Ensuring Success for Successors

I recently looked at 105 large U.S. companies that installed new chief information officers over the past four years. Nothing scientific, but I wanted to get a sense of what big companies do when they have to fill an empty CIO job. I found that 42% of them promoted from within. Not bad.

Still, the other 58% hired an outsider to lead technology, which indicates that today’s practices in CIO succession planning aren’t working well.

Of course, no one wants to dwell too long on his or her departure. It’s like writing a will: It may be the right thing to do, but it’s still kind of creepy. Yet corporate officers, including CIOs, should plan what will happen when they leave. It’s just good solid management.

Current CIOs are trying to do it, says Paul Groce, a partner at New York recruiting firm Christian & Timbers, but they often do it wrong.

“CIOs, when counseling the CIOs of tomorrow, are guilty of suggesting to people that they take career paths that mirror their own,” says Groce, who specializes in placing senior technology executives. “Five years later, when these people are ready to move up, the model has changed.”

By 2010, CIOs will have to be all-around general managers with business, operations, international and human-resources expertise, he says.

The Computing Technology Industry Association, a trade and education group, says its research shows that employers no longer give much guidance to tech employees about what skills to develop. Companies are missing out on a chance to mold these people to do better work for them.

This is a byproduct of general uncertainty in I.T. about where the profession is going and what companies want from technology. And let’s be realistic: “What companies want” refers to what chief executives want.

It might be tough to hear, but maybe the chief executive doesn’t want a carbon copy of you for his next technology leader. The company bobs and weaves with business shifts, and it could be that your skills won’t be appropriate for the business as the CEO envisions it five years from now.

To prepare a successful successor, today’s CIO should give his promising underlings experiences he himself may not have had. International experience, for example—working, living and breathing outside the United States.

Diverse experiences across the business, including profit-and-loss responsibility for a unit or group, also appear to be desirable, judging from some recent CIO appointments at Procter & Gamble and other large firms. CEOs also admire the ability to break down an organization and rebuild it better. So, give superstars a chance to reengineer a process, such as sourcing or supply chain.

Technology managers with those sorts of smarts will be better able to step up to the CIO role when there’s an opening, perhaps obviating the company’s need to hire a recruiter like Groce.

Look at companies revered for growing top execs. They have a good record, too, for hiring CIOs from within.

At General Electric, Gary Reiner was promoted to CIO a decade ago, having spent five years leading business development and a Six Sigma quality initiative. Before GE, he was a partner at Boston Consulting Group, streamlining business processes at tech companies.

Steve Squeri became CIO of American Express last year, after 20 years in its operations and marketing units. He led development of the company’s automated teller machine network and oversaw global credit card operations.

Procter & Gamble appointed Filippo Passerini CIO in 2004, when Stephen David announced he would retire from the position, which he’d held for six years, in 2005. Passerini, age 48, has worked his whole life at Procter & Gamble technology, in many geographic areas (Italy, Turkey, the U.K., Latin America) and in different business units, such as beauty care, marketing and supplier sourcing.

Finding out exactly what your CEO wants to see in a future CIO will help you plan for the day you leave. And understanding those wants may even help your career while you’re still there.

Kim S. Nash is senior writer at Baseline. She can be reached at [email protected].