As businesses continue to evolve, the qualities sought in C-suite leaders must evolve too. Traditionally, companies prioritized hiring executives with deep industry expertise. After all, an executive who knows the ins and outs of a specific market or sector brings a wealth of technical knowledge that seems crucial for navigating industry-specific challenges. However, this approach may be shortsighted. In the modern business landscape, the ability of a C-suite executive to foster a strong, cohesive organizational culture has proven to be far more significant in determining long-term success.

Let’s review why companies should reconsider placing too much weight on industry expertise during their executive hiring process, and why cultural leadership should be the true north star guiding their decisions.

The Acquirable Nature of Industry Expertise vs. The Art of Cultural Leadership

Industry expertise, while valuable, is often overrated. Executives with a growth mindset and a strategic approach can quickly learn the nuances of any industry. Training, advisory support, and immersion in the company’s daily operations are enough to fill in the gaps of specific knowledge. The key point to consider is that while expertise can be learned, leadership skills—especially those required to build a positive culture—are often innate and harder to cultivate.

Cultural leadership is an art that requires a deep understanding of people, their motivations, and how to bring out the best in them. This kind of leadership is about fostering an environment where employees feel empowered, connected to the company’s mission, and motivated to innovate. The truth is, a leader who knows how to align an organization culturally can easily acquire industry-specific knowledge, but the reverse is not always true. Industry experts who lack the ability to lead with empathy and vision often struggle to inspire and retain talent, which is far more detrimental to the company in the long run.

The Future of Work is People-Centric, Not Industry-Centric

As we enter the era of remote work, hybrid teams, and increasingly self-managed organizations, the importance of a people-centric approach to leadership has never been greater. The pandemic drastically shifted how businesses operate, pushing them to become more flexible, agile, and mindful of employee well-being. This shift requires leaders who can manage complex, dynamic teams with a high degree of emotional intelligence.

In this context, the role of the C-suite is not merely to deliver quarterly results, but to foster a work environment where employees thrive, collaborate, and remain deeply connected to the company’s purpose. A leader with industry expertise but no ability to build relationships or manage a culture that promotes belonging and engagement will fail to lead in the future workplace. By contrast, leaders who prioritize empathy, transparency, and inclusiveness are those who will shape organizations that can adapt to change, retain top talent, and drive innovation.

“Companies that focus solely on hiring leaders with deep industry knowledge are missing a crucial element: the ability to cultivate a culture where people can perform at their best.”

In a world where talent retention is one of the biggest competitive advantages, cultural leadership is no longer optional—it’s essential.

Culture as a Key Driver of Innovation and Performance

It’s no secret that innovation thrives in environments where employees feel empowered, valued, and motivated to contribute their best ideas. A company with a strong culture encourages risk-taking, experimentation, and cross-functional collaboration—key ingredients for innovation. However, these elements don’t emerge in organizations where leaders focus solely on industry trends or best practices. They arise in environments where leaders cultivate a sense of shared purpose and belonging, creating psychological safety that allows people to think creatively and innovate without fear of failure.

Moreover, research consistently shows that companies with strong cultures outperform those without. Studies have linked strong organizational culture to higher levels of employee engagement, reduced turnover, better customer satisfaction, and even higher profits. This connection makes sense when you consider that employees who feel aligned with their company’s mission and values are more likely to go the extra mile, invest in long-term success, and help innovate the next big idea.

“Executives who focus on culture over technical expertise help ensure that the company is positioned to harness the full creative potential of its workforce.”

On the flip side, when leadership is overly focused on technical proficiency or market-specific tactics, they often miss the bigger picture: without a healthy, innovative culture, even the most technically advanced teams will underperform.

Cultural Leadership Fuels Organizational Agility

In a fast-paced business environment, agility is everything. Companies that can pivot quickly in response to market changes, technological advancements, or global disruptions will outlast those that remain tied to rigid structures and outdated practices. This is where the value of a cultural leader becomes clear.

Leaders who prioritize culture foster an environment of continuous learning and adaptability. They encourage teams to be curious, take ownership, and develop problem-solving skills that can be applied across various scenarios. These leaders recognize that resilience in the face of change is not about having all the right answers, but about creating a team that is adaptable, collaborative, and empowered to find solutions quickly.

Executives who are too focused on industry expertise may rely too heavily on established processes or frameworks, making them less agile when the market demands rapid change. A leader who fosters a strong organizational culture, however, is more likely to build teams that can handle uncertainty, innovate quickly, and adapt to new challenges with confidence.

Culture as a Competitive Advantage for Talent Attraction and Retention

In the post-pandemic job market, the war for talent has intensified. Employees are seeking more than just competitive salaries—they want to work for companies that value their well-being, provide meaningful work, and foster a culture of inclusion and respect. According to several studies, culture is one of the top reasons employees choose to stay with or leave an organization.

For companies, this means that culture is a competitive advantage in the fight to attract and retain top talent. C-suite executives who can build a culture that reflects the company’s values and creates an environment where people want to work are worth their weight in gold. They are the ones who will not only attract the best and brightest but also retain them, reducing turnover costs and increasing employee loyalty.

By contrast, a C-suite leader who is hired primarily for industry expertise but lacks the ability to create a positive work environment will find it increasingly difficult to build and retain a high-performing team. The cost of high turnover, disengaged employees, and low morale is far greater than any benefit derived from industry-specific knowledge.

Financial Performance and Culture are Intertwined

While it may seem that focusing on culture is a “soft” business strategy, the reality is that strong cultures deliver hard results. Numerous studies show that companies with strong cultures enjoy better financial performance over time. This is because culture impacts every level of an organization—from employee engagement to customer satisfaction to operational efficiency.

“Executives who prioritize cultural leadership ensure that their teams are aligned with the company’s strategic goals and motivated to achieve them.”

This alignment translates into higher productivity, better collaboration, and more innovative solutions to business challenges. In the long run, companies with strong cultures outperform those that don’t, and the difference can often be measured in terms of profitability, growth, and market share.

Conclusion: Why Companies Must Rethink C-Suite Hiring

The evidence is clear: companies that prioritize cultural leadership over industry expertise in their C-suite hiring decisions are positioning themselves for long-term success. While industry knowledge can be learned and refined, the ability to foster a positive, resilient, and high-performing culture is a unique and essential skill that cannot be overlooked.

As the future of work becomes more people-centric, companies need leaders who can not only navigate technical challenges but also inspire, engage, and empower their workforce. These leaders will be the ones who drive innovation, adapt to change, and create organizations where people—and profits—thrive.

If your company is still focusing on hiring executives based on their industry background, it may be time to rethink that approach. In the end, it’s the strength of the culture that will determine whether your organization succeeds or struggles in the years to come.