Stuck In The Middle Ranks

CIOs, still seen as technologists, are rarely on the short list for top management slots

By JOHN BERRY

On paper, moving from CIO to CEO is as easy as changing the middle vowel. In practice, career advancement into the elite chamber of top-level management is much more elusive.

As information technology evolved from a support function to perhaps the most strategic asset of a company, many expected the steward of the corporation's digital assets-the chief information officer-to be on the fast track into chief executive officer ranks. In fact, that's rarely the case.

"There are very few Fortune 1000 companies calling on CIOs to run companies today," says David Cowen, president of Fanning Technical Search, a recruitment company. Cowen has personally handled 24 CIO searches in the past two and a half years, and even as IT gains corporate stature, "CIOs don't have the background to be CEOs," he says.

The narrow focus of IT is seen as an obstacle. "Most people are groomed for the CEO position, and it is generally a drawback to be a single-position player," says Clark Collins, partner in Morris, James, Hitchens and Williams, a law firm that follows CEO issues. CEOs traditionally rise from the fields of finance, marketing or operations.

CIO Advocate
Todd Carlson, former CIO of Electronic Data Systems, wants to change all that.

Carlson began looking for a successor six months ago and retired from EDS at the end of last year. He has since been evangelizing about the opportunities for CIOs to enter the inner sanctum of corporate decision making.

As Carlson sees it, the CIO already has evolved from data processing manager, to technocrat, to a key strategist who marries technological expertise with a deep understanding of how the business works. The key is for the CIO to escape the perception that he or she is simply an IT problem solver.

"Officially, the CIO is the chief information officer, but what are you really doing at the company?" asks Carlson. "If you're getting dragged down into infrastructure issues, then you should consider yourself chief infrastructure officer. And you're not going to go very far if you're the chief infrastructure officer since it's essential, but not appreciated."

Many CIOs either get bogged down in narrow technical issues or just don't aggressively pursue wider business responsibilities, Carlson says, and that's holding back their advancement.

Even if they remain CIOs, Carlson says, adding business acumen to their portfolios can yield big premiums in salary. And when CIOs reach out for comprehension of business processes, they take another step closer to the executive suite, he says.

CIOs themselves are well aware of the challenges. In a recent survey by recruiter Korn Ferry International, only 29 percent of CIOs surveyed saw any chance of becoming CEO.

"It's not the skill set they see being promoted into the position of CEO," says Phil Schneidermeyer, CIO practice leader at Korn Ferry. Schneidermeyer has placed 24 CIOs over the past three years and also stresses the importance of acquiring business understanding if the CIO has any chance of running companies in the future.

Steve Yates, CIO and head of logistics at Rockwell Automation, is one of those rare contenders. Yates turned down a CIO offer in San Diego to work in less-than-balmy Milwaukee because "I wanted a job where I was directly involved in the mainstream operation of the business," he says.

"I think CIOs should seek some form of operational responsibility in addition to the classic IT duties because it forces you to be in close working contact with the mainstream of the company's operation," Yates says. "That can't help but make one more sensitive to the business needs and how IT contributes to its success."

Poor Performers?
Not everyone is upbeat about the track record and prospects of CIOs. Greg Hackett, founder of The Hackett Group, a consultancy that benchmarks the performance of knowledge workers, has worked with 1,300 companies, including two-thirds of the Fortune 100.

"The performance of the CIO organization has been pretty abysmal," he says. "Only 40 percent of big IT projects come in on budget and on time. Do you know any business leader who would say, 'I can only get 40 percent of the job done but leave me in charge anyway?' "

CIOs are being singled out, says Jim Luisi, executive director of the 2,400-member Society for Information Management. He sees the need for broader-based business skills, yet asks: "How many companies that have poor financial years get rid of the chief financial officer? Does this mean the CFO should not aspire to becoming the next CEO? Not quite the case."

In fact, Hackett sees CFOs encroaching on CIO career opportunities. "They're the ones spearheading sophisticated analysis and coming up with benchmarking and performance metrics, and new planning processes. They're focusing management on decision-making information."

CIOs "run the risk that the CFO strips the information side of their job away from them, and all the CIO ends up as is the CTO or chief wire dog," Hackett says. "Keep in mind that 70 percent of all CIOs report to a CFO."

Aspiring to the CFO job is not the answer for CIO career advancement, either. Hackett says: "CIOs can aspire to be CFOs all they want, but until they develop more well-rounded skills-communication and expertise in manufacturing or other business processes-they aren't going all the way up the corporate ladder anytime soon."

Hackett knows of exceptions, of course. He points to Dick Keintz, CIO and CFO of $1.8 billion CUNA Mutual Group. Keintz not only has an unusual hybrid title, but, according to Hackett, possesses unique leadership skills and a charisma beyond technical ability-and that's what is required of CEOs of large organizations.

Keintz was CFO for several years before being given CIO responsibilities as well. He says it didn't matter that his background is in accounting and finance, and not technology. With the aid of technologists he trusts, he and his team can implement an array of IT projects to satisfy business goals. These include DB2 and Oracle customer database consolidation and enterprisewide integration efforts for its 5,000 employees. These technologists are CIO candidates if Keintz ever moves up or out. Are they CEO caliber? Tough to tell at this point, he says.

"Mostly, they are good communicators. But they are inwardly focused, trying to satisfy the internal customer-company departments and functions. In the financial service industry, the external market focus and the ability to communicate are extremely important."

Keintz believes the sharp technologist seeking entrance to senior management ranks needs experience executing strategies and activities that capture and retain customers, because they ultimately determine the company's profitability. These are experiences traditionally unavailable to technology-focused managers.

For his part, consultant Hackett sees the CIO naturally becoming more visible as IT becomes more strategic, but there's a long way to go. "I have met some very sharp CIOs who understand the business they are in, and they could become CEO." But right now, this is a very small group, he says.

John Berry is a writer and IT consultant. He can be reached at jb@empnet.com.