CIO to CEO: 56 Moving Up The Ladder

 
 
By Kim S. Nash  |  Posted 2007-02-15
 
 
 
In This Feature:

CIOs Who Made the Leap

A new kind of CIO—a blend of business strategist and operations tinkerer—is rising to power beyond I.T.

The List: 56 CIOs, Where They've Been and Where They Are Now

Profiles:

  • Mark Cameron, COO, Vantagemed
  • Dawn Lepore, CEO, Drugstore.com
  • Lloyd Devaux, COO, BankAtlantic
  • Maynard Webb, CEO, LiveOps

    Next page: Making the Leap

    Making the Leap

    Some of today's best CIOS don't stay CIOs. Dozens of former chief information officers now fill the top corporate jobs of chief executive and head of operations. They are the first movers in the rise of a new kind of CIO: an executive who transcends the role of technology manager to become, at once, a big thinker and someone who can tune operations with technology to drive a company.

    Multibillion-dollar companies like Amazon.com and Google wouldn't exist without technology, of course. But neither would the current incarnations of stalwarts such as car maker Ford Motor, trucking company Schneider National, drug-store chain Walgreen and casino Harrah's Entertainment.

    As technology remakes companies, the CIO managing it now has unprecedented visibility and career opportunity. But populating the corner office with former information-technology leaders doesn't guarantee success. It's unclear what may happen, for example, at Vantagemed or Drugstore.com, which have lost money for years and have ex-CIOs for CEOs.

    Many other companies, meanwhile, are making chief operating officers and presidents out of CIOs, including Athenahealth, Fifth Third Bancorp, Microsoft, Pacer International and tool maker Snap-On. A list of 51 who have gotten such promotions starts on this page.

    Lloyd DeVaux, 54, was promoted from CIO to COO two years ago at BankAtlantic, a $702 million bank in Fort Lauderdale, Fla. He says he would love to be a CEO someday. "I feel like I have to put some time in as a COO and continue to develop," he says. He has an M.B.A. and is enrolled in a three-year executive education program at Harvard. "You can't always create the opportunity, but you can be ready for it."

    Steve Matheys, executive vice president of sales, marketing and customer service at Schneider National, dismisses the saw that chief information officers are mired in a techie realm, unable even to make themselves understood by peers from other parts of the company. "CIOs have a lot more business knowledge than I think sometimes people give them credit for," says Matheys, 48, who was CIO at the $3.5 billion trucking company for six years before taking his current position in 2004. He reports to CEO Chris Lofgren, who himself was Schneider's CIO for four years.

    "When I was CIO, I was spending 70% of my time on business issues and 30% on technical issues," he says. "I.T. writes the code that executes the rules of the business. Extremely deep insight comes from that."

    Next page: Keep Dreaming

    Dream On

    Still, only some CIOs can make the leap. Certainly, chief information officers who report to CEOs and work on strategy teams with the company's most senior executives can flourish in straight business jobs, according to Vivian Stephenson, a former CIO at department stores Mervyn's and Target. She went on to be chief operating officer at Williams-Sonoma for three years before retiring last June.

    Such CIOs know business and know how the company works, says Stephenson, who has also done leadership development consulting and sits on the boards of CarMax and the California State Automobile Association. For example, they can recite the order-to-cash cycle and what's involved from the point of generating a sales lead to closing a deal. The clincher, she says, is that they also know where the inefficiencies are in those areas that hold the company back. Corporate boards pay to find CIOs like that, wanting to groom them for bigger roles.

    "As companies become more dependent on technology, the CIO is indeed a potential successor to the COO and even CEO," says Paul Groce, a partner at Christian & Timbers, an executive search firm in New York. Groce specializes in placing CIOs. "Clients are asking for [such] candidates," he says. "That's a very different model than in the past."

    And good luck to those CIOs still buried in the technology boiler room as glorified project managers, reporting to the chief financial officer. "A CIO who concentrates on the technical side at the expense of understanding their business—I don't think they'll be around for long, even as a CIO," Stephenson adds. "And they wouldn't fit in the non-I.T. offices."

