When it comes to driving execution for businesses, it turns out that a deep knowledge of the lay of the land—in this case, the relevant industry—is vitally important.
Data from Korn Ferry’s CEO Readiness Assessment indicates that executives with longer tenures in the same industry are more likely to be skilled at driving execution compared with those who have jumped between industries. At the same time, it helps to have changed companies within that industry too.
Working in a variety of industries provides executives with a range of career experiences and lessons, however, that richness may not translate into better skills in driving execution.
Likewise, executives who spend their entire careers with a single organization may grow as leaders, but their execution skills may be too narrowly honed; this group scored lowest when it came to this fusion of execution skills.
Executives who worked in multiple organizations within a single industry had what appears to be a potent combination: a depth of industry knowledge, and practice driving execution under a variety of conditions and challenges.
In examining career experiences of executives in the study, an analysis shows that CEO candidates who worked in multiple organizations within a single industry excelled at two of three key strengths to drive execution.
For executives, the ability to drive execution is correlated very strongly (.40, according to our analysis) with job performance (Korn Ferry 2014). Driving execution is a crucial but moderately difficult-to-acquire competency. In a complex environment it requires awareness and appropriate deployment of key strengths:
- Establishing accountability by communicating goals and holding people responsible for results.
- Balancing short- and long-term goals.
- Monitoring information at the appropriate level of detail and gleaning broad patterns and essential themes.
Successful execution requires that everyone is clear about the decisions and actions for which they are responsible (Neilson, Martin, and Powers 2008). And yet only 38% of CEO candidates in the study effectively communicated expectations and consequences and held people accountable. But among those who do hold people accountable, 55% of them are industry veterans, 32% came from different industries, and 13% came from one organization.
Balancing short- and long-term.
CEOs need to balance and shift priorities between immediate operating results and strategic initiatives. The executives in the study who fared best with this challenge had worked in multiple organizations but within the same industry. The percentages of industry veterans who managed priorities well (48%) outpaced those for CEO candidates who came from different industries (26%) or who stayed in the same organization (26%).
Although a majority of executives monitor information at a high level, that bird’s-eye view should not be a CEO’s habitual perspective (Kanter 2011). Among the executives in this study, those who came from different industries (48%) best zoomed in on specifics, with industry veterans (34%) outpacing CEO candidates who had stayed at one organization (18%).
With Korn Ferry’s findings in mind, companies can better recognize the talent they need: an external candidate who has spent time with multiple companies within the industry might be better at driving execution than one who has spent an entire career at the same company.