or would you be better off moving into technology, manufacturing or distribution sector?
Switching industries can pay big dividends for a senior executive who lacks advancement opportunities in his or her current field or has been "downsized" by a recent employer. Regardless of your individual circumstances, shifting gears can provide an excellent opportunity to take your career to a higher level.
While most organizations first consider internal candidates for the senior leadership team, an important CEO study found that hiring a leader from outside the industry can pay significant dividends. That 2012 study, "Outsider CEO Succession and Firm Performance" by Abu M. Jalal and Alexandros P. Prezas of Suffolk University in the Journal of Economics and Business, found that many companies improved long-term performance by bringing in a CEO from another industry.
While companies bringing in a CEO from the same industry had higher returns during the first few months, the picture gradually changed over time. “It appears as if the market is not as favorable, initially, about the prospects of firms hiring CEO successors from another industry," said Jalal and Prezas, "but once these firms introduce policy changes and demonstrate better performance under their new CEOs, the market turns and remains in their favor."
Making the decision to switch industries is not easy for most senior executives. It's like moving your family to a new city and having to learn the local traffic patterns, schools, restaurants and community leaders. Certainly, the easiest and fastest career move for many executives is to look within the industries where you have experience and the roles where you have proven yourself.
But, if you are not progressing in your current field or feel stuck in an industry that's contracting or in a steady-state mode, you may find that a switch is the right move to get your career going again. Another good reason for making a change is when you feel bored or stagnant dealing with the same types of industry-related issues day after day, year after year. Rather than "age in place" waiting for retirement, why not keep growing on a personal and professional level by trying a new field?
Whatever the reasons for your decision, you need to understand how to translate your current skills and experience to gain entry into a new field. You should also be prepared for a potentially longer executive job search.
In general, the most successful type of industry change involves remaining in the same function—such as chief financial officer (CFO) or chief technology officer (CTO)—while transferring your skills to a different industry. Of course, there are times when a company specifically seeks an industry outsider to bring in a fresh perspective.
Since hiring any senior executive is a high-risk and costly endeavor, employers want to make sure that the successful candidate can hit the ground running and not need months of unproductive learning time in order to come up to speed.
The following six-step strategy is designed to maximize your attractiveness as a candidate and minimize the perceived risks of hiring a newcomer to the field.
First, make a realistic assessment of your transferable experience and skills. For many senior executives, the most straightforward career change involves staying in the same function, but transferring your skills to a different industry. If you are the chief financial officer (CFO) of a mortgage lender, for instance, you may be able to convince the chief executive officer (CEO) of a software company that you can apply your experience and skill set in a similar role in that industry. The same strategy holds true for functions like marketing, sales, technology and human resources. Although the nuances of human relations, for instance, will differ from industry to industry, a senior executive should be able to build a convincing case for the transferability of his or her skills.
However, if you are a CEO, COO or experienced general manager, you may have to dig down a little deeper when assessing your skills. It may not be immediately evident that you can step into a new field without spending significant time getting up to speed. Therefore, you should start making a long list of your accomplishments, and highlight examples that could apply to a different industry. For instance, if you were able to increase productivity at your current company while reducing headcount, think about the steps you took to achieve that goal and how you could achieve a similar result, if requested, in a different field. Project management is another skill that transfers well from one setting to another, so keep in mind any achievements along those lines.
It's also important to do some winnowing, as not all of your leadership or managerial experience may apply in a new setting. If your management style includes walking around the production floor and talking with employees on the front line, you'll need to take a different approach in a field where the workforce may be distributed across the country or around the world. Other leadership approaches, such as coaching and mentoring, seem to work better in some settings than others.
Ideally, by the time you complete this step, you will have three bundles of skills and experiences that will help you understand what to emphasize in your resume and interviews with a recruiter:
After completing a thorough self-assessment, it's time to identify several promising target industries that might be a good fit for your personality, skills and leadership experience. At the same time, you should think about fields that are mostly likely to experience solid growth in the next decade due to demographics, technology, resource limitations or other factors. As an example, a generation ago, many smart executives got out of the railroad industry and moved into commercial aviation and aerospace.
Today, technology and healthcare are among the world's "hot" industries right now, and fields like banking, insurance, law and accounting never go out of style. Again, there's nothing wrong with switching to a mature industry like consumer packaged goods (CPG), agriculture or mining—just be aware that the dynamics are different in a high-growth sector.
Next, learn as much as you can about your target industries. Spend time online, read industry trade publications and business news resources, and talk with friends and colleagues who are already in the field. Your goal is to learn as much as you can about:
By the end of this step, you should feel comfortable holding up your end of a conversation with an executive in your target industry, using "insider" terminology and expressing your opinion about the issues facing the field.
Once you determine which industry you are targeting, it's time to look more closely at companies within that sector to see which ones might be interested in bringing an "outsider" into the leadership team. For example, a struggling company might need a seasoned executive with strong financial skills, while a growth-oriented company might welcome a marketing professional who can develop digital strategies and campaigns.
Focus on building a network in the targeted industries. Networking is the most effective way to get your foot in the door of a new company and a new industry. Join organizations where you will meet contacts, and attend conferences and trade shows. Companies are more willing to take risks on someone referred to them by individuals who can attest for the individual’s abilities. Here are some other tips:
Once you determine which industry you are targeting and why, you need to define the special value you can bring to a senior position in that particular marketplace. Therefore, you should have a thorough understanding of—and ability to articulate clearly—what your prior industry experience has in common with the targeted industry. You should use the language of the new industry to reinforce the relevance of your career accomplishments. It's also important to be able to translate your functional expertise into terms that will be meaningful to those in the new industry, with particular emphasis on quantifiable accomplishments and achievements using dollar amounts, percentages and other figures.
What are your differentiators for positioning? What makes you uniquely qualified over another candidate that has the industry background? Industry changers frequently bring many advantages, including:
On the other hand, you may not want to be perceived as an outsider, because that might increase the risk factor for the decision-makers at the new company. In fact, you may need to emphasize how your skills and experiences will enable you to hit the ground running in the new position, even though it's a different type of industry. Since different companies have different cultures—even in the same sector—you should be able to direct the interview conversation in either way. In any case, you should have a clear idea of the value you can bring to a new employer in your targeted industry.
To help make an industry switch, you must focus on building a network in your targeted sectors. Networking is the most effective way into the new industry. In some cases, you may be able to use your existing contacts to meet professionals in a new field. In addition, you should consider joining organizations where you will meet new contacts, and plan to attend conferences and tradeshows in the new field.
Don't forget to polish up your social and online networking skills as well. You might add new contacts to your LinkedIn network, or post references to interesting articles about trends in your targeted industry. There may also be ways to increase your visibility by contributing guest articles to trade publications. For instance, if you are in financial services, you might write an article about, "A Banker's Perspective on..." Or if you are in technology, you could highlight a trend that's affecting healthcare, energy or another targeted industry. That can be an important step in establishing your credentials for an executive search firm, as well as expanding your professional network of contracts.
Remember that companies are more willing to take a risk on hiring you if you have been referred by a professional in the same field who can attest your abilities and potential. So, if you have only a limited number of contacts in the target industry, take the time to grow your network and identify people who can help you make a successful career transition.
Hopefully, the first four steps will lead to a job offer and the start of a new career opportunity. But if you've been trying to get your foot in the door for several months, and nothing seems to be happening, here are some other steps to consider:
Remember, the hiring decision will be based on which candidate is the most convincing about producing desired results and creating practical solutions to current challenges. By knowing your own skill set, understanding the new industry and building your network of contacts, you will be well positioned to be the successful candidate.
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