How Important Is Industry Experience for a New CEO?
After its data-breach debacle, Target chose a new CEO from outside the retail industry. Associations often face a similar question: Does industry experience trump association management experience?
Is an association better served by a chief executive who comes from the industry with little experience running an association or one who knows how to lead an association but has some catching up to do on the industry?
Editor’s Note: This story has been revised to correct an earlier version that cited Brian Cornell, Target’s incoming chief executive, as an example of an “outsider” CEO. Although Target hired Cornell from outside the company—he joins Target from PepsiCo—he is a former CEO of retailers Sam’s Club and Michaels Stores, Inc. Associations Now regrets the error.
It’s a conversation that you’ll find a lot of association staff, leaders, and consultants having: When recruiting a new CEO, do you hire someone who understands your industry but may not have the best skill set for managing an association, or someone who might not know the industry well but who has deep experience in association management?
Burger King went the latter route when it hired 33-year-old Daniel Schwartz last year. Schwartz, a former Wall Street employee who had no restaurant-industry experience prior to becoming the CEO of the fast-food chain, is credited with helping the company turn around its fortunes quickly.
Donna Dunn, a senior consultant at Tecker International and former association CEO, has been in Schwartz’s “outsider” shoes more than once. She recently spoke with Associations Now about the “significant advantages” of hiring someone from the outside:
What does someone who’s considered an “industry outsider” bring to the table?
Dunn: I think it’s always great for an organization to get a different perspective. In my experience, someone who isn’t actively involved may have an ability to see things that might not otherwise be seen by someone who has been raised in the industry. It’s a neat opportunity that presents a lot of challenges.
What are some of those challenges?
The biggest one for the association professional is getting acclimated to the culture of the new organization and industry. You have to work incredibly hard to become “one of us.” Especially when you come into an organization where there’s never been an association professional in there before, and the board tasks you with cleaning up a big mess left by the prior executive. Wholesale changes like that can be hard on a staff, but if you can become well versed enough in the industry and the culture of the organization, people will come to respect you and what you bring to the table.
Also, there can be a little bit of “be careful what you wish for” on the part of the board when you get hired and they say, “We want you to fix this,” and the scope of the fix is bigger than they anticipated. That’s incumbent on the exec coming in to build that rapport with the board very strongly. Change is hard, and change is not comfortable, and if the board has said that they want change but haven’t really embraced change, then the situation will be challenging.
Any tips for quickly learning the ins and outs of a new industry?
The business stuff is the easiest piece to learn. Especially if you have a small enough board, go visit every board member and learn about their place of business and about the day in the life of their profession. They’re not your average member, but they’re the folks who you need to build that rapport with and who you anticipate would take the time to really help you learn what the industry is all about and what the issues are.
The sooner you can get out and visit people, make phone calls, take some time and really engage in learning about the work and the nature of your organization and the members, the better off you’ll be. It makes a great impression on the folks you’re working with, but it also helps you have casual conversations around what their interests are.