Raw Talent Can Outweigh Industry Experience

Fiat used to be the laughingstock of the automobile industry.  The Italian company was defined by employee strikes, staggering financial losses and flopped car launches.  Fiat had gone through four CEOs in the three years leading up to 2004.  That is when Sergio Marchionne took the wheel (pun intended).  Thanks mostly to Sergio’s leadership, Fiat has been operating solidly in the black and now sets the industry standard for time to bring a new model to market.  In short Sergio Marchionne resuscitated a dead company and made it a class leader.  Amazingly, Sergio came to Fiat with no prior experience in the auto industry and was practically a foreigner since he left Italy in 1966.

While many companies place a big emphasis on industry experience when recruiting employees, they may be better served looking for the character traits that underlie progress and success.  Sergio Marchionne was able to achieve what he did because at his core he is an exceptional leader:  he sees the talent locked within others, he allows others to take initiative, he sets ambitious goals, he holds people accountable and he questions the norm.  These virtues are instinctive and not a product of industry experience.

I have heard many entrepreneurs say that if they knew just how challenging it would be to start their respective business, they would have highly considered jumping ship at the beginning.  To a certain degree ignorance is bliss.  Dreamers achieve things because they don’t know that they can’t.

Experience is important for many obvious reasons.  However, it can also restrict people to continue thinking within the box.  It can stifle people by making it comfortable to simply accept the norm rather than challenge it.  For example, the past year my VC firm has been looking at a company that will serve car rental agencies.  This startup’s COO was the former VP of Hertz Global who was in charge of worldwide fleet operations.  Last year we asked the company to go out and land a contract with Hertz, but they never even attempted it because the COO said Hertz would not do business with such a young company.  Therefore, we kindly told the startup we were not willing to make an investment yet.  The startup subsequently replaced that COO and proactively reached out to Hertz.  Last month Hertz signed a one-year exclusive contract with the company.

Now imagine you were in charge of recruiting for an auto company and you were looking at the resumes of Sergio Marchionne and that former VP of Hertz Global.  You would not get fired for going with the guy that has auto industry experience.  But you also wouldn’t get the kind of success that Sergio Marchionne has brought to Fiat.  Be sure to look at the big picture and not be myopic about industry experience.

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