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fourth
How to Zigzag
Your Way to the Top


Until 1998, Rob Egan's career was on a classic trajectory. A 1987 graduate of the J.L. Kellogg Graduate School of Management at Northwestern University, Mr. Egan had held management positions in marketing at Time-Warner Inc., the Procter & Gamble Co. and Kraft Foods Inc. and was on the fast track as director of international marketing at Grand Metropolitan PLC (now Diageo PLC). But when the opportunity arose to join the global executive search firm Horton International, he eagerly jumped.

"My corporate experience provided me with a solid foundation of analytical, communication and management skills," says Mr. Egan, who as a vice president at Horton, draws on his background to recruit executives and direct his firm's marketing. "But the switch to a new industry re-energized me as a professional."

Taking a Detour

Vertical careers -- beginning and ending in the same industry -- are the norm for the most managers. But as the careers of many high-profile executives show, a detour to another industry can be a shortcut to the top. There's never been a better time to advance your career through this "zigzag" method. Employers increasingly are reaching beyond their industry for professional talent. Consider the following factors.

Economic growth. The job market is the hottest in a generation. The national unemployment rate for professionals and managers is less than 2%. Additionally, companies that downsized a few years ago now are facing a shortage of promotable executives. While many organizations prefer leaders with industry experience, the scarcity of talent is forcing them to hire candidates with unorthodox backgrounds.

Deregulation. Employers in deregulating industries are hungry for managers who can navigate deregulation. Consider the resume of Leo Mullin, who had been vice president for strategic planning at Philadelphia-based Conrail Inc. during the railroad industry's deregulation in the 1970s. He switched to banking in 1991 when he joined American National Bank as chairman and CEO. He hopped to First Chicago NBD in 1993 as president and COO. In 1995, he became vice chairman of Chicago utility Unicom Corp. and in 1997 returned to transportation as president and CEO of Delta Airlines.

Service and manufacturing convergence. As manufacturers focus on higher margin businesses, leaders with marketing savvy can help position and promote new product/service mixes. The best managers often come from consumer-products companies, where marketing has become a science. Consider Lou Gerstner, who headed consumer-products maker RJR Nabisco Holdings Corp. and brought a new perspective to International Business Machines Corp., which is now focusing on service.

Re-engineering backlash. The message companies preached over the past decade -- down with lifetime employment, up with self-taught, portable skills -- has contributed to the erosion of employee loyalty. A 1998 study by Chicago-based Aon Consulting shows that more than half of American workers would leave their jobs for a pay raise of 20% or less. "Today's workers have become more mobile and assertive. They're saying, 'I have an offer somewhere else. It's not personal. It's business,' " says David Stum, president of Aon's Loyalty Institute.

Career advisers counsel ambitious managers to use their employers as steppingstones. John Humphrey, CEO of the Boston-based management consulting firm Forum Corp., says executives should work for companies where they can build "toolbox skills" to carry to their next job.

What It Takes

The skills in some fields lend themselves more easily to cross-industry transfers. For example, skills in marketing and finance, which directly affect the bottom line, can apply to any number of industries. Consider the former president of Boston Chicken (now Boston Market), Bruce Harreld. A marketer, Mr. Harreld positioned the firm as a quality fast-food restaurant chain. He joined IBM as chief strategist in 1995 and is credited with revitalizing IBM's market position.

Finance backgrounds transfer most readily to capital intensive organizations. Most airline, manufacturing and chemical companies have large finance departments headed by former chief financial officers.

Technology expertise is hot -- if you're not just a techie. Technology managers who demonstrate business savvy and understand how systems generate revenues can move into general management.

Communications, human-resources and other staff functions can move across industry lines. These transfers occur mainly at senior levels, where establishing or overhauling a process is more crucial than knowing industry specifics. For example, Sandra Allen, the former communications director of Commonwealth Edison, a Chicago-based utility, was recently hired by Associates Corp., a Dallas-based financial services firm, to head corporate communications.

Recruiters say ideal candidates for general management positions at mid-sized or large organizations have traversed several industries, demonstrating their talent in a variety of areas. Which candidates are snapped up fastest? "Those with three to four year stints in different functional areas and companies," says Chip McCreary, CEO of Dallas-based recruiting firm Austin-McGregor International. Those who have the most difficulty? "The ones who have served in one function or company for a long time," he says.

How to Start

As you weigh opportunities outside your current industry, consider the following strategies and advice.

Explore new industries through consulting. Alumni of major management consulting firms, such as Mr. Gerstner, fill the executive suites of corporate America. Trained to see the big picture, consultants gain visibility working with top management and build a track record of managing people, projects and budgets.

"If you're a staff executive with no prospects of ascending the hierarchy, consider a stint as a revenue generator in a consulting firm," says Jodi Holden, national staffing manager for the consulting division of New York-based KPMG Peat Marwick. "More than 90% of people we hired last year were mid-career switchers looking for a fast launch to the general management level."

Gain experience in a conventional corporate setting. There's no substitute for two to four years in a Fortune 500 or "most admired" company, say recruiters. Mr. Egan's experience at well-known employers opened doors to a number of opportunities. Similarly, a partner in a regional management consulting firm landed a position as the top marketing executive for a large Dallas-based bank because of a four-year stint at Citibank 12 years ago.

Target industries in which your function is a driver. In capital-intensive businesses, finance executives often rise to the top. In consumer-products companies, marketing is key. In a growing number of companies, technology is paramount. Build contacts at companies in which your expertise is a core skill and investigate headhunter inquiries or referrals.

Avoid companies where none of the top managers grew up in the industry. While outsiders can bring a fresh perspective, industry expertise is needed for stability and background. "Cross-industry transfers have to be confident enough to know an idea will work before they recommend it," says B. Merle Gilmore, a Wynnewood, Pa., consultant who has worked in the transportation, health-care and consumer-products industries. "Industry insiders have to validate whether a new idea is going to work in their unique setting."

Watch the clock. Move before your compensation or retirement plan creates an economic disincentive for leaving or you're typecast by your company or industry. "Generally, we recommend transplanting your talents if you've been with your organization more than four years without a promotion," says Mr. McCreary.

-- Sharon Voros is a consultant who writes about executive careers, compensation, benefits and other human-resource issues.


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