Rules of the Road for Turnaround CIOs

FIRE AND HIRE RIGHT. Retrenchments and firings are a staple of turnaround situations. However, CIOs should try to retain the staffers that give them the best chance of success. On day three of his new job at IAA, Nordin called a meeting to remind his staff that the IT shop does not generate revenue and therefore is a service to the company. "We are here at the pleasure of the business. So you better be service-oriented," he told the IT staff. "If you don't agree with me, you better get over it."

Creating the right staff also means hiring the right people. Deasy says one of his most important steps in turning around Tyco IT was hiring IT managers with a "turnaround attitude". When interviewing to fill three divisional CIO positions, he looked for managers who could walk into a situation in which they had no one to call and no documentation of IT systems or data - people who could say to themselves: "I am the staff; I write my own PowerPoint briefings and write my own spreadsheets", Deasy says. "I'm looking for a mental toughness, and like the Wild, Wild West; they must like a little bit of chaos and not be afraid of that."

STAND UP FOR YOUR STAFF. While serving as a top IT manager in the US Navy and as CIO for the Office of Naval Research, Moon learned that a leader needs to be approachable so that people have the freedom - and comfort - to report problems. Moon tells his LeapFrog staff the story of how a captain whom Moon knew in the Navy ran a guided missile cruiser over a large submerged rock, injuring several crew members. Sailors on the bridge suspected the ship was headed for the rock, but they were afraid to tell the captain to change course for fear of being wrong. Moon says he wants his staff to tell him their opinions and help him make the right decisions. "The important part here is that they are confident in their knowledge that if they make an honest mistake, I will support them," he says. "I also learned in the Navy that if you take care of your people, they will take care of you."

Deasy follows a rule of keeping IT staffers "out of the line of fire" - that is, corporate politics and the various agendas in the company. Deasy says he wants IT managers focused on executing day-to-day operations, not distracted by trying to get buy-in or hearing different opinions of what must be done. "If they're dealing with that stuff, we're not moving the needle forward," Deasy says.

GET THE TECHNOLOGY RIGHT. With a premium on moving fast, turnaround CIOs may believe they don't have time to test whether new systems or processes work. In actuality, it is more important than ever to make sure systems are workable. New failures will only create more delays, and morale, already low, will only get worse.

Nordin found this out the hard way by not sufficiently managing IAA's switch to Microsoft Active Directory. The changeover was the first production shift Nordin implemented. But a glitch prevented employees from accessing the main order entry system. Because changes had not been logged, the staff did not know what to undo.

If these six steps toward accomplishing a turnaround sound like they would be useful in your organization, you're not alone. EDS's Feld, who is one of the deans of CIOdom, estimates that six out of every 10 CIOs should be applying turnaround methods - even if they don't face a classic turnaround situation. "These CIOs have a good set of skills that would be applicable in almost any company," he says, "whether a turnaround company or one that is more stable."

SIDEBAR: Do You Have What It Takes?

The personality traits that distinguish turnaround CIOs

Like the steely-eyed hired gun brought in to clean up the riff-raff, turnaround CIOs typically display a take-no-prisoners attitude. But some of their other personality characteristics are surprising.

For sure, turnaround CIOs tend to have confidence and a clarity of thought. They are certain about what works, what doesn't and what is needed for a quick result.

You can hear it in the words of Robert Moon, CIO at LeapFrog: "I know what the risks are, and I'm not afraid to take risks. The only way to not make mistakes is not to do anything."

If you are a turnaround CIO, "you are highly prescriptive, you are not a patient listener, and you have a sense of urgency and metrics and a sense of commitment to task at the high end of the scale", says Stephen Mader, vice chair of executive search firm Christian and Timbers. "There's no egalitarian environment in that kind of case."

With that sense of urgency comes a laser-focused set of tactics to quickly fix an IT snafu, says Brad Brown, director of the business technology office at the McKinsey & Company consultancy. "This person will have deeply felt beliefs about how you manage business alignment operations," he says. "He has a model in his head that goes very deep on how to identify the five or 10 key problems."

Turnaround CIOs have no problem firing IT staffers and managers if needed - and often, it is needed. It's for the greater good of the company.

What's unexpected, perhaps, is that turnaround CIOs tend to devote significant time to taking care of their IT staff. In Jeff Chasney's case, that means publicizing a code of ethics that everyone can live by. One of his first acts as CIO at CKE Restaurants was to tell employees what he viewed as the three most important aspects of their lives: health, family and career - in that order.

John Nordin, CIO of Insurance Auto Auctions, met with every one of the 65 members of his new IT staff, shaking hands and trying to put names to faces. "It might sound trite but when CIOs are replaced, people are scared because there is so much uncertainty and doubt," he says.

Perhaps that points to a sound business reason for turnaround CIOs' concern for their people: Overly anxious IT staffers aren't focused on the tasks at hand - namely, fixing IT and getting back to business.

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