Following “So you want to be a CEO… or do you?” in our autumn 2009 issue, we examine the career options for CPOs who have decided to step off the corporate merry-go-round
Those who have made it on to an operating board soon realise that being a high-profile player is risky.
Job security is highly dependent on the performance of the chief executive, and if business performance is poor, the chairman and/or shareholders may well replace them. “A new broom sweeps clean” as the saying goes – the appointment of a new CEO often results in a complete change of leadership team as they bring in their own people. It is not surprising, then, that some CPOs who have been through this cycle opt to get out of the corporate rat race.
The question is, what next? What are some of the alternative career options for those looking to get off the corporate merry-go-round? And what do those who have made the transition say?
Planning ahead
The options open to those interested in considering a career beyond the classic corporate role are broad and varied. Some people focus purely on one area, for example a role in private equity; others combine more than one option to develop what is often termed a “portfolio career”. The key issue is to determine what is going to be right for you: “Take advice from those who have already trodden the path, and network, network, network!” Think about the type of work you’d like to do and think honestly about your own strengths and weaknesses. And if you are planning to strike out on your own, take adequate professional advice in the areas of funding, legislation and tax from bank managers, lawyers and accountants; you need to be solvent and legal.
Option 1 | Consultancy/interim management
It is likely that consultancy work or interim management will require you to set up on your own. The upside for taking the risk is the freedom to operate and that the rewards can be high, both financially and intellectually. Going solo can be daunting, not least because many new ventures fail. That is why it is so crucial to identify early what your unique selling points, or USPs, are.
Consultants and interim managers who succeed create value and carve out a niche for themselves. Clients normally engage consultants to gain access to a deeper level of expertise than may be feasible to retain in-house, giving them flexibility to switch the resource on and off. Interim managers tend to be more associated with hands-on delivery than the analytical or advisory element of consulting. Peter Smith set up his own business, Procurement Excellence, having previously led procurement at Natwest Bank. “Setting up your own business means being prepared to take the risk that you don’t make any money,” he says.
“Think seriously about whether to do it if you have young children and a large mortgage… unless you are a genius. “You have to be prepared to do the boring admin, manage without the PA, the HR department, the IT helpdesk and so on. And don’t fall for the notion that you can have holidays whenever you want, play golf on Fridays… it is more commitment than working for a big firm. You can’t just let clients down. When you aren’t working on client projects, you are probably working harder to get the next project!’
Would he give it up though? Unlikely, given the freedom it provides and the intellectual stimulation of working with different projects and clients. But beware – in consulting you have to do a lot of selling to build your pipeline. Smith says: “Selling is fundamentally tougher than buying. Can you cope with rejection and being treated in an ignorant fashion by some proportion of procurement people who now see you as just another salesman they don’t want to speak to? You also need to be flexible – be prepared to work at CPO level or even CFO/CEO level one day, then help a buyer to write a pre-qualification questionnaire the next. I regularly make that switch.”
Option 2 | Executive or life coaching
Meryl Bushell left her role as CPO of BT in order to become an executive coach and non-executive director. Typically, coaches have had varied and successful careers and bring a wide range of career and life skills to help others.
Those who pursue coaching typically do so because they have great people skills and an innate desire to help others develop and realise their full potential. Bushell’s advice to others considering this path is: “Get properly trained, even if you think you have done lots of coaching and mentoring in the past.
Be picky about who you train with; there are many charlatans in this field.” She goes on to say that it is critical to define the particular market that you want to operate in: “The executive coaching market is crowded so you have to define your USP.”
Option 3 | Training
While there are similarities between coaching and training, the latter usually involves the transfer of specific skills, knowledge and/or competence.
Trainers tend to be highly people-oriented, but also possess the intellectual capacity and curiosity to further develop thinking in a specialist area.
Andrea Reynolds co-founded Cordie in 2003 as a provider of purchasing negotiation training services, having previously worked as a senior procurement director at Barclays Bank and Newsquest Media. As co-author of the CIPS Purchasing Models Handbook, both she and her business have a very clear USP.
Reynolds’ advice to others is: “Be passionate about what you do. Recognise timewasters – your time is your most important asset. And don’t forget your roots. Having an understanding of the buyer’s perspective is invaluable.”
Option 4 | Non-executive director
The role of non-executive director has never been so high profile. With a seat on the board as an outside director, the non-exec acts in an advisory capacity; they are not involved in the day-to-day running of the business, but areresponsible for corporate governance, monitoring of management and contributing to strategy.
