‘‘Among the greatest business leaders today are those who have crossed industry boundaries.’’

When companies need to hire a chief executive, team member or consultant, they usually look for people with industry-specific experience. Sometimes this decision means they will get the same old perspectives they have always had. Similarly, when organizations purchase new software or hardware, they generally limit their search to technologies designed specifically for their own industries. Again, the question arises: how innovative can a company truly be when it is using the same tools as every other company in its sector?

The fact is, leaders whose experience is limited to a single industry’s strategies, processes, techniques and tools cannot deliver what the marketplace demands of companies today – nothing short of extraordinary and sustained creativity and innovation.
Leadership: it’s about process, not product.

Many business professionals – whether leaders, human resource managers or consultants – still believe success is most easily accomplished through specialization. While this may be accurate for technical experts, such as engineers, accountants or medical professionals, it is a false assumption at the corporate executive level.

The truth is, specialization in a particular industry is unnecessary, particularly at the leadership level. What leaders really need to know is how to choose and develop the right people, run and grow a business, and especially how to manage change. These skills are a matter of universal processes, such as defining goals and strategies and identifying customer needs and wants, rather than intimate knowledge of how to manufacture the company’s specific product, a sphere that is best left to engineers and other technical experts.

Among the greatest business leaders today are those who have crossed industry boundaries. Their varied experience has given them a broader perspective and the fresh thinking to go beyond traditional approaches to competitive challenges and corporate, product, marketing and demand fulfillment strategies.

‘‘Perhaps the most famous example of a leader who has successfully crossed industries more than once is Louis Gerstner, Jr., first the CEO of American Express, then CEO of RJR Nabisco, and then Chairman and CEO of IBM where he was not only successful, but achieved cult status,’’ says Lou Kacyn, a Chicago-based partner at executive search firm Egon Zehnder International, a leading global executive search firm that interviews over 200,000 executives a year.

Rather than technical expertise in a specific industry, leadership competence is about proficiency in universal processes that are applicable to any company. Whenever flexibility and adaptability are desirable attributes in new leadership talent, look for people who have demonstrated their ability to apply the following core competencies across industries or at least in different divisions of the same company:
-strategic planning;
-change management;
-creativity and innovation (creating new products, modify existing ones, and opening new markets);
-business acumen, finance;
-customer focus (internal and external); and
-people skills, such as motivating, conflict management, relationship building and coaching.

Kacyn has been directly involved in placing executives out of one industry and into another. ‘‘When people discuss great CEOs, Gerstner will always be included,’’ says Kacyn. ‘‘When he transformed IBM from a product company into a rapidly growing services company, he drew upon a customer service perspective he had acquired at Nabisco, together with his experience at American Express where he learned the value and profitability of a services model.’’

When companies want to fill an internal vacancy or if they need expertise that does not reside within the company, they often look for people who have experience in their industry. Sometimes this decision means they will get the same old perspectives they’ve always had. On the other hand, companies that recognize that competency and capability come in the form of skill sets, including creativity, innovation, analytical and adaptive skills and a proactive orientation have a competitive advantage. These individuals can use their acquired skills and techniques to develop tactics and strategies that can be modified and applied to any industry.

Gerstner is responsible for keeping IBM together by repositioning its corporate strategy rather than splitting the company apart as others had suggested. His historic turnaround of the company from the brink of bankruptcy and mainframe obscurity back into the forefront of the technology business is chronicled in his book Who Says Elephants Can’t Dance (Gerstner, 2002).

In his introduction to that book, he states that when he was first approached to lead IBM, he could not conceive of running the company given his lack of technical background. However, he changed his mind when members of the search committee made a passionate appeal that the board was not looking for a technologist, but rather a broad-based leader and change agent.

‘‘How innovative can a company truly be when it is using the same tools as every other company in its sector?’’

Another example is Geoffrey Frost, whom Egon Zehnder International brought from Nike, where he was global directorof advertising and brand communications, to Motorola to serve as executive vice president and chief marketing officer: ‘‘Before his recent death of a heart attack, Frost transformed Motorola’s marketing efforts from an engineering-run ‘any color as long as it’s black’ model (famous Henry Ford quote) into a customer-centric and hip ‘Moto’ rejuvenation,’’says Kacyn. ‘‘He drew upon his experience at Nike where he was in charge of advertising and strategic marketing. In fact, Motorola’s current Chairman and CEO, Ed Zander, called Frosta ‘marketing genius.’’’ Upon Frost’s passing, Zander recalled, ‘‘Fromthe start, he shared his infectious enthusiasm for breaking from established norms and challenged all of us to see the world in a new way.’’ Prior to Nike, Frost was executive vice president at Foote, Cone & Belding, one of the top global advertising agencies.

Another industry switch from GE was Robert Nardelli, who now serves as chairman, president and CEO of The Home Depot, following his tenure as president and CEO of GE Power Systems, where he leveraged technology, innovative products and services, as well

Nardelli had switched industries before, to GE from global construction equipment manufacturer Case Corp., where he was first executive vice president of the Worldwide Parts and Components group, and then led Case Construction Equipment’s global business.

There is much emphasis today on the requirement that leaders be flexible and adaptable. What better way to acquire and practice those skills than by switching industries? It takes a flexible individual to grasp and control knowledge from a variety of industries and apply intelligence gained in one for the benefit of the other.