    Yet such a technology leader, dreaming of bigger things, might not realize what he lacks.

    Bruce Skaistis, founder of eGlobal CIO, a consulting firm in Tulsa, Okla., tells the story of one information chief who was made president of a new business unit at the travel services company he worked for. Though he had no marketing or sales experience, the former CIO insisted on devising advertising plans and being involved in major sales activities, says Skaistis, who consulted at the company. "The initial marketing and advertising was a disaster, and he couldn't blame anyone but himself," he says. "Sales were very slow at first, and many of the salespeople bailed out." Forced to resign, the executive has left the travel business but is back in I.T., according to Skaistis.

    Next page: Be a Tougher Boss

    Tougher Boss

    CIOs can falter outside of technology because they're unwilling to delegate or unable to strategize for an entire company rather than just one department, according to Shawn Farshchi, chief operating officer of Coremetrics, a marketing statistics and software firm in San Mateo, Calif.

    Farshchi, 49, was CIO at DHL Airways, BroadVision and WebEx, and says each of those jobs brought a succession of increasing business responsibilities. These included product management at BroadVision, which makes Web software, and making sales calls on potential customers at WebEx, the online conferencing service. "Some CIOs can't bring themselves out of the technology world," he says. "I got to appreciate the non-technical aspects of life."

    Like Ivy League alumni, CIOs who break into non-technical senior ranks advocate for CIOs coming up. Farshchi, who took the COO position at Coremetrics last year, hopes to hire a chief information officer soon at the growing company. And when he does, he will make sure that person reports to him, not the chief financial officer.

    "I want someone who will be part of executive staff because I'll tell you, the CIO is a critical function in a company," he says. "Done right, it adds huge value to the business."

    But, he adds, "I'll be tougher as a boss for a CIO because I have pretty high expectations without any kind of hesitation that maybe they're not possible."

    Next page: The List of CIO Leapers Leapers">

    The List of CIO Leapers

    Fifty-six CIOs who have moved into positions of greater power. This list is in chronological order beginning in 1996.

