Hiring Industry Outsiders

Hiring Industry Outsiders

Tom, a third-party executive recruiter, is trying to fill the VP of Marketing position at one of the “Big Three” in the Detroit auto industry. He has found several candidates with impressive domain experience but only a few have worked in the auto industry. Refining his focus, he could steal Carol from their biggest competitor. This entails significantly overpaying to recruit her. However, the impact of Carol’s hiring is twofold as it both adds value to the company and hurts the competitor.

Carol starts off promisingly, making strong incremental moves that drive greater efficiencies, while leveraging previous relationships with some of the top creative firms. After two years, though, stagnation sets in as Carol’s initiatives have run their course. In the fourth year of her tenure, the division’s growth goals are not met and progress stalls. Carol is terminated six years after joining the company and Tom is once again tasked with finding a new and exciting candidate—with auto industry experience, of course.

There is a reason for bringing in a new executive; either the company fired the previous one or a new strategic role must be filled to lead the organization in a more effective and competitive direction. In either case, the company seeks something different from what it has already had. The company’s leaders are looking for someone who will amaze them.

The typical recruiting process begins with a search for candidates with industry experience, leading to a shortlist from which the hiring starts. This is a replication of the status quo. The process and beliefs contradict the intent of attempting to produce something unique. Looking for those with industry experience is like searching for kindred spirits. It is, arguably, equivalent to reserving jobs for those of the proper race and caste. One with industry knowledge is regarded as an insider; one who has been vetted and is one of us. It is the professional version of tribalism.

This narrow-minded way of thinking promotes the “Sui?Generis?Fallacy” whereby insiders believe that their industries are unique and mutually exclusive from others, with far too many nuances for a new individual to possibly grasp. Following this logic, an outsider would simply require too much time and training to understand and adapt to the industry.

My background is in innovative thought—the environmental conditions, processes, and stimulants for creative thinking. One essential process for creativity is taking knowledge from one area and applying it to another. J.P. Guilford codified this in his work on divergent thinking. Your goal should be to generate as many ideas or solutions as possible, ultimately leading to better solutions.

We have found that industry experts typically possess a reservoir of ideas and best practices. However, such experts tend to only use their playbook, failing to generate beyond best practices. The ideal model brings in rookies, or outsiders, who have a general concept of the rules but lack the baggage and scarring that may prevent them from breaking the industry and domain rules of innovation. Outsiders provide a genuine competitive advantage. These new employees can offer fresh and dynamic ideas, unhindered by years of normalization. These are the new insights your competitors lack. This is how you can create new markets and redefine best practices.

Your organization already has deep industry experience. I would bet that your organization is in the top ten of industry experience in the world. So, what is game-changing about adding yet another industry expert? It would offer little benefit and the hire would not move the needle.

Now, let’s say you hire a domain expert who has never worked in your industry. Such an expert would bring fresh eyes in seeing what strategies and tactics are transferable across industries. He or she would be frustrated by industry norms and actively work to break them, aiming to create a new value stream.

If you are still worried about bringing in an outsider, remember that he or she would have an army of lieutenants to provide a lay of the land and prevent things from going off the rails. Would this be an acceptable level of risk with the benefit of introducing a high level of challenge to organizational thinking? It may not work out; the odds are stacked against the hire. If it does pay off, however, it could be the competitive advantage you desire, changing your industry in your favor.

References

The Outsiders: Eight Unconventional CEOs and Their Radically Rational Blueprint for Success

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