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Secret CIO: The Ethical Path Isn't Always Winning Route

Don't assume doing the right thing will be rewarded at a company.

Every company I've ever worked for has a written policy requiring ethical business behavior. To varying degrees, managers lived the words. Mostly, their concern was to avoid unfavorable newspaper headlines and keep themselves out of jail, but all of them gave at least serious lip service to the idea. There was often a gap, however, between practice and principle, especially when the trade-off was personal gain versus treating people fairly.

A long time ago, I learned not to assume that doing the right thing is rewarded. I was what we today call a division CIO for a company with five business units. We five reported to our business-line executives. We had functional accountability to a corporate CIO, who spent his time hobnobbing with the big shots and was more worried about being able to report consistency in job grades (his responsibility) than in whether the systems worked (our responsibility). As in most things, the members of our quintet weren't equal. Two guys ran key organizations and the remaining three--Sean, John, and I--managed second-level units.

The inevitable reorganization occurred, and we were given marching orders to cut expenses and staff. It was unpleasant for us and doubly so for the people whose careers we had to disrupt. However, we did a relatively good job of meeting the targets and, in concert with the corporate CIO, redistributing the talent to minimize the pain. Sean was the only one who didn't make all of his cuts immediately. He presented a plan that stretched over nine months, explaining that the impact on profits and customer stability dictated that he do so. We didn't believe his rationale, but since his boss had signed off on it, we just shrugged and went on with the mind-numbing work ahead of us.

It was about four months later that one of Sean's analysts, a nice guy named Eric, came to see me about a systems-integration effort. His solution was innovative and when we finished, I said so. He asked that I tell Sean and went on to explain that he had two children in high school, a sick wife, and a large mortgage. He was very worried about keeping his job and said Sean had promised him special consideration if he could get good results on his projects. I was taken aback, but promised I'd communicate my satisfaction to Sean. You see, I was at a loss for words because I knew from Sean's latest plan update that Eric was to be laid off in less than two months.

I got together with Sean for lunch the following week. We went to a nice restaurant--our cutbacks had not affected our expense-account meals--where we discussed the reorganization. I related my conversation with Eric and asked whether Sean was changing his plan. He said no, and when I questioned his ethics, he said his job was to get as much as possible out of the people leaving, and he was doing exactly that. Besides, he added, by cutting people like Eric over time, not only was the productivity of his shop high, he was keeping his own image bright with the bosses. "The big guys always want to know what you've done for them lately, and my track record is of ongoing cost reduction," he concluded.

A few months later, one of the major division CIOs retired. I wasn't at all surprised when Sean was promoted into the job.

Herbert W. Lovelace shares his experiences as CIO of a multibillion-dollar international company (changing most names, including his own, to protect the guilty). Send him E-mail at

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