Unlocking the Potential of Cross-Industry Leadership in the Head of Tax Role.

The Head of Tax role is highly transferable across industries, and industry-specific knowledge should be just one of many factors in selecting a candidate. Companies that embrace a diverse candidate pool, rather than limiting their search to their sector, can tap into a wealth of top talent, especially when facing disruption or needing a change agent.

The Head of Tax role has evolved from focusing primarily on tax compliance and minimising risks to playing a crucial strategic role in the business. Today, senior tax leaders’ focus has expanded to include aligning tax strategies with business goals, managing the tax aspects of significant decisions (such as M&A), and driving value through tax-efficient practices. As a strategic player, the modern Head of Tax also plays a crucial role in corporate governance and contributes to the organization’s overall strategy and accountability.

As the role expands and becomes more complex, CFOs looking externally for a Head of Tax have more to consider. Many remain hesitant to look beyond the traditional candidate pool within the same sector (or organisational type), fearing that someone without sector-specific experience could jeopardise the organisation's financial stability. This caution often stems from concerns about the time it takes for newcomers to acclimate.

Our experience advising clients and candidates on the challenges and benefits of changing sectors is backed by insights from interviews with Heads of Tax and CFOs across Europe who have successfully transitioned between industries.

What Can the “Outside Option” Offer?

Our experience placing Heads of Tax into new industries has shown that companies that hire from outside their sector do so for various reasons. They may seek fresh external perspectives or require specific skills at a critical point in their business. Bringing in an “outsider” can often act as a catalyst for change.

Companies that make this shift in thinking and look outside their immediate industry can also widen their talent pool and tap into valuable qualities, particularly critical non-technical skills such as humility, empathy, and resilience, which are crucial for influential people leadership and stakeholder management.

The Head of Tax role is deeply embedded within the finance function, so it might seem that considering talent from outside the sector would result in a loss of specialised expertise. However, industry-specific experience is just one of many factors to consider when embarking on a search. Conversations within our network highlight that a new hire's fresh perspective and leadership abilities can often outweigh the importance of technical expertise alone.

Here are some of the benefits of expanding your search criteria to explore a broader range of candidates:

• To gain specific skills crucial for critical business events, such as acquisitions or IPOs.
• To drive change and innovation in a sector undergoing transformation.
• To access a broader pool of top-tier candidates.
• To enhance the diversity of the leadership team.
• Focus on leadership ability over purely technical skills in your talent strategy.

Key Considerations for a Successful Switch

Most Heads of Tax transitioning into a new industry will encounter various personal, cultural, and commercial challenges. Newcomers must gain the trust of colleagues and align the organisation while asking the right questions to grasp the industry's nature, business models, and culture.

It’s critical to approach the transition thoughtfully and with respect for those around you. Get this right, and you’ll enjoy getting up to speed and gaining credibility in an entirely new environment even faster.

For those who successfully make this transition, our network reports that exposure to different industries has significantly enhanced their understanding of the businesses they serve, which has presented opportunities for growth and progression.

There is a strong demand for versatile talent in today's constantly evolving workplace. Heads of Tax who diversify their career profiles by gaining experience in multiple industries can reap the rewards of career advancement. Successfully navigating one sector change increases the likelihood of managing future transitions (inc., international secondments or internal moves across the tax function) with ease.

Below are some key points to consider upon embarking on a sector switch:

• Collaborate with HR to create a structured induction program that aligns with your background and experience.
• Immerse yourself on the frontline by being humble, learning from all business levels, and building relationships with peers across functions to understand how tax can best support them.
• Learn the business language by mastering relevant terminology and understanding conversational nuances.
• Identify a mentor to provide guidance and feedback during your transition.
• Be flexible and adapt your interaction style to fit the business environment.

Foster a Change Mindset

Those who successfully transition into new industries often have a history of deliberately stepping out of their comfort zones, challenging themselves, and taking calculated risks. These experiences teach individuals to learn, adapt, and influence in diverse environments.

Our experience indicates that the Heads of Tax most prepared to enter a new industry are those with a mindset geared toward change, a natural curiosity, and a genuine interest in new experiences.

It's important not to become overly specialised. Engage with all aspects of the Head of Tax role and develop the necessary competencies across different areas to delegate and manage activities effectively while maintaining a broad perspective to avoid micromanagement. Continually cultivate a mindset focused on continuous learning and development at every level. Additionally, taking on a secondment, whether internationally or within a new area of tax, can significantly propel your career forward. If you are an aspiring Tax lead, you position yourself strongly for that number one role by taking such steps, broadening your exposure and challenging yourself in new environments.

Conclusion

The core skills of a senior tax leader are transferable across sectors. Heads of Tax who adopt a change mindset and accept new opportunities can enhance their leadership skills and gain valuable new perspectives, proving that such transitions are not only possible but often advantageous for their career growth. Companies that prioritise skills and potential over industry experience can access a more diverse talent pool, which, in turn, can help the tax function progress to new heights.