The industry hoppers come of age

THE announcement that George Simpson, chief executive of motor parts maker Lucas, was to take over from Lord Weinstock at the head of the defence company GEC raised some eyebrows in the City last week. Mr Simpson had done a good job in the humdrum motor parts business, but could he make the grade in the infinitely more political, higher-tech and faster- moving world of arms making and dealing?

Mr Simpson's move is the latest in a series of hops by executives across sector boundaries. While most of these are successful, there is the potential for disaster if the new boss misreads the industry or takes too long to get up to speed.

Sir Brian Pearse, Mr Simpson's current non-executive chairman at Lucas, is himself a jumper, coming from Midland Bank. Outsiders have the advantage of not bearing the industry's accumulated baggage, he says. But there are risks attached to such dramatic career changes. Top jobs are not all interchangeable. "We already had a chief executive steeped in the industry," he said. "In some industries I could have held my end up. But I don't think I could have come here and done his job. The issue is credibility. In motor manufacturing it would have been a struggle to persuade people, both internally and externally, that you were any good. If you made a couple of mistakes it would be a big problem."

Mr Simpson's move to GEC may prove to be one inter-industry hop that works. Auto making and defence are similar businesses, with intertwined roots. Among other things, Lucas makes gear boxes for helicopters and fins for the Patriot missile used to knock down Iraqi Scuds in the Gulf War.

Miles Broadbent, one of the City's top headhunters, says his new firm, the Miles Partnership, makes a point of matching his clients' past experience to the demands of new job. But most important of all is his "style, chemistry and culture". In other words: whether the board likes the cut of his jib.

The City itself tends to agree, but is more wary of the dangers implied in crossing borders. "There's going to be a learning curve, and some companies don't have time to train up a new chief executive," said the head of research at one merchant bank. Ironically, the companies in which it is easiest for an outsider to take over are those that are in trouble and therefore have the least time to lose.

So what advice do other executives who have made the leap have to offer? Ask lots of questions, they say, and listen to the answers. In most instances, colleagues will be tolerant, at least for the first few months.

"Mine was a fairly big jump, although I can think of bigger ones," says Ken Minton, who moved from chemical maker Laporte to Mowlem, the construction company.

Mr Minton wanted to create a profit culture in the company, rather than having it rely on generating a cash inflow from borrowed money. "That way you can start to provide funds to inject back into the business and stimulate growth, which in turn stimulates management and gives them something to look forward to." But the shift had to be introduced diplomatically. "One of the first dangers is to believe you can transfer experience willy nilly," he said. "You've got to tread gently and be sure of your ground."

Stuart Wallis also wanted to introduce new ideas when he moved from Bowater, the paper and packaging company, to Fisons, the troubled drug company recently taken over by rival RPR. "One of the things I'd brought from Bowater was the idea that you've got to operate your factories around the clock. It's the only way you get full utilisation. But the norm in pharmaceuticals was single shift, double if you're lucky. In some cases change meant consolidation. It was a major campaign."

Before he started, Mr Wallis spent several months on the ground getting to know the business. "A lot of people think they can sit in head office and decide what needs to be done. I visited 60 sites in my first two-and- a-half months. You have to find out what the people working for you see as the opportunities and threats." Not only did he educate himself, but he got his staff thinking along new lines. "It's about taking a completely unjaundiced view of the problems and coming up with solutions that fly in the face of conventional wisdom."

Martin Taylor, who moved to Barclays Bank after being chief executive of textiles group Courtaulds, jokes that he is a chameleon. "Most of the time I was at Courtaulds people saw me as a City person, because I used to write for the Financial Times' Lex column. Now they see me as a manufacturer." His big problem when he took on his new job was that his arrival had been over-hyped. "The expectations were too high. People thought they'd get instant results. I've tried to let them down gently."

Mr Taylor believes that executives who make dramatic shifts in career direction are taking large risks. "There must be quite a high failure rate," he says. But that will change with time. "It should become less dangerous because executives are getting better management training, which is more transferable than experience."

One of the most travelled executives, Sir Peter Levene, now at the cabinet office, is, perhaps naturally, more enthusiastic about cross-sector career hopping. Among other things he has worked in the defence industry, run a railway and headed a troubled property company.

"If you've got a competent manager, the fact that he's changing his environment doesn't mean he ceases to be competent. When you enter a new industry you just look at the basic issues. Invariably you find you've had a similar experience. You may not have the right answer to hand, but at least you don't make the same mistakes you made last time."