What Companies Should Consider When Hiring for Corporate Role
When appointing corporate centre executives, many large firms focus on the candidate’s proven managerial track record in the firms’ business lines. Although such experience can be a valuable asset for corporate centre executives, it can also be a bothersome liability. The authors discuss three traps commonly faced by corporate centre executives with extensive business-line experience, and suggest ways to avoid them.
In today’s large firms a proven managerial track record in one or more of the firm’s business lines has become an indispensable prerequisite – at least for those wishing to make it onto the short list for a corporate executive role.Business-line experience, which we define as general managerial experience gained from having managed a market, region, or operations in one of the firm’s core businesses, often seems even more important than the specialist skills a corporate role might require. An executive searcher highlighted this general trend, stating: “Business or industry experience in a candidate’s track record is absolutely vital. If I have a candidate without extensive business-line experience, most of my clients are unwilling to even consider that candidate. A wide range of arguments is needed in order to convince them to consider such candidates, who often have a favorable track record in terms of the required skills.”
The grounds for this trend are obvious: by moving managers with business-line experience into corporate roles, many firms are responding to the market pressure to incorporate more value-added thinking into their headquarters’ operations. As corporate centres are frequently criticised for being too bureaucratic and specialised, companies assume that candidates with a managerial business-line background are best equipped to provide the expected business- and customer-orientation in a corporate centre role.
Is this assumption correct? Empirical evidence suggests rather the opposite: in fact, many multidivisional firms report that exploiting their cross-business synergy potential to a full extent is still one of their most intriguing challenges. This is reason enough for us to ask: is prior business-line experience a good preparation to meet the enduring challenge that corporate centre executives face – the need to create added value for the business-line organisation?