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Brave New World

Brave New World | Human Resource Executive Online Switching industries -- whether forced, as in the case of Wall Street casualties, or by choice -- can be rewarding for HR leaders, as long as they can quickly learn new businesses and cultures.

Wednesday, April 1, 2009
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In early September 2008, after fruitless attempts to woo potential buyers, the Tilt-A-Whirl that Lehman Brothers Holdings Inc. had become was spinning out of control. By mid-month, the ride was over, and the once idolized financial-securities firm had become a poster child for the financial meltdown caused, in large part, by radioactive mortgage-backed securities.

Thousands of Lehman workers were on the street, joining a growing army of other displaced Wall Street workers.

Rosemarie Franzo was among them. The vice president of New York-based Lehman's talent-management group, Franzo and her group of about 20 were laid off days before the company threw in the towel.

For 19 years, the Brooklyn resident has called HR her career of choice, and the financial-services industry was where she honed that career, first with the Goldman Sachs Group, then with Lehman. Born and raised in New York, she says she loves the city and the financial-services industry.

But now she's ready to toss it all aside to practice her career in another industry, even in another location, she says.

"With the current conditions? No, I don't have ties to the financial-services industry," says Franzo. "I actually have been doing research across different industries, just figuring out where I can apply my skill set within different companies."

While she's confident that her HR training and knowledge is broad enough that she can apply it to most industries, Franzo worries that she will be unable to quickly master the intricacies of another industry. What are the ins and outs that power an industry she's unaccustomed to? How quickly can she bring value to the company's bottom line? How does the culture differ, and how will she fit in?

She's right to feel some trepidation about ramping up in a different industry, but the prospect of switching industries for an HR executive is neither unthinkable nor unnatural.

On the contrary, the HR discipline may be more portable than some, allowing well-rounded executives the ability to leap over the fence toward greener pastures. Some companies even actively seek executives for their top HR slots precisely because they offer a fresh perspective to the culture.

That should provide some encouragement to Franzo, because right now, the financial-services industry isn't exactly flush with growth.

Granted, making such an all-encompassing change has its difficulties, but executive-placement experts say there are opportunities out there for seasoned HR executives, even if the competition for those jobs is greater, thanks to the untold numbers who have joined the ranks of the unemployed in this pallid economy.

In fact, says Terry Kassel, if you can make it in the financial-services industry, you can make it anywhere (apologies to Frank Sinatra).

Kassel should know. Before she was named chief operating officer and general counsel for Glocap Search LLC, an executive-search firm based in New York, Kassel served as the global head of HR for New York-based Merrill Lynch -- now a subsidiary of Bank of America -- and had a place on the board of directors for Merrill Lynch's Community Development Co.

She says she's been hearing from many former colleagues and friends at Merrill Lynch, Lehman, Goldman Sachs, UBS and Morgan Stanley -- "lots of people who have been downsized or have just left have called me because I'm in search." Regardless of the industry, she says, they're looking for work "because financial services is not hiring, and they need to eat. They're considering any place where they can get a job, whether in healthcare, pharmaceuticals, biotech ... ."

The good news, she says, is that they can hop between industries; the bad news is it's not quite as easy as flicking a switch.

Beyond "Lights-On"

In addition to overseeing payroll, benefit programs, recruiting, conflict resolution and other fundamentals that she refers to as "lights-on" systems, Kassel says, HR executives have to attend to creating success with people.

"If you think about what strategic HR professionals do, they make sure that the 'lights-on' works great, so that there's never any question about the credibility of the operation," she says. "But then, after all that's running smoothly from a strictly operational standpoint, you have to develop the skill set that actually [creates] a position of trust with the people running the division or with the company."

Kassel suggests that anyone who picks up the mantle in a different industry needs to evaluate what's already in place -- compensation, coaching, talent evaluation and other basic processes. Study what works and what doesn't, and understand how each system fits within the company's culture.

"You have to hang out in that environment for a period of time, so you're not a foreign body that they want to reject," she says. "Then, once you've integrated and you've been able to get the senior people's ears and get their trust, you have an enormous platform to understand their culture, and to make a difference."

To climb onto that platform, though, you've got to expand your horizons to become proficient beyond one or two specialties, says Kevin Cashman of Korn/Ferry International.

