By Elizabeth Wasserman
A survey last year by CIO Insight magazine of nearly 500 top IT executives found that two-thirds were hired into their current jobs from outside the company. Furthermore, only 30 percent of them said their firms have put in place sufficient plans for selecting their successors.
A company that has a well-functioning IT department and wants to ensure continuity should consider identifying talented employees and creating a program to groom them to become potential department leaders, executive recruitment experts say. Preparing direct reports for expanded responsibilities within an organization is even more essential today, when there are increased security threats, additional compliance obligations, intense budgetary pressures, and a limited pool of talented IT leaders.
"CIO succession is a very important issue because there is a lack of highly qualified, world-class CIOs, and there is significant demand for those that have a proven record," said Mark Polansky, managing director of the information technology practice at executive-recruitment firm Korn/Ferry International. "It's the smart companies that will groom and will promote from the inside."
A CIO in charge of a successful IT operation -- one that is aligned with the company's business goals, provides excellent service at the right cost, and benchmarks well against competitors -- should take the responsibility for grooming underlings, ensuring that these employees are growing and expanding their skill sets, and then promote from within. CIOs often fail to concentrate enough on staff development for the simple yet overwhelming reason that there are too many fires to put out already. And often, the IT shop just seems too small to allow for the perceived luxury of grooming employees. Adds Polansky, "there's a very short-sightedness in hiring staff for jobs rather than for a career. It's a case of 'I need a good applications person. I need a good data warehousing person or a networking person.' There's not enough emphasis placed on where this person fits into a succession plan."
Of course, there's no "one size fits all" model for a CIO. The necessary skill sets have changed to the point where an advanced degree is commonplace, a track record of managing projects is a necessity, and an understanding of the business goes without saying. Certain specialties can make a candidate stand out, such as managing an outsourcing IT relationship overseas or managing an IT operation through an acquisition or merger.
Carl Gilchrist, who leads the North American CIO practice for executive recruiter Spencer Stuart, points out that each company is different, with its own unique problems, and so must assess how much change is needed in a CIO. But, Gilchrist added, one argument for bringing a future CIO up through the ranks is that he or she can get to know the business better than someone brought in from the outside.
"It's the responsibility of the CIO to see that all their talent is developed," Gilchrist said. "A company needs to have a bigger, stronger bench to go to. They should be developing people at all levels, particularly the director or the executive vice president who have the potential to become the CIO some day."
A CIO can take several steps to help ensure continuity in an IT organization; challenge and broaden staff members, and identify and mentor potential leaders from within, according to experts.
- Reward good work with opportunities A good way to keep a talented No. 2 from being wooed away to a top spot at another firm is by giving him or her additional challenges. Arrange to put them in a business role for a while. Give them a key initiative, such as coordinating Sarbanes-Oxley compliance or something else that has enterprise value, Gilchrist advised.
- Suggest educational opportunities CIOs at large firms may be able to offer talented IT executives an opportunity to earn an MBA or another advanced degree that will ultimately help them gain the knowledge and accreditation they need to assume the top IT spot someday. There are also programs that don't require the time and financial commitment of a degree, but offer additional opportunities for education, such as regional leadership forums, like those run by the Society for Information Management, or commercial programs, such as Gartner's CIO Academy, explains Polansky.
- Expose to senior managers The CIO can bring a talented department head to more business meetings, whether it's a planning meeting for business expansion or a strategy session for how to comply with new regulations. This will help expose the newcomer to business counterparts in other divisions and to senior managers, in addition to deepening his or her understanding of how the business works.
- Develop leadership skills Large firms have leadership development training programs. Such programs offer CIOs a path to develop new skills in a trusted executive who has already successfully managed projects.
- Include in social functions All too often, the personal relationship is left out of the equation these days, lamented Tom Berray, a partner at Cabot Consultants Inc. in McLean, Virginia, who recruits senior executives for positions in information technology. Invite a talented direct report to a business leadership group dinner, a holiday party, even a golf outing. "I spoke with one acting CIO who was one of a number of finalists for the top job," Berray said. "I told him that to compete against these external candidates he needed to start building some relationships outside of the business context." A CIO who mentors a successor can often help open those doors.
Good leaders are good mentors. "When you groom people, you may eventually lose them," Berray said. "But that doesn't mean you should stop grooming them. The high achievers who end up staying with an organization have all gone into positions of increasing responsibility or new challenges. That's one of the reasons they stay."
The bottom line is that companies can reap a return-on-investment by devoting time and resources to grooming IT talent that's already in the family.
Elizabeth Wasserman has written about technology and business for Inc., CIO Insight, and the San Jose Mercury News. She is a freelance writer based in Fairfax, Virginia.