    EXECUTIVE WAS CIO AT… BECAME... WHEN
    BRUCE
    GIESBRECHT
    Hollywood Entertainment
    1993-1996
    Sr. VP Product Management, Hollywood Entertainment 1996-1998
    President of Strategic Planning, Hollywood Entertainment 1998-2000
    Sr. VP Business Development, Hollywood Entertainment 2000-2003
    President and COO, Hollywood Entertainment 2003-2005
    CEO, Hollywood Entertainment 2005
    BILL RADUCHEL Sun Microsystems
    1992-1998
    Chief Strategy Officer, Sun 1998-1999
    Chief Technology Officer, AOL Time Warner 1999-2002
    Chairman and CEO,
    Ruckus Network
    2004-2006*
    JOHN ANDREWS CSX
    1992-1998
    Founder, eMedSoft 1998-2002
    President and CEO, Giga Information Group 2002-2003
    President and COO, Evans Data Corp. 2003-Present
    MIKE CAPELLAS Compaq
    1998-1999
    CEO, Compaq 1999-2002
    President of merged Hewlett-Packard/Compaq 2002
    Chairman and CEO, WorldCom 2002-2006
    BRUCE PARKER Ryder System,
    1994-1997
    United Airlines,
    1997-1999
    Exec. VP, Sapient 1999-2002
    Managing Director, IT Management Group LLC 2002-2006
    Chairman and CEO, AirNet 2006-Present
    PATRICIA HIGGINS Alcoa
    1997-1999
    Chairman and CEO, The Research Board 1999-2000
    President and CEO, Switch and Data Facilities 2000-2004
    DAVID BERNAUER Walgreen,
    1995-1999
    COO, Walgreen 1999-2002
    CEO, Walgreen 2002-2006
    Chairman, Walgreen 2006-Present
    MAYNARD WEBB Gateway
    1998-1999
    COO, eBay 1999-2006
    CEO, LiveOps 2006-Present
    CHRIS LOFGREN Schneider National
    1996-1999
    CEO, Schneider National 1999-Present
    JACOB SCHORR Spirit Airlines,
    1997-2000
    CEO, Spirit Airlines 2000-2006
    STEVE SCHUCKENBROCK Frito-Lay, 1995-1998
    PepsiCo, 1998-2000
    COO, The Feld Group 2000-2003
    Co-COO, EDS 2003-2006
    Sr. VP Global Services, Dell 2006-Present
    NICHOLAS
    MATURO
    Kraft Foods,
    1999-2000
    COO, Foodtrader 2000-2002
    VP Strategic Planning, Whitney Information Network 2002-2003
    COO, Whitney 2003-2004
    President, Whitney 2004-2006
    KAL RAMAN Drugstore.com,
    1998-2001
    CEO, Drugstore.com 2001-2004
    VIVIAN STEPHENSON Mervyn’s, 1989-1994
    Target, 1995-2000
    Consultant, Apple 2000-2003
    COO, Williams-Sonoma 2003-2006
    KEVIN TURNER Wal-Mart,
    2000-2003
    CEO, Sam’s Club 2003-2005
    COO, Microsoft 2005-Present
    ASIFF HIRJI TD Ameritrade,
    2003-2005
    COO, TD Ameritrade 2005-2006
    President, TD Ameritrade Client
    Group
    2006-Present
    STEPHEN
    FRANCIS
    InsLogic,
    2000-2004
    COO, Trumbull Services 2004-2005
    President, Trumbull Services 2005-Present
    LLOYD DEVAUX Union Planters,
    1994-2001
    BankAtlantic,
    2001-2004
    COO, BankAtlantic 2004-Present
    MICHAEL CURRAN Boston Stock
    Exchange,
    2001-2003
    COO, Boston Stock Exchange 2003-2004
    CEO, Boston Stock Exchange 2004-2005
    Chairman and CEO, Boston Stock Exchange 2005-Present
    MEHRAN ASSADI Provident Mutual,
    1998-2003
    National Life Group,
    2003-2004
    COO, National Life Group 2004-2005
    President, National Life Group Life and Annuities unit 2005-Present
    STEVE MATHEYS Schneider National,
    1998-2004
    Exec. VP Sales, Marketing & Customer Service, Schneider National 2004-Present
    STEVE CURD UnitedHealthCare,
    1998-1999
    HealtheonWebMD,
    1999-2002**
    CEO, VantageMed 2004-Present
    DAWN LEPORE Charles Schwab,
    1993-2001
    Vice Chairman, Schwab 2001-2004
    President, Chairman and CEO, Drugstore.com 2004-Present