The senior partner of leadership and talent consulting based in the executive search firm's Minneapolis office, Cashman says HR executives don't always stretch their wings in their profession, even when their career takes them to new heights.

"If [you're] really a technical specialist, who's never really transcended a comp and benefits background, even though [you've] been head of HR," he says, "it's going to be hard to make the case that you can make the move, because maybe you can't."

The executives who will have an easier time switching industries, he says, are those who have tried to develop their roles as strategic business partners, stretching to find ways to bring value to the business. "Those are functional and transferrable skills," he says.

Unlike some careers, such as marketing in consumer products or operations in manufactured goods, Cashman says, the HR discipline adapts easily to a variety of industries because it doesn't become bound to the industry itself, and its practice can be applied across a wide swath of trades.

"Let's say a company wants to make a culture shift, and the [HR executive comes] from a high-tech, Silicon Valley culture that has a certain progressive culture," he says. "That might be transferrable.

"You have to look at not just what things [you've] learned in the industry," says Cashman, "but what things [you've] learned in the industry that might be of strategic value to another industry."

HR "Cross-Pollination"

John Challenger, CEO of the Chicago-based outplacement firm Challenger, Gray & Christmas, estimates that 35 percent to 40 percent of HR professionals change industries in their search for new opportunities. He recommends that everyone be open to different industries in their search for new opportunities.

"It's important for HR professionals to realize that their candidacy is fundamentally about their HR skills," he says. Those skills -- compensation and benefits, talent management, recruiting, HRIS -- are all transferable to other industries, he says. And while some companies do prefer to promote from within, Challenger thinks those instances are the exceptions to the rule.

"Companies are very open to bringing in people from other industries who can cross-pollinate and help them see their HR systems in a new light," he says. "Someone who comes in from another industry often brings new practices, new ways of thinking about the same types of problems or issues."

Dennis Zeleny says the executive who brings intelligence and solid general experience typically offers the greatest potential to an organization.

The recently appointed senior vice president and CHRO for Philadelphia-based Sunoco Inc., Zeleny has traversed a variety of industries -- as head of HR for PepsiCo, Honeywell and DuPont; and as executive vice president of administration and services for Caremark RX, before its 2006 acquisition by CVS. In each instance, Zeleny says, he learned, listened and stretched to serve his customers. By doing so, he also stretched his own capabilities, and helped others to stretch, as well.

"I've had 1,000-person HR organizations working for me around the world," he says. "When I look for somebody, sometimes [I find] you need somebody with specific industrial experience that you're operating in, but more often than not, you're really looking at the person and [his or her] capabilities."

Fran Luisi, principal of Charleston Partners, a Rumson, N.J.-based retained search firm, says executives who transfer their HR skills to a variety of industries increase their own marketability, "especially during uncertain economic times."

While some of Luisi's clients are searching for HR executives exclusively from their own particular industries, he says, most organizations that contact him are interested in the best candidate who can inject new blood and shake a few branches.

"It happens quite a bit," he says. "Part of the value of being an HR executive is that every industry and every organization [needs a good one]."

But just because that new corner office looks so attractive and you're anxious to dig in and make a difference, that doesn't mean you won't spin your wheels trying. Luisi says the "evolution of the human resource discipline" is a real factor for any HR executive, regardless of whether they're switching industries. Not all companies, he says, evolve the function at the same speed, or with the dedication you feel it deserves.

Cultural Fit

Even if a new opportunity seems like an ideal match, determining the cultural fit is just as essential as gaining an understanding of the business values, Challenger says.

"There's always a period after new people come in when they have to ramp up and understand the politics, the company's culture and the real issues," he says. "You may feel a steep learning curve, in terms of the company, its products and what makes the environment unique. You may feel that you need to learn the language of that company."

Challenger recommends total immersion in the company, similar to a good language course. Find people you can trust throughout the company, not only on your staff.

"You're looking for people you bond with," he says. "At the same time, you're looking for competencies." Locate those who are politically astute, or who can talk with you about the history of the company.

"Find someone you're emotionally in tune with, so you can talk about what's going on," he says.

Zeleny says part of the trick to making a smooth cultural transition -- which he's learned through experience -- is to gain a global viewpoint of all the programs in place in the organization before deciding what's working and what isn't.