Bushell is a non-executive director for James Latham, an importer and distributor of wood-based sheet materials, and Supplierforce, a supply management technology and services company. She advises: “Make sure you understand the role of a non-executive director and the legal responsibilities you will take on. Do your due diligence.” Individuals wishing to take on a non-exec role need to demonstrate a broad understanding of business issues, having worked at least at operating committee level during an executive career. Ideally, they will have had some exposure to finance.
Smith is a non-executive director of Remploy, which supports disabled people and those who face complex barriers to work, and is a commissioner (in effect, a senior adviser) to the Legal Services Commission. “What I found challenging was achieving the right balance: contributing in my specialist area without getting so involved that I became a ‘shadow’ procurement director,” he says. “It was also a
challenge at first to have the confidence to contribute to the debate across broader business areas when I felt I could add something, without being arrogant enough to think I was an expert in finance, HR, asylum or immigration law, and so on.”
Option 5 | ‘Portfolio career’
A portfolio career is about combining a range of options. You may prefer to work on a part-time or flexible basis. The roles could be complementary, for example combining consultancy with a non-executive directorship, or may involve unrelated activities such as combining consultancy with a more philanthropic desire to give something back – perhaps setting aside time to work pro bono (without financial reward) for a charity. Following a portfolio career can provide you with more interest than a single job and can offer greater flexibility, which may be helpful if you need to balance work and family life. A portfolio career also has the potential to be lucrative, provided that it is well managed.
Option 6 | Working in private equity backed businesses
Private equity (PE)-backed businesses are not publicly traded and are typically funded by a range of institutional investors such as banks, insurance companies and hedge funds. PE firms require people for their portfolio companies who are prepared to work hard and full-time in return for a high upside when the business is sold on in, say, three or four years’ time. PE firms usually have a clear exit plan and tend to overrecruit the senior jobs so the executive management hits the ground running.
These are lean, fast-paced environments where you are expected to deliver, as much as through other people, in order to develop an asset for trade sale or flotation. To succeed in the PE world you will need a great sense of urgency, an ability to deliver without huge resources and may be expected to both drop base salary and buy equity to join, with the expectation of a high financial return on exit.
One purchasing chief who made this move is Bob Kickham, who was previously CPO for drinks maker Diageo. He joined private equity company Nordic Capital (NC) three years ago, initially working for Luvata, a copper producer in its portfolio, with a brief to drive change and take cost out, working as part of the leadership team. On the back of what he has delivered, his role has expanded significantly. He is now involved in merger and acquisition strategy, has taken on a non-executive director role in another of the portfolio companies and also has a NC-wide brief to drive procurement excellence for indirects in the 22 portfolio companies.
In return for working incredibly hard, he enjoys working for a business without the “big company politics” or the glare of public reporting. “The PE environment is ideally suited to procurement because you have fully engaged owners,” he says. “Owners and executive teams are fully aligned to the same goals and are motivated by the same rewardmechanisms. You have a low level of politics and, conversely, highly capable colleagues. PE owners tend to over-recruit for the role and then add to the role to match performance.”
Careful planning for any transition is important. CPOs looking to make a change from corporate life must take the time to assess what drives them in order to take their career in a different direction. A move into private equity results in a very different lifestyle to pursuing a portfolio career so adequate due diligence before stepping off the corporate ladder is key.
CHECKLIST
THINGS TO THINK ABOUT SERIOUSLY WHEN LOOKING AT ALTERNATIVE CAREER OPTIONS
● Consult widely and seek advice from those who have already trodden the path.
● Understand what is your primary driver and what really matters to you. Is it wealth creation or doing good? Or a combination of factors?
● Be honest. Assess the level of risk, time and money you are prepared to invest. If you’re exploring private equity as a career path, are you prepared to get your hands dirty? You will be expected to work hard, deliver fast and do it under pressure on lean resources.
● Take professional advice from an accountant, a bank manager and a lawyer about business start-ups to understand tax, funding and legal implications.
● In a start-up, expect to work twice as hard initially as you did in your corporate job. Recognise there may be impacts on family life as a result.
● Assess what sets you apart; what is your unique selling point or USP?
● Ask yourself “am I prepared to sell”? Because you will have to if you go it alone
● Recognise timewasters – because your time is your most important asset.
● Strengthen your contact base – and network, network, network!
