Who Will Be Your Next CIO: An Insider Or An Outsider?
Internal candidates are insular and inexperienced, external ones are overburdened with expectations and don't know the ropes. What's the best way to replace a CIO? Two words: Think ahead.
Do you know where your next CIO is going to come from? If you don't, you're not alone. A surprising number of organizations don't have an official blueprint for filling a CIO void, according to trend data, recruiters, consultants, and CIOs themselves. Surprising because one of the most important decisions a company makes about its business technology strategy is who will lead it.
This pivotal decision boils down to promoting from within or hiring an outsider, and that decision has everything to do with finding the most qualified person for the job. An increasing number of companies are going outside for their CIOs, and one reason may be because they don't have qualified internal candidates lined up. According to a recent survey by CDW, a computer equipment reseller, only 38% of 1,000 or so respondents--both CIOs and corporate managers--say their organizations have formal CIO succession plans.
Whether you go outside or promote a qualified candidate, you need a deliberate CIO succession strategy that aligns with the business and technology needs of the organization. Both choices have pitfalls, but one thing is clear: Being without an able and experienced CIO is a competitive disadvantage in today's technology-run global business environment.
That's the predicament Juniper Networks found itself in when CIO Alan Boehme left last summer. Boehme, who came to Juniper in 2005 from the CIO spot at Best Software, was involved in a car accident early last year and left Juniper several months later, for "personal reasons," the company says.
VP of IT operations and infrastructure Danny Moquin was appointed acting CIO. But shortly after a new CFO, Robyn Denholm, came on board last August, the company decided to initiate a search for a new CIO. It installed Kevin Smith, executive VP and head of the company's business process reengineering project, as interim CIO until a suitable candidate could be found.
"Danny's a great guy," says Denholm. "If the company was at a different phase, not growing as rapidly, he would have been the logical choice."
Goins was a perfect fit as Juniper's CIO; no internal candidate was found.
Photo by Jeffery Newbury
Juniper recruited Michele Goins, who was hired in February. Goins had spent 25 years at Hewlett-Packard, the last seven as the CIO of its $30 billion-a-year printer division, and had retired in May 2007. She wasn't actively soliciting another CIO spot but "people in the Bay Area knew I was available," and her reputation evidently preceded her, she says.
The position is a perfect fit for her, Goins says. The company has something of the feel of the early HP--a focus on core values and exciting momentum. Also, IT lacked strategic direction, and the applications group was "looking for a leader," she says. Goins says she tried "to sniff out" any resentment of her as an outsider; she didn't find it, but she did sense some apprehension that she wouldn't be able to "scale down" the skills and experience she gained at HP to match the needs of the smaller Juniper.
As for Moquin, he has the potential to be a CIO someday, but he needs more experience, Goins says. In particular, he's well versed in infrastructure but light on the applications side. He now reports to Goins. "We're working with him now to broaden his experience," she says. "It was just too soon in his career."
THE RIGHT STUFF
Finding the perfect CIO--be it an insider or an outsider--is particularly challenging because the qualifications for the job are somewhat subjective. The proper mix of leadership skills, technical depth, and business acumen isn't necessarily formulaic. A lot depends on the situation: the size of the company, the industry, and especially the expectations for the IT organization.
Many CIOs come from someplace else. According to our recent Tomorrow's CIO Analytics Report (available for purchase at informationweekanalytics.com), 58% of the more than 500 CIOs we surveyed say they were hired from another company. That trend is likely to continue: Nearly two-thirds of the CIOs say they expect their successors to come from outside their companies; in a similar survey last year it was 56%.
Some of this has to do with the short time CIOs spend in any specific corner office. In our Tomorrow's CIO report, more than half of the tech chiefs (53%) say they've been in their jobs five years or more. That's unusual, according to the recruiters and consultants contacted for this story, who peg the average CIO tenure at three to five years.
And some of that seems to be a technology version of wanderlust.
Eddie Chu, for example, considers himself something of a serial CIO. Chu has made a career of reorienting IT strategies and leading tech-based change on a contract basis. At his last three positions, he was the first executive-level manager of IT. "When a company wants to take its [technology operation] to the next level, that's where I fly," he says.
Original research and executive interviews point to the threats and opportunities for the CIO role.
Chu recently changed his M.O. when he was hired last February at Minto Group, a real estate developer in Ottawa. The IT challenges at Minto are typical of a midsize, privately owned company, Chu says: The e-mail runs but there's no IT architecture, and "any enterprise software is grossly underutilized." His IT staff of 25 is "mostly keep-the-wheels-on people," he says.
Minto is holding its own, despite the real estate downturn, Chu says. The three brothers who own the "highly profitable" company have ambitious plans, and they realize "just keeping IT running is not going to get them there," he says. Chu brings both business skills and technology chops to the job. His main thrust right now is to rationalize the company's business process engineering efforts across all five of its operating groups.