In September, Blockbuster CEO Jim Keyes hired two executives who worked for him when he was CEO of 7-Eleven: Keith Morrow, as Blockbuster's new CIO, and David Podeschi, as the Dallas-based DVD rental chain's senior VP of merchandising, distribution and logistics.
CEOs often hire executives who've worked for them in the past because that enables them to roll out their new business initiatives more quickly, according to Sam Gordon, director of Harvey Nash Executive Search's CIO practice. "Having tried-and-tested people they've worked with before could be very healthy because they understand each other's personal dynamics," he says. The downside, of course, is the troubling whiff of cronyism that can make establishing relationships with existing staff harder for the new executives.
"Normally, when a new executive joins an organization, they spend their first few months establishing relationships and getting the lay of the land," says Gordon. "Executives brought in by others may feel they don't need to invest as much time doing that because they've already got the backing of the top person." In fact, says Gordon, to be successful in such a situation, CIOs have to work even harder to earn the trust of existing executives and staff because they have to work against a preconception. They can't take for granted the support they have from the CEO. Nor can they be as heavy-handed or hard-nosed as they want. They need to be mindful of the political and organizational culture in which they're working. They also need to realize that existing staff may be reluctant to open up to them because they know the new CIO has a direct line to the CEO.
"They have to spend more time developing relationships," says Gordon. "In some ways, they have to prove themselves more to people internally than they do to their boss."
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