Grooming the next generation of IT leaders

Until recently, many CIOs hadn’t given much thought to succession planning, thanks largely to a weak economy and low staff turnover. “People were lulled into a sense of complacency over the last five years, as there hadn’t been much job movement,” says Bill Homa, CIO at Hannaford Brothers Co., a Scarborough, Maine-based grocer.

But that’s starting to change. The economy is gaining strength, and turnover is edging up. More important, many CIOs are recognizing that they need to actively develop the next generation of IT managers and technical leaders as thousands of experienced baby boomer IT professionals near retirement age and U.S. colleges and universities churn out fewer computer science graduates.

“Ten years from now, we’re going to be facing a big gap” in supply and demand for IT management and technical skills, says Maria Schafer, an analyst at Gartner Inc.Ten years from now, we’re going to be facing a big gap in supply and demand for IT management and technical skills.Text Senior management at most U.S. companies has done a poor job of succession planning — not only within the IT ranks but throughout most corporate departments such as finance, customer service and human resources, says Schafer. “We just don’t think in long-term horizons in the U.S. as they do in Japan and Germany,” she adds.

Still, some forward-thinking companies, like General Electric Co., have had succession management programs for years. “We place succession planning as an integral part of our leadership development process,” says Chris Perretta, vice president and CIO at GE Commercial Finance in Stamford, Conn.

Under a formal review process that’s done for all GE employees each spring, managers conduct an exercise known internally as “Succession C,” in which a rigorous, written succession plan is put together for each worker, says Perretta.

GE Commercial Finance has a succession plan for each of its 1,200 IT workers, he adds. At the CIO level, Perretta and other executives are constantly assessing IT directors and other potential candidates for attributes such as curiosity, business focus and high energy levels. To help develop its next set of IT and other corporate leaders, GE developed a short-term international rotation program more than 10 years ago to move workers among various geographic locations in order to give them “tangible international experience,” says Hank Zupnick, CIO at GE Commercial Finance Real Estate, a division of GE Commercial Finance, also in Stamford.

Detroit-based DTE Energy Co. launched a corporate succession-planning effort three years ago. The program was started following an executive repositioning in the wake of DTE’s merger with MCN Energy Group Inc. and an early-retirement program that was more popular than expected, says Lynne Ellyn, senior vice president and CIO at the diversified energy company. As part of the effort within DTE Energy’s 800-person IT department, Ellyn and other executives regularly review positions that are critical to the ongoing operations of the business, ensuring that there’s a “farm club” of talented IT professionals to fill critical positions as needed, she says.

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Ellyn also has “a very detailed succession plan” for her own role. She has identified several IT directors as candidates to replace her — a list that has been reviewed by DTE Energy’s executive committee “so that it’s well known,” she adds.

Real-World Testing

Dan Demeter, Korn/Ferry International’s CIO, looks for ways to try out his succession scenarios. “When I go on vacation, I put different people in charge,” says Demeter, who manages a 60-person IT staff at the Los Angeles-based executive placement firm.

At other times, Demeter distributes his responsibilities among various IT directors and grants executive authority to one person. All this helps ensure that his management team will be ready to step in when needed.

For some IT managers, succession management within the IT organization isn’t strictly a hierarchical exercise. For instance, when Marriott International Inc. considers candidates for an opening within its 1,200-person information resources department, “we look across the organization, not necessarily down and up,” says George Hall, senior vice president of human resources for the IT group at the Bethesda, Md.-based hotel operator. By looking only vertically through the organization for the right person, he says, “you may be limiting your resources as to who may be the most effective person to step into that role.

“Because some technicians want to take on leadership roles within their domains without having to become managers, Marriott has put together a leadership track and a technology track for its IT organization. People in the technology track can grow into a number of roles that lead up to the vice president level in terms of compensation, says Hall.

Like GE, Marriott also offers rotational assignments for IT and business workers alike. For example, one of its senior IT managers recently moved into a corporate HR role while a member of the finance department transferred to the IT department to work on financial applications, Hall says.

In addition to rotating IT and business personnel, Hannaford Brothers’ Homa says he likes to place people in roles “outside their comfort zones” to help them grow professionally.

For instance, the person who had been overseeing the grocer’s Windows NT operating system group wanted to develop more managerial experience. So Homa recently placed him in charge of the company’s IT support center, where he’ll be managing more personnel and responding “to a lot more problems,” says Homa.

Truman Medical Centers Inc. recently launched a leadership pipeline program to identify people who are ready to move into roles with greater responsibilities. In addition to handling their usual work, the 11 people who were selected have each been paired with an executive mentor and have been asked to oversee a strategic project that was hand-picked for them by the company’s CEO, says CIO Bill McQuiston.

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The Kansas City, Mo.-based health care provider has also established leadership programs to identify “raw talent” in the organization and to help existing leaders address deficits in skills such as communication or presentation that might keep them from cracking the executive ranks, says McQuiston.

Harder Than It Looks

As essential as IT succession planning is, it’s also fraught with challenges. The first concerns the demands of technology itself. For example, DTE Energy needs IT workers who have a deep understanding of a particular technology, says Ellyn. But that focus can leave someone “inadequately equipped to



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