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"Let's say an HR person is supporting the CFO," he says. "[The company] may have a robust M.B.A. program, where they're recruiting from the top 10 schools in the country, and that might be great." On the other hand, he says, other departments may go wanting for high-quality candidates. "I don't judge the HR person by that alone. I try to understand it -- what's going on with their clients and how they're supporting them."

Scott Rosen, president and CEO of The Rosen Group, a Voorhees, N.J.-based HR executive recruiting agency, stresses that the first three months after an executive walks through the door should be spent listening more than talking.

"Certainly, understand the business model that you're working for, but understand the players and what their buttons are," says Rosen. "Building relationships is really key in those first three months."

That doesn't mean you should keep your head low and your mouth shut, says Rosen.

"If you come on too hard, they might get turned off by that. But, if you come off too laid back ... you know, it's a balance," he says. "You've got to make sure you're fitting in with other personalities."

Finding a cultural fit can be easier said than done, says David Rodriguez, executive vice president of HR for Bethesda, Md.-based Marriott International.

Rodriguez could be considered an HR professional in the truest sense; if he had to choose between the challenge of a career in the human resource discipline or a career as a company man in a single industry, he says he'd pick HR every time.

For Rodriguez, who worked for cosmetics titan Avon Products for four years, then spent nearly 10 years with financial services giant Citigroup (then Citicorp), both based in New York, the change in cultures couldn't have been more drastic when he arrived at Marriott.

"[Citicorp] was more confrontational in style," he says. "Marriott is much more civil. There's a lot of attention given to building and maintaining long-term relationships, and I think people keep that in mind and it governs their relationships."

The cultural distinctions between the two organizations couldn't have been more obvious for Rodriguez. He likens the style of management culture at Citibank to a bus driver exhorting customers to get on board. Not so at Marriott, he says, where building relationships and gentle persuasion are the rule of thumb.

"If you tried the [Citicorp] approach here, you would be driving an empty bus, and even if you were successful the first time around, on the next project, no one would show up at the bus stop."

Rodriguez doesn't hesitate to recommend that HR professionals should broaden their exposure to various industries, in the same way an artist might advise art students to expand their palettes of colors and styles.

But along with his advice, he offers both a reassurance and a caution.

The reassurance? Don't fret too much about gaining traction quickly enough in the business aspects of a different industry.

"If you are in a senior role in HR, and if you've been relatively successful," he says, "you've obviously shown the ability to understand commerce and get underneath numbers. You'll learn the business."

He estimates that inside of a year, he understood the business fundamentals driving each of the Marriott brands, as well as the consumer strategies behind each brand.

The caution? Cultural assimilation, what he calls "the soft aspect," is the quicksand that can take you down. Stay attuned not only to the needs of your customers, but also to subtle differences in operations, he says.

For example, he adds, "you could have one organization that puts a high premium on written communications." No one meets without a dossier of e-mails, memos, presentations and handouts. "They want everything documented."

On the other hand, some companies prefer a more spontaneous, verbal approach to communication. "So you'll come to the meeting prepared with your documents, of course," he says, "but you're also prepared for the discussion."

As obvious as those distinctions may sound, Rodriguez says they can easily be overlooked by a transitioning executive.

Stay flexible, says Rodriguez, both in your HR discipline, and in your cultural perceptions.

"The longer you're in one company," he says, "the harder it can be to move to a company that might be very different."

Improve, Don't Impose

The preconceived notion that what worked for one employer can transfer into your new company in a different industry can be a real stake in the heart if you want to fit in. Imposing previous values does nothing to improve a business.

Zeleny says there's no such thing as what he terms "plug-in HR," and he advises anyone against trying to superimpose a program from a previous industry.

"I've seen a lot of people come from highly respected places where they practice good HR, but they go across the street or across industries, and they expect to plug it in," he says.

"You can't plug it in. The compensation theory, the compensation realities and marketplace in the financial sector, for example, are very different than in the high-tech sector, or the retail sector."

Zeleny agrees that the best way to learn an industry quickly and fit in is to seek everyone's opinion about the direction the business is going in and the direction in which it needs to go.

"You go in and get what your boss wants and has as his priorities; whether you're reporting to the chairman, the CFO or the plant manager, it doesn't really matter," he says. "It's always about what's the right thing to do for the business. I think some people have it, and some people don't, but that's the key to success."

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