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What It Takes To Be a Top Technology Executive

By Robert Hertzberg  |  Posted 2006-12-06 Print this article Print

Executive recruiter Gerard McNamara talks about what it takes to succeed at a Fortune 200 company.

Since joining executive recruiter Heidrick & Struggles in 1995, Gerard McNamara has helped bring top technology talent to some of the biggest U.S. corporations. The former IBMer and Marine captain talked about what he's seeing in an interview with Baseline contributing writer Robert Hertzberg.

Q. How secure--or insecure--is the job of the average CIO at a Fortune 200 company these days?

A. The number moves, but I'd say the typical tenure is anywhere from 36 to 48 months. It was a shorter window a couple of years ago, and now it's longer. The budget the CIO handles in a large corporation is as large as any other budget. The systems, the infrastructure, the cost of labor and benefits-it's massive. And that's the operating budget. The capital budget can be very large as well. There are bet-the-ranch initiatives and if they go off the rails, someone's going to pay. Typically it's the CIO.

Q. When big companies go to hire a CIO these days, what are the main skills they're looking for?

A. Proven understanding of what technology is prevalent certainly is important, but they are really looking for a business leader--someone who can provide advice and counsel to the very senior team of an organization. For instance, let's say the company is considering an acquisition. A good CIO needs to be able to articulate the implications for both companies' technology, how long assimilation will take, what it will cost, what the risks are.

A lot of CIOs fail because they can't communicate technical matters in layman's terms. They can't set expectations. They are seen as these sort of techie geeky people who are constantly apologizing for things that go wrong.

Q. Among the companies that have retained both a CIO and CTO role, how are the responsibilities divided up?

A. The CIO is responsible for the systems that move the data, the applications used to conduct business. At some large banks, there's a CTO who's responsible for the strategic computing architecture and the infrastructure, for knowing what new technology is coming down the pike that the company should leverage.

Q. Do technology executives do well when they move between industries?

A. The answer to that is, your mileage may vary. But sometimes they do very well.

For instance, a large bank came to us to find an executive who could help them manage the movement of money between thousands of ATMs. They looked within the industry--What is this bank doing? What is that bank doing?--and quickly came to the conclusion that no one was doing it better than them.

And actually, the person we placed came out of one of the shipping companies, the UPS-FedEx sector. He came in and looked at this distribution supply chain money-movement problem, and basically turned it into a science. Now no one can touch how this bank does it. This individual has personally taken millions of dollars in costs out of the movement of this money.

Q. Can you tell us his name?

A. I can't. I can share with you that it's one of the top three banks.

Q. You've seen a lot of CIOs succeed and fail. What's the smartest single decision you've seen one make?

A. I've been doing this almost 13 years, so it's difficult to put my finger on one thing. There are just so many placements and individuals.

Q. Would it help if I asked what the dumbest decision was?

A. Ha! There's a bunch of those. Probably every CIO would raise their hand and say I've got a couple just today.

I think there are a lot of CIOs who would come to you and say, outsourcing sounded like a good idea at the time, but it was the worst thing we ever did. We made the very stupid decision of assuming we could pay someone to take care of our problems, when at the end of the day they still remained our problems. What we should have done was rationalize the business first and then hand it over in a very controlled matter. There are still companies learning how to do that well.

Q. How much should a CIO at a Fortune 200 company expect to get paid in 2007?

A. It depends on the industry. There are companies whose lifeblood is data--the information they hold on their clients is the most critical thing. In those industries--some of the consumer companies, many of the banks--the CIO reports in to the CEO and compensation is dramatically higher. At a bulge bracket bank, you're talking about people making north of $1.5 million or $2 million in cash, and equivalent sums in equity.

Q. And elsewhere?

A. At many industrial industries, the CIO reports in to the CFO. You probably wouldn't break a million in cash, but you'd get significant equity in the way of options. Although nowadays, a lot of people are going to RSUs [restricted stock units] as a result of the changes in the industry.

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