Mike Hugos followed a fairly conventional route to the CIO’s office, gaining experience and credentials through a series of all-IT positions. After working as a programmer-analyst, he started a systems design and software development business, and then went into corporate IT, with a side trip in IT consulting.
But when it came time to round out his skills in graduate school, Hugos looked outside IT, opting instead for an MBA with a concentration in finance. “I feel very strongly that CIOs need to have an MBA, not a master of computer science (degree),” says Hugos, CIO of Network Services, a multi-billion-dollar distributor of basic goods.
“Business is not about technology; it is about using technology to make money. I find that most IT people simply do not understand that,” says Hugos. “They often look down on simple solutions and instead engage in complex, expensive projects that in the end don’t deliver. Business needs solutions, not cool technology.”
The argument over the best mix of skills and experience for the corporate CIO is likely to continue as long as the job exists. Witness the flood of responses to Jerry Gregoire’s recent column, “The Vanishing IT Department,” in which he asserted, “CIOs with no formal training or long-term experience in IT are not CIOs.”
While there’s no optimal model for the job, CIOs and expert observers generally agree that what’s needed is a combination of IT and business knowledge and experience. But there is a consensus that without business skills and the ability to translate IT into business terms, IT heads are at a disadvantage — no matter how good their technical skills are.
In “The State of the CIO 2004” survey, 70 per cent of the 540 respondents said their primary job experience leading to the CIO spot was in IT. Consulting and business operations were each cited as primary job backgrounds by seven per cent and finance-accounting by five per cent.
But while IT was the most common primary job experience for survey respondents, many said they had job experience in other, non-IT fields: 62 per cent in consulting, 45 per cent in non-IT business operations, 34 per cent in administration, and about 25 per cent in each of the areas of customer service, engineering, and finance or accounting. This data shows a significant amount of non-IT business experience — a far cry from the almost all-IT CIO track of past decades.
The increase in CIOs from non-IT backgrounds is “a paradigm shift,” says Ellen Kitzis, Gartner Executive Programs’ group vice-president for the Americas. “Thirty to forty per cent or more in our service (clientele) don’t have a traditional IT background, but a business background.”
At the same time, she says, “I expect a bit of a pendulum adjustment. There’s something about being a good technologist that’s key to being a good CIO.” The debate over job background boils down to this, Kitzis says: “What combination of training and experience best prepares a CIO to put IT to productive use?”
It’s the business, stupid
A typical summary of CIO job requirements includes an in-depth understanding of IT, some serious business experience and the ability to explain technology in business terms.
“A CIO first has to be a businessperson who understands the mission of the business, can suggest automation solutions that support that business, and can also provide C-suite advice with respect to the possibilities and limitations of technology,” says John Wade, vice-president and CIO of Saint Luke’s Health System Inc. Wade’s CV is highlighted by IT experience in the manufacturing and health care sectors, and a stint in IT consulting.
An increasing number of organizations are looking to CIOs to help determine their overall strategic direction, according to Mark McDonald, group vice-president and head of research for Gartner Executive Programs.
Citing Gartner data, McDonald thinks that many CIOs see their roles as moving beyond providing basic IT services to managing business processes that affect bottom-line performance, innovation and delivering business services.
The tech-MBA and other hybrids are standard academic fare, and few straight MBA programs ignore the business uses of IT, so there’s no lack of executive timber with roots in both worlds. And executive training courses can fill in gaps for both business and IT specialists.
But at the CIO level, a diploma isn’t enough; you need a track record, says Rich Brennen, global leader for the CIO practice at executive search firm Spencer Stuart Management Consultants NV.
“I don’t think I would (equate) the word ‘MBA’ with business skills,” Brennen says. “An increasing portion of top CIOs have MBAs, but school isn’t the same as business experience.”
How to gain the skills you lack
CIOs who come up through the IT ranks typically gain business experience by managing operations or development, serving as CIO of a business unit, or acting as a liaison between business and IT groups, according to Peter Weill, director of the MIT Sloan School’s Center for Information Systems Research.
To round out their portfolios, these IT-minded CIOs often need training in finance — from the basics of budgeting to the vagaries of option pricing, and mergers and acquisitions. They also usually benefit from a better grasp of career development — their own and their staff’s.
On the flip side, executives lacking serious IT experience are moving into CIO positions. “We’re seeing more people who have a line-of-business background assuming the role of CIO. It’s more of a COO type, a non-technical person who has come to be CIO through running a line of business that’s had a lot of technology in it,” Weill says. “A number of organizations are (putting) the CIO position on the executive development path.”
This approach gives promising business managers the option of aiming for CIO and makes IT a core component of learning the overall business, rather than an isolated specialty. As a result, notes Weill, there are now many more paths to and from the position of CIO.
Some CIOs have hit upon unique training arrangements. In addition to the several technology and management courses she tries to enroll in each year, Coco Kagan, CIO and senior vice-president at Sunrise Senior Living, has arranged some one-on-one consulting. “I convinced the executive team that I need an adviser, and I hired my old CIO, who had retired. It’s an ongoing mentoring relationship,” says Kagan, who started out on the operations side of the hospitality business and moved over to IT.
Bob Wittstein, vice-president for IT and CIO at Sappi Fine Paper North America, has a mechanical engineering degree and a professional background in manufacturing technology, supply chain and IT project management. His continuing-ed curriculum has been composed of general management courses, but he plans to enroll in finance courses in the future.
“It’s a matter of getting the financial expertise to be able to look at a balance sheet to understand what the trends are telling you and where to go looking forward, and take it that next step to apply it to the decision-making process,” he says.
Macroeconomics can predispose the CIO’s employer to look for certain skills. “During the downturn, there was obviously a premium on those IT leaders who were adept at cost avoidance,” says Mark Polansky, North American-sector leader for the IT officers practice at recruiting firm Korn/Ferry International.
But CIOs are expected to be able to handle both lean and fat years, plan long-term IT strategy and contribute to the organization’s overall direction.
CIOs can also benefit from time behind the lectern. “An excellent way for CIOs to learn, acquire a balanced perspective and sharpen presentation skills is to teach,” says Jim Nanton, CIO of Sara Lee Branded Apparel, who has been a guest lecturer at Wake Forest University. Nanton’s work experience includes a decade in financial services IT and divisional CIO positions.
The “I” in CIO
There are pitfalls in emphasizing business skills at the expense of core IT, cautions Gartner’s Kitzis.
For example: “If you don’t have deep core competencies in technical skills or the ability to understand which of the current competencies you need, there may be a tendency to devalue those (IT) skills and make the decision to outsource way too quickly,” she says.
But when CIOs have the proper grounding in both technology and business, Kitzis says, “There is an opportunity for IT not just to enable or contribute to business success, but to present IT initiatives that actually drive the business.”
And pulling that off requires a command of both technology and the complex social interactions of business. “Business and political savvy are as important (as) — if not more than — technical savvy,” says Richard Eshbach, CIO and director of information services for Mountain States Health Alliance. “If you don’t know how to deal in that environment, you’re dead.”
Ted Smalley Bowen ([email protected]) is a Boston-based freelance writer covering technology and general interest topics.