    JEFF HOWKINS Mellon Financial’s
    Institutional Asset
    Management unit,
    2000-2003
    VP Risk Management, Old Mutual 2003-2004
    COO, UPromise Investments 2004-Present
    MARK CAMERON VantageMed, 2005 COO, VantageMed*** 2005-Present
    ALEX MUNN Pacer International,
    2002-2005
    COO, Pacer International 2005-Present
    ANTHONY MANESS Jameson Inns,
    2003-2005
    VP Hotel Operations,
    Jameson Inns
    2005-Present
    AL BILAND Snap-On Tools
    Diagnostics
    Information Group,
    1998-2005
    President, Snap-On Tools Co. 2005-Present
    JOHN SPENSER Medicals Direct,
    1997-2005
    Chief Administrative/Technology Officer, Hooper Holmes 2005
    COO, Hooper Holmes 2005-2006
    PAUL FUSCO J. Crew, 1999-2005 COO, CRS Retail Systems 2005-Present
    MARV ADAMS Ford Motor Co.,
    2000-Present
    Adds head of Corporate Strategy title at Ford 2005-2006
    JOHN DEANE Medpartners,
    1997-1999
    Wendy’s International,
    2001-2005
    Exec. VP North American Operations, Wendy’s 2005-2006
    JAMES BRACE United
    Components, 2004-
    2005
    CFO, Wells-Gardner Electronics 2005-Present
    JEAN STRICKLAND Seacoast National
    Bank, 2002-2005
    President and COO, Seacoast National Bank 2005-Present
    JOSEPH SIEBERT Viacom, 2002-2003
    GSI Commerce,
    2003-2005
    COO, Home Decor Products 2005-2006
    CARL DILL McDonald’s,
    1984-1998
    AOL Time Warner,
    1998-2001
    Chairman and CEO, Technology Solutions Co. 2005- 2006****
    DEBORAH DINSMORE Sterling Bank,
    2001-2006
    Director of Operations, Sterling Bank 2006-Present
    RHONDA BASSETT-SPIERS BEA Systems,
    2000-2006
    COO, Control4 2006
    GREG CARMICHAEL Fifth Third Bancorp,
    2003-2006
    COO, Fifth Third Bancorp 2006-Present
    ROY BRICKER Pay-by-Touch,
    2005-2006
    COO, Element Payment Services 2006-Present
    MARGARET THOMAS Newton-Wellesley
    Hospital, 2001-2006
    VP Services, Sentillion 2006-Present
    JOHN MURDOCK GMAC Insurance’s
    MIC Group,
    2001-2006
    President, Systems Task Group 2006-Present
    MARC KATZ Foot Locker,
    2002-2006
    CFO, A.C. Moore 2006-Present
    JAMES MACDONALD State Street Bank,
    1996-1998
    Fidelity (two
    business units),
    2001-2006
    Partner, Computer Sciences Corp. 1999-2000
    COO, Athenahealth 2006-Present
    JOHN BOUSHY Harrah’s
    Entertainment,
    2001-2004
    Chief Integration Officer, Harrah’s 2004-2006
    President, Ameristar Casinos 2006-Present
    BILL PIERONI Aon Corp., 2005-
    2006
    VP Operations, State Farm 2006-Present
    SHAWN
    FARSHCHI
    DHL Airways,
    2000-2001
    BroadVision,
    2001-2002
    WebEx, 2002-2006
    COO, Coremetrics 2006-Present
    JOHN LATHAM Markel Corp.,
    2004-2006
    Sr. VP Operations, Markel 2006-Present
    WENDY CEBULA VistaPrint, 2000-2006 COO, VistaPrint 2006-Present
    STEPHEN DAVID Procter & Gamble,
    2000-2006
    CEO, Iomega 2006
    ELBERT SIMPSON PSEG Services,
    2002-2007
    President and COO, PSEG Services 2007-Present
    ED HARBACH Accenture,
    1998-2000
    COO, Accenture-Japan 2000-2003
    Head of Client Satisfaction and Quality, Accenture 2003-2004
    President and COO, BearingPoint 2007-Present
    PRESTON BRADFORD Sapient
    2000-2007
    Chief Operations and Administrative Officer, Sapient 2007-Present
    GUI KARYO Marvel Entertainment
    2003-2006
    MediaBay, 2006-2007
    VP Operations, Majesco Entertainment 2007-Present
    RANDY MCGARRY BSC Services Corp.
    2003-2007
    COO, BSC Services Corp. 2007-Present

