New Research Shows Benefits of Building a Cross-Sector Career

By James Daly

What makes a seasoned leader? Increasingly, it’s a career that spans the corporate, public, and nonprofit sectors, gleaning important lessons and perspectives from all three. Such a varied path not only broadens your professional seasoning, but can also lead to greater satisfaction.

That’s the finding of a new study by Paul Jansen and Nora Silver at UC Berkeley's Haas School of Business. Their research—the result of observing the career arc of more than 2,000 executives—showed that holding diverse roles across a wide variety of entities creates a strong foundation for managing the complex leadership challenges of modern organizations.

The report highlighted the work of many executives who led careers built not on a singular scramble to the top, but created a path that zig-zagged up the mountain, enjoying the view each step of the way.  Moreover, a number of the executives ended on top of a mountain that was entirely different than the one they targeted early in their careers.  

“A wide variety of experiences and organizations not only accelerates their careers, but often creates more satisfied people,” said Silver, an adjunct professor and faculty director of the Center for Social Sector Leadership.

A career "guided by curiosity"

Alberto Ibarquin, for example, is the former publisher of the Miami Herald who also serves on the board of PepsiCo and American Airlines. More recently, he was appointed CEO of the John S. and James L. Knight Foundation, a large nonprofit foundation designed to create engaged communities. Ibarquin said his career was guided by curiosity rather than strategic intent. “I never had a master plan,” he said. “I built on myself, thinking about what kind of activity this new role would engender, whether it would allow continuous engagement with the community, and whether it is an organization I might want to lead someday.”

Multisector experiences help build a wide professional network which “helped to create a flow of very interesting opportunities,” Ibarquin said. Exposure to a wide range of leaders and problems is becoming an essential executive skill, he noted.

Experience in varying sectors also creates more internal satisfaction. Roger Ferguson was an attorney and business consultant who later became vice chairman of the Board of Governors of the Federal Reserve System, and headed the insurance company Swiss Re. 

Most recently, he became CEO of the Teachers Insurance and Annuity Association (TIAA), the leading provider of financial services in the academic, research, medical, cultural, and government fields.

Such a wide range of experience “has been transformational for me,” Ferguson said. “It helped create a breadth of perspective and a network that differentiated me from other financial leaders and serves me well in my current role.” 

Evolving careers

In researching the report, the authors accessed a variety of sources. They started with the Leadership Directories database, examining the careers of Fortune 200 company CEOs and management team members, as well as a random sample of 300 elected and appointed public sector officials (from federal to state), top nonprofit sector 100 foundation presidents, and top 100 nonprofit executive directors. Information was supplemented by public materials, including online research and bios on company websites.

The data revealed that about half of the leaders had some cross-sector experience.  Subsequent interviews showed many larger firms—like Cisco, Goldman Sachs and Bank of America—actively encourage cross-sector experience as they groom future leaders, suggesting not only that the avenues for leadership development are broadening, but that the nature of careers themselves are evolving.  Being able to see through the eyes of others leads to more informed and empathic leaders, Silver said.  

"Small sacrifices"

But there may be downsides. The number one constraint cited by leaders was time. A cross-sector career may also not allow the deep technical and professional understanding of an organization that the singular devotion to a field or company provides. And those who’ve grown accustomed to the sometime lucrative salaries in the private sector salaries may be discouraged by the comparatively skimpy compensation packages from a nonprofit organization.

But those may be small sacrifices. “There is no longer a stable career marketplace,” Silver said. “To have a great career you sometimes need to get out of your comfort zone and tap into the opportunities you only ever see by having a diverse network.”

Read the full report