Why opting for an outsider can deliver the cultural shift you seek

01/19/2018
 
As Executive Search consultants, we are often tasked with thinking ‘outside the box’ when drawing up a shortlist of candidates for senior positions. However, when we present candidates from outside the sector alongside candidates from within, one with specific knowledge and contacts from within the industry is invariably the one chosen. Martin Peterson of Signium Sweden looks at why sometimes opting for the outsider is the right thing to do. 

Opting for the outsider

Going against the grain takes courage. When it comes to strengthening your leadership team, opting for the candidate that doesn’t have industry experience falls into that category. 

As Executive Search consultants, we are often tasked with thinking ‘outside the box’ when drawing up the shortlist of candidates for senior positions. However, much more often than not, when we present candidates from outside the sector alongside candidates from within, the appeal of the guy with specific knowledge or contacts from within the industry invariably is the one chosen.

However, when an organization faces cultural change, or wants to strengthen its leadership, recruiting externally has often proved a valuable way to reinforce the values required in the organization. CEOs and Hiring Executives who have the courage to choose a leader from a different industry may achieve real progress in culture and leadership.

When recruiting a new leader who can have a significant impact on your existing culture, we recommend the following methodology:

  • Identify the values, attitudes and culture of your organization
  • Define the role carefully and expectations for short term and long-term objectives
  • Recruit externally from different industries
  • Measure each candidate’s values, attitudes and motivations
  • Make your decision not only on gut feeling - select the candidate with the best match to    your previously established criteria

Leadership is based, among other things, on the ability to establish trust and that ability is often based on knowledge. This is definitely a reason that many managers prefer recruiting within their industry. Restricting the candidate pool to those already in an industry is common especially in technology based organizations but also in banking, finance and healthcare. There is a risk that a leader with experience and knowledge from a particular industry falls back into old patterns, rather than focusing on long term and more complex leadership issues.

Leaders from an adjacent industry, while lacking technical, operational and industry-specific knowledge, are more likely to look upward and outward toward more strategic and overall objectives. Lacking industry-specific knowledge, the external leader may have less tendency to get caught up in micromanaging day to day practical and operational issues.

The outsider has the advantage of being able to ask embarrassing questions while taking nothing for granted. The reinvigorated executive team around the new leader stops making assumptions and starts to question old habits. It’s a paradox that lack of the long internal experience with specific products and predefined tasks allows the new leader to drive successful cultural change and improve the leadership team.

When seeking to recuit new leadership, the team often sets ambitions to recruit from another sector. These healthy ambitions may fall by the wayside as the search progresses due to the natural forces for recruiting managers to select candidates standing as safe choices with specific industry knowledge. Decision-makers not only draw comfort from a candidate´s familiarity, but with qualifications, work experience and career paths that are similar to their own. Suddenly evolution seems safer than revolution.  Low risk is a natural choice. However, the risk is that the safer choice of candidate will reinforce traditional patterns, behaviours and norms that each industry is always associated with, instead of reinforcing what you really were looking for – that is to strengthen the company's values, unique culture and leadership.  

A recently presented study, Chefsstudien (the Management Study), from Swedish management consultant Preera, confirmed that successful organizations are characterized by a leadership focused on their approach to people management, approaches, attitudes and behaviours, rather than more traditional issues.

In the study, covering 250 executives from 15 different sectors, over 90% of the respondents value cultural aspects such as openness, trust and dialogue as the most crucial for a successful organization. The correlation between success and these values is the strongest throughout the study. http://www.preera.se/om-oss/vilka-vi-ar/ (Swedish only).

Next time you are recruiting new leadership, consider how recruiting a leader externally may provide a better opportunity to choose the leadership characteristics best suited to the stage of change that your organization is seeking. If you choose to look over the fence and recruit a good leader from an adjacent industry, you may give your organization a leader with greater opportunities to develop overall and strategically crucial issues related to values and culture. It can make a big difference!

In preparing your position profile, consider being less specific about how many years of leadership experience your new leader will have within your industry and whether the traditional advanced degree or educational background is most important. Instead, take time to reflect on how to identify the leaders who have the right values and the right attitude for your organization. Design a system to uncover and measure these soft values of the candidates that you choose to interview.

By focusing on your new leader's attitude, motivation and values, you have more opportunities to influence your organization in the direction you're aiming for!

Martin Peterson is a partner at Signium Sweden. If you would like to discuss this article or your Executive Search and Leadership Consulting requirements with Martin, you can email him at martin.peterson@signium.se