Changing careers at mid-life is an option for more and more executives. Some choose early retirement, others are nudged towards the door, and others decide that doing something that they love is more meaningful and they can afford to get off the corporate track.
A portfolio career is a tailor-made cluster of activities/roles related to a former exec’s interests and motivations which together make up a ‘career’ following a full-time career role. Increasingly, executives approaching the end of their corporate career will start to build their portfolio with their first non-executive director (NED) experience, often on the board of a charity.
Becoming a NED is often considered the next logical professional step after an executive role. NEDs gain new skills, enlarge their networks and better understand other industries. But the competition is tough and it can be difficult to land that first NED position.
When putting together a portfolio, former executives typically ask themselves, “What do I want to do in the commercial world? In the world of NGOs or charities? And what do I want to do that reflects an interest that says who I am?” One example of someone wanting to reflect his own interests is a client starting out on his portfolio career who told me, “I’m really interested in the waterways of Great Britain.” Through nurturing this interest and networking, he is now a NED on the board of a British port authority.
NEDs continue to make a positive contribution, maintain business travel and enhance paid consultancy. Retirement at 50 or 60 from a first career between 50 and 60 means a possible 20 active years ahead of executives. By serving as a NED, they can be on top of their expertise and stay current with the latest trends.
Some become NEDs before they leave the corporate world as a way to develop within an executive track. As a board member for another organisation, they learn how to influence rather than how to manage. In some instances, working on a board helps prepare people for a more senior executive role. In terms of cross-fertilization of experience and knowledge, becoming a NED is not only beneficial for the individual directors but for their own firms as well as it enhances learning and brings novel approaches back to the business.
Risk vs remuneration
Yet portfolio careerists aren’t paid the same salaries as executives. So passion about the organisation’s goals is fundamental. NEDs who work in conjunction with their executive roles need to do the prep work for the boards in their own time. If they aren’t passionate, serving on a board will be cumbersome.
The reputational risk of joining the wrong board can be huge. You can decimate an executive career just by sitting on the wrong board as a NED. The recent collapse of Carillion is an example of how board members who have had fantastic executive careers will struggle to gain another NED role because this business is seen to have collapsed under questionable circumstances.
Transitioning from an executive role to a non-executive one is a completely different skillset and mindset. It’s best to understand international corporate governance and what good board behaviour looks like before choosing the board you want to serve on. You can’t just say that you’d like to be a director, you must have passion for the work and clarity about the organisation you hope to join.
What a board needs
Boards in the United Kingdom perform a skills matrix, looking at what a board needs to support the strategy of the organisation. For example, a board may need a NED who has HR skills to chair the remuneration committee. The matrix not only looks at the skills a board needs to be effective; it can also address diversity issues – gender diversity, racial diversity and also diversity of thought.
In an article I wrote in 2013, I quoted a bank executive as saying, “Gender will not be an issue in 15 years’ time.” Certainly in the U.K., from a non-executive perspective, we’re getting better. In the Nordic countries, where they have quotas, they’ve already done it. We still do not have a sufficient pool of executive women coming through, which means the pipeline for NED roles will dry up at some stage.
Sometime in the next four years, I believe we will hit a crisis if we’re not careful. Most women currently on boards are “overboarded” – they’re sitting on too many boards – and there is a dearth of talent coming through. The Hampton-Alexander Review has called for women to be 33 percent of executive committees by 2020. In order to achieve that in the next three years, 40 percent of every appointment onto an executive committee has to be a female. There are good women available for these positions, but firms need to ensure their organisational culture is such that women want to join. Creating that working environment, one that isn’t biased in favour of men, is necessary if gender balance is a priority in the boardroom.
In the past, women were less likely to effectively chart their career paths, instead they were more likely to “see what turns up” but now there is a definite shift towards “how do I chart my way through this maze?” This shift is creating a more focused approach to the needs of women within an organisational environment.
To find your first NED role, once you know you are “board ready”, you need a combination of networking with a purpose, absolute clarity about the board you would add best value to, and then look at who might be rotating off the board.
Ten strategic networking tips
How to network with a purpose:
1. Build your networking muscle.
Practice networking at different networking events. To overcome nerves and build your confidence, especially if you are someone who doesn’t like networking, focus on the other person not on yourself.
With a well-defined portfolio career it’s best to concentrate on networking events in that sector. For example, if you are interested in art, network at gallery openings or charitable events may help you along the way towards becoming a NED of an arts charity.
2. Develop a thick skin.
Hearing the word “no”, over and over again builds character and makes you tenacious about your business. Surprisingly many executives have yet to learn this resilience. Some key elements of resilience are emotional and impulse control, causal analysis, self-confidence and realistic optimism.
3. Be nice to everyone you meet.
Remember the old saying “be nice to the people on your way up because you’ll meet them on your way down.” The world is getting smaller and smaller. Don’t burn any bridges and be genuinely nice to everyone.
4. Be giving.
Give your time, your advice and especially your referrals. Stephen Covey, author of The 7 Habits of Highly Effective People, advocated a strategy of you reap what you sow. He added an 8th habit in his last book, inspired by the philosophy: “Find your voice and inspire others to find theirs.”
5. Grow your relationship database.
I believe you are only four or five people away from anything you ever want or need. All you have to do is ask. This is an extension of personal trust between people, being trustworthy creates significant personal relationships and strong bonds.
LinkedIn is often considered to be the professional relationship database. It is an efficient way to stay in contact with people, to refresh contacts and find people. But a vast LinkedIn network is hardly effective. Some of the best and most effective networkers I know have a small but wonderfully bonded and trusted network.
Maintain regular and consistent contact, especially face-to-face contact, with the people in your “database”. If you are unable to meet in person, then a phone call or personal note works well too. Maintain your profile on various social networks, but try to steer clear of canned emails.
7. Keep it simple.
Look at where you are spending your time and energy. What generates the best results? Continue to do those activities. Stop time- and/or money-wasting activities.
Stop overcomplicating and becoming paralysed into inactivity. Create smaller, simpler goals and fulfil them. Small goals can still be ambitious. When I coach senior leaders, we need to strip away their 28 goals (or another large unattainable number) for the year and focus on the three most important things that need to be achieved to create success.
8. Build rapport.
Are you a people magnet or a people repellent? Others should see you as a positive, warm and friendly person.
9. Set goals.
When you have a clear vision of where you are going, the rest falls into place. You need to be clear about what you want over the short-, medium- and long-term in every area of your life.
Achievable goals are a building block to something bigger. New CEOs often get ‘trapped’ in their offices as they pull many levers, start too many initiatives so they forget to get out of the office and talk to employees and key customers.
10. Access available resources.
Build a strong support team which includes family, friends and colleagues. Join networking groups. Get connected and stay connected.
Helen Pitcher OBE (IDP-C) is the chair of Advance Boardroom Excellence, which works with board effectiveness, board evaluation reviews and coaching chairs, CEOs and NEDs.
This article is republished courtesy of http://knowledge.insead.edu. Copyright INSEAD 2017.
Frontpage December 4, 2017