Want to Be a CHRO? Stay on the Move

When Lockheed Martin Corp. went looking for a new vice president of human resources five years ago, many might have suspected the aerospace firm would target an up-and-coming executive in the field from Boeing Co. or Northrop Grumman Corp.

After all, all three companies are in the same industry. Being the top HR chief in one company must be applicable to the next, given the similarity in subject matter.

Instead, Lockheed recruited John Lucas, the head of human resources for Microsoft Corp.

“At the time, the aerospace and defense industry was largely insular,” Lucas said. “I think they wanted someone with broader experience who could bring new ideas to the organization.”

While most major executive moves are concentrated in specific industries and fields — take technology companies’ penchant to poach outside executives with engineering or programming backgrounds, or retail leaders jumping from brand to brand — human resources is one of the few transient business focuses.

A top HR leader might make his or her mark in consumer products for a few years before moving into a new role in financial services. Then, a few years after that might come a move to an HR position with a manufacturing company.

Of course, jumping industries requires flexibility and a willingness to take risks. But to Kim Shanahan, managing director of recruitment firm Korn Ferry International’s human resources practice, it’s worth it for HR practitioners envisioning a career path that ends in the C-suite.

“We see it as very advantageous for HR executives to go into new industries,” she said. “Having a diverse background allows you to take best practices from one industry and apply them in another. And that’s what a lot of companies today are looking for.”

In the case of leaving Microsoft for Lockheed, Lucas said he saw many parallels between the two companies. Still, many on Lockheed’s management team had their doubts.

On his first day, Lucas was asked to address 200 managers. The first question: How could someone from Microsoft possibly understand the workforce needs of a company like Lockheed Martin? “It was a great question, and I’m glad they asked it,” he said.

In response, Lucas pointed out that both companies employ roughly 70,000 engineers and produce about 1 million lines of software code each month. Both are also among the largest U.S. government contractors.

“On the face, they are vastly different organizations,” Lucas said, “but underneath they have striking similarities. At the core of both companies are knowledge-based workers with similar missions — Microsoft wants to change the world and Lockheed Martin wants to protect and defend it.”

Cut From the Same Cloth
Because core HR skills are relatively transferable, it can be easier for talent professionals to jump from industry to industry. In many cases, Shanahan said companies will look past the fact that an HR candidate doesn’t have industry-specific experience, so long as his or her former industry dealt with similar talent management issues.

Pharmaceutical and financial services firms, for instance, both operate in highly regulated environments, with many of the same HR challenges. And while manufacturing and services industries have different business processes and products, they both deal with labor unions. “When it comes to talent management, industries with similar challenges tend to stick together,” Shanahan said.

Such cross-industry similarities have helped Jim Flanagan land many roles during his career as an HR professional. Flanagan, now the senior vice president and chief human resources officer at auto parts store chain Pep Boys, came to the company after a long and varied career that began with a practice as a labor lawyer.

“Early on, I discovered that litigation is tedious and boring,” he said. So when Flanagan was offered a job as director of HR at Starwood Hotels — at the time struggling with labor union issues — he jumped at the chance.

Later, Flanagan was recruited by coffee company Starbucks Corp. He eventually returned to Starwood in a newly formed role as senior HR leader for a customer relationship management initiative. That role gave Flanagan IT and e-commerce experience, which he later used to become executive vice president of HR at GSI Commerce, an e-commerce firm later acquired by eBay.

Each of those roles helped him land his current job. “When I came to Pep Boys, I didn’t have any experience in the auto industry, but I have service experience from Starwood and retail experience from Starbucks, and both are public companies, so it was a good fit,” he said. “The experiences were very transferable.”

To be sure, organizations will seek out HR experts with experience in a specific region of the world or those who have led companies on similar growth trajectories.

This was the case for Tony Fogel, senior vice president and chief human resources officer at global IT consulting firm Ciber Inc. Prior to Ciber, Fogel held HR roles in the food and beverage, financial services and health care industries. Ciber hired him in 2012 after a four-year stint at Kidron Corporate Advisors, a boutique investment bank specializing in cross-border emerging growth companies.

While the two industries differ, Fogel said his experience developing Kidron’s business in Europe and his background developing HR organizations at Marathon Asset Management made him an attractive candidate for the IT firm — a company with similar expansion goals.

In other cases, companies will seek out HR professionals from industries or companies known for HR best practices as a way to bolster their own talent management shortcomings, said Diane Youden, a partner in PricewaterhouseCoopers’ HR transformation group. “They want best practices from other industries that can be infused into their own processes,” she said.

As an example, Youden points to a trend for health care firms struggling with recruiting to seek HR professionals with retail experience, an industry known for successful recruiting strategies. In other instances, having a well-respected brand on a resume can make an HR candidate attractive no matter the industry.

Fogel benefited from that attitude early in his career when he left PepsiCo Inc. for a job at Morgan Stanley. His manager at the financial services firm told him it rarely hires from outside of the industry due to the specific demands that come with working on Wall Street. “They decided to speak with me because of Pepsi’s HR reputation,” Fogel said.

That experience taught him the value of working for a company with a reputation for top-notch talent management. “The best thing a young HR person can do is to try to get a position in a high-performing company,” Fogel said.

PwC’s Youden encourages HR professionals to consider a potential employer’s history with talent management to determine whether it will offer them the opportunity for growth and long-term career development. She classifies companies into three groups when it comes to their view of HR:

Executives view HR as a business driver. In these companies the C-suite understands the benefit HR brings to the table and is open to best practices from other industries.

HR leaders have the executive team’s ear. These companies have strong HR leaders who are able to educate executives about what the function can do to advance the business agenda.

HR holds no sway. These companies have neither executive support nor HR leaders to promote HR as a business driver.

“When you are making a decision, think about your career aspirations,” Youden said. “If you want to be a CHRO one day, you have to be thoughtful about the roles you take and your rationale for taking them.”

Culture Counts
Evaluating a company’s culture is also important. Even when two companies have similar industries or business goals, it doesn’t mean their corporate cultures will be alike. That can be the biggest challenge.

“The HR professionals who fail in new roles are the ones who don’t embrace the culture,” said Lockheed Martin’s Lucas. “You need to understand the cultural aspects of the company before you try to implement your own HR playbook.”

Transitioning talent executives should begin each job by working to learn employees’ issues and needs. Lucas, for example, spent his first month on the job visiting 12 facilities and talking to more than 3,000 employees, both in groups and one-on-one. “It was a whirlwind listening tour,” he said.

In all of these meetings, Lucas said he asked employees the same three questions: What aspects of the culture do they like best? What cultural issues do they think need to be addressed or abandoned? And what did they want Lucas to focus on as the new head of HR?

“Certain things like commitment to the core mission and love of cutting-edge technology came up constantly,” he said. He then used those conversations to prioritize his own goals for development and recruiting, and to figure out how to apply best practices from the tech sector to aerospace and defense.

Taking the time to learn the culture will make the transition easier, allowing employees to see that you care about their needs. HR professionals who demonstrate flexibility and a willingness to adapt are more likely to thrive no matter what industry they land in.

“Every leap comes with added complexities,” PwC’s Youden said. “You have to be able to show that you are ready to apply your existing knowledge in different ways if you want to be a success.”

Sarah Fister Gale is a freelance journalist from the Chicago area. She can be reached at editor@talentmgt.com.