    Next page: Mark Cameron, COO, VantageMed

    MARK CAMERON
    COO, VantageMed

    Formerly: CIO, VantageMed
    How He's Done: Cameron, 51, joined VantageMed as CIO in early 2005, and three months later was promoted to chief operating officer. He still oversees internal information technology at the health-care software vendor, as well as product development and customer services. It's a big job, especially in a turnaround situation.

    VantageMed had purchased 26 companies from its inception in 1995 to 1999, "but did a poor job of integrating them," Cameron says. "There were a number of areas where we were spending too much money. We had to figure out how to best apply resources and where we didn't need resources."

    The "we" refers to Cameron and VantageMed chief executive Steve Curd. The two have worked together for 20 years, starting in I.T. at American Airlines in the 1980s. They also teamed up in the late 1990s at HealtheonWebMD, where Curd was COO and Cameron oversaw technical services. Three months after Curd took over as CEO of VantageMed, he coaxed Cameron aboard.

    Cameron and Curd combed VantageMed's product line, looking to kill unprofitable software and services. They culled products built on older server technologies, for example, and reduced the line to Windows-only software. In 2005, the last full fiscal year reported, gross margins on software topped 63%, up from 49% in 2004.

    Yet, VantageMed is still looking for its first profitable year. "We took it on to turn it around," Cameron says. "We've got everything positioned properly. Now, we'll do what we need to grow."

    Next page: Dawn Lepore, CEO, Drugstore.com .com">

    DAWN LEPORE
    CEO, Drugstore.com

    Formerly: CIO, Charles Schwab & Co.
    How She's Done: Drugstore.com has yet to book a profitable year. But the nine-year-old health and beauty company may finally become profitable in 2008, analysts say. If so, a lot of the credit will go to Lepore, who joined Drugstore.com in 2004 and has helped drive up the company’s average customer sale by $4, to $78 in 2005 from $74 in 2003.

    Lepore, 52, evidently has the board’s confidence. In early January, it gave her a retention grant of stock options along with a $50,000 raise, to $400,000 from $350,000. The company declined requests for interviews.

    Lepore, who oversaw information technology as CIO and vice chairman for 11 years at Schwab, isn’t the first former CIO to lead Drugstore.com, an Internet company created just before the dot-com bust. Her predecessor, Kal Raman, rose from Drugstore’s chief technology officer to COO to CEO during his six years there.

    In remarks to financial analysts late last year, Lepore said she considers I.T. a necessary investment for her Web site. “To me, this is our store,” she said. “So, just like a brick-and-mortar store continues to invest and remodel, we have to continually add to our Web site. That’s how we continue to delight our customers. It’s important we pay attention to that.”

    Next page: Lloyd Devaux, COO, BankAtlantic

    LLOYD DEVAUX
    COO, BankAtlantic

    Formerly: CIO, BankAtlantic
    How He's Done: DeVaux, 54, has planned his career with care. He took his bachelor’s in electrical engineering to the oil business, where he worked in computer exploration of oil fields. Next was IBM, where he scoped custom applications for clients for six years. Along the way, he got an M.B.A., thinking the finance skills would enhance his value.

    During his seven-year stint as CIO of Union Planters, a Memphis, Tenn.-based bank, DeVaux fashioned himself as a consultant, talking with loan managers, retail bankers and other operating groups about their plans and how he could help with technology. When he moved to BankAtlantic in 2001, he says, he came with the understanding, though no guarantee, that the COO position would be his to earn.

    “After you move from a pure technology CIO to a tech-business bridge, the next logical step is to move over to the business side,” he says. Now, with more than two years in as COO, CEO is his next goal. But he’s cautious, saying he needs several more years leading operations before he can feel ready to make the leap.

    To other tech executives who want to climb, he advises picking up profit-and-loss responsibilities at some point, to demonstrate that you can be accountable for results. Also, cultivate a successor for your current job, so when upper management looks at you for a promotion, DeVaux says,“They can say, ‘He’s ready and now’s the time.’”

    Next page: Maynard Webb, CEO, LiveOps

    MAYNARD WEBB
    CEO, LiveOps

    Formerly: CIO, Gateway; COO, eBay
    How He's Done: He’s a freshly minted CEO, joining LiveOps in December, but Webb, 51, doesn’t plan to change much about his management style or view of business. Webb has a long history as a CIO, having held the job at Bay Networks and Gateway. He led the technology division of eBay for three years, and then managed operations there for four more.

    “I don’t think people saw me as only the tech guy,” he says. “One thing I’ve worked with my teams on—and I’ve said this here already—is, how do I make sure no one in the same circumstance with the same dollars can do it better?”

    That outlook meshes well with the core concept behind LiveOps, a venture-funded callcenter hosting company in Palo Alto, Calif. LiveOps provides customer support operations to companies, using 9,000 agents who work at home, connected via the Internet. The company trumpets itself as a domestic, reasonably priced alternative to outsourcing call-center operations to India.

    That mandate calls for ruthless efficiency. As Webb puts it, “I’m a huge fan of making and keeping aggressive commitments.”

    Webb says his technology background makes him more understanding than the average CEO of the struggles I.T. faces to deliver projects. “But,” he adds, “I’m probably scarier as their boss because in many cases I’ve done their job and done it at scale, and I’m not interested in not having it done well at this scale.”