From CIO to CEO

Does the board respect the CIO’s viewpoint? Are CIOs seen as ‘big picture’ people? Does the board see the CIO’s role as purely a technical one? Could a CIO ever be CEO? According to a recent survey, 54 per cent of CIOs have aspirations to use their role as a gateway to general business management positions, and many consider themselves as a contender for future chief executive.

The Future Role of the CIO — Becoming the Boss survey, undertaken late last year by market research company Vanson Bourne on behalf of IT software supplier CA Technologies, covered 685 interviews across Asia-Pacific, Australia, Europe and the United States. It also looked at the careers of a similar number of CEOs. The survey — which, it must be admitted, is highly partisan (and frankly repetitive) — suggests that CIOs “have the necessary business acumen, commercial ability and people management expertise to add considerable strategic value to the business and its shareholders”.

Addressing the company board and CEO, the authors of the report say, “Now is the time to reconsider the out-dated belief that CIOs are not equipped for high-level management and explore a new way of thinking about who is best placed to become a business leader of tomorrow. Affording your CIO the opportunity to advance towards becoming the boss could be the best strategic decision your business can make.”

Considering the apparent expectations of a majority of CIOs, how realistic is it that CIOs have the ‘right stuff’ in the first place, and the opportunity on the second, to make the transition to the CEO position?

Certainly when any CIO does successfully make that move, the result is widely touted in the IT press. Such global figures as Philip Clarke, CEO of UK supermarket chain Tesco; John Glaser, Siemens Health Services; and Rob Fyfe, Air New Zealand, have all been mentioned.

But the reality is that these ex-CIOs are few and far between. Despite the 54 per cent aspiring to make the move, only about 4 per cent of CEOs in the world’s top companies previously served in a technology leadership role. They are easily outnumbered by CFOs (29 per cent of CEOs) and COOs (23 per cent).

Thereby hangs a tale. Many — if not most — of the CIO to CEO success stories involve people who have moved through a variety of C-level positions.

Rob Fyfe, for example, joined Air New Zealand in early 2003 as CIO, and led its business transformation team. Only months after, in October of the same year, he was appointed CEO. His role as CIO of the airline was the only IT management role he had held, previously working in marketing, operations and general management with such organisations as the Bank of New Zealand, ITV Digital, NAB and Telecom NZ.

Many of those who make the transition do so in IT-based firms. The CA/Vanson Bourne report says that the progression to the top job is more likely in manufacturing (11 per cent of CEOs) and highly unlikely in finance (1 per cent). Even though finance may be entirely dependent on IT, this does not seem to be a factor.

The ambition of CIOs to be at the top of the management pile is not new — it’s been around as long as ambition has been a factor in any career plan, and as long as those in professional positions see the typecasting of the holders of particular job titles as changeable and the glass ceiling as breakable.

So what are the barriers to the CIO to CEO transition, and what can you do about it, assuming you want the job in the first place?

What did I do wrong?

In a much-cited blog that appeared in Forbes.com in 2010, Joerg Heistermann says, “CIOs love technology. It’s a hobby, a passion and a secret lover.”

Heistermann is former CEO of the Americas for IDS Scheer and before that was CIO of a pan-European mail-order company. He goes on to suggest that, for CIOs, “At work, technology is used to improve productivity and revenue.

At home, the latest mobile and multimedia gadgets are the centre of gravity for leisure activities.

“It’s the exclusive focus on this very passion that inhibits CIOs from growing into a CEO role to get to the next level.”

He goes on to also suggest that, “For many CIOs, IT budgeting is the bane of their existence. Budgets prevent them from doing what they might want to do and put them in the hot seat if business demands exceed the budget.”

If even a former CIO characterises senior IT managers as acquisitive nerds and geeks without a proper appreciation or even ‘love’ of the bottom line, then what hope does the CIO have in convincing the board that they have what it takes?

In a different and curiously titled blog called ‘What I’ve learned as a CEO working for a CIO’, Adam Brotman, chief digital officer for Starbucks, says, “When you can combine the CEO-like raw vision and passion with CIO-like detailed planning around implementation, scale and design, it’s a much more powerful initial vision and one that’s even more likely to succeed.”

Ironically, it’s this eye for detail that some regard as a stumbling block for CIOs’ move upwards. Not that planning around implementation is a bad thing — far from it. It’s just that many other C-level execs and board members think that’s all that CIOs can do. Despite the apparent desire of CIOs for more money to “do what they want to do”, many see CIOs as risk-averse, and when running a company, risk is an intrinsic element in the arsenal of any leader. If you don’t risk, you may not fail, but you also don’t move.

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In the CA Technologies survey, Jacob Lamm, the company’s executive vice-president for strategy and corporate development, says that “modern CIOs are not just technologists”. For many non-IT executives, the CA report says, “The idea still lingers that the CIO is an enabler rather than a driver, someone who gets things done for others rather than shaping the ethos of the company and steering it forward.”

This technology orientation is intrinsically linked to the often-used description of IT as a “service provider”. This, despite its positive connotation, puts IT at the edge of the organisation. The person who delivers milk to your door is a service provider; while he or she might help you decide how much milk you need, he or she doesn’t live in the house and help you with your mortgage.

Ironically, again, for a report that espouses the ‘not-just-a-technologist’ view of the modern CIO, the CA Technologies report puts a great deal of emphasis on Cloud computing as the key to the executive suite. CA Technologies being heavily involved in Cloud computing may be relevant, but it may be a bit strong to suggest, as it does, “The catalyst for change is Cloud computing. … Most CIOs are finding that because of the Cloud, they’re now being called upon to develop and exercise a range of core business skills they wouldn’t have needed a decade ago — they’re already effectively CEO training on the job.”

Of course, outsourcing has been around for a while, and CIOs’ need to manage the relationship is nothing new. The Cloud is an important element in modern business technology development, but to suggest that it is the prime key to opening the door might be considered a tad overenthusiastic (and partisan) and in fact continues to retain the image of CIO as a techie.

“Gentlemen and ladies, the Cloud is here to stay and it’s going to save the company,” says the CIO in his or her presentation at the next board meeting. “In the most basic infrastructure-as- a-service (IaaS) Cloud service model, Cloud providers offer computers (as physical or more often as virtual machines), raw (block) storage, firewalls, load balancers and networks. IaaS providers supply these resources on demand from their large pools installed in data centres. Local area networks (LANs) including IP addresses are part of the offer. For the wide area connectivity, the internet can be used or — in carrier Clouds — dedicated virtual private networks can be configured.”

“Thank you very much,” says the largely IT-illiterate board. “You can go back to your cave now, and we’d love to hear more about the Cloud/virtualisation/IaaS when you can tell us what it means.”

The best way to move up and make yourself and your potential contributions understood and appreciated is to stop being the provider and start being a player.

What can I do about it?

The following key actions have been suggested if you want to climb to the top job:

li>Build internal influence
• Embrace uncertainty
• Visualise your company’s success
• Go global
• Step outside of your current responsibilities
• Break the chains with broader experience outside of your current position
• Develop your network
• Pick your battles
• Build your team
• Delegate.

All well and good, except that this list was intended for CFOs who want to be CEOs (published in CIO’s sister online publication, CFO World). If CFOs are being offered the same sort of advice as CIOs, then the race is truly on.

But is there any advice that can be specifically targeted at IT managers as opposed to those in charge of finance, and presumably also marketing, operations, etc?

A report by recruitment firm Korn/Ferry International, CIO to CEO by Mark Polansky and Simon Wiggins, says there are “surprising differences in the ways CIOs and other C-suite executives approach crucial leadership issues”. The report says, “These differences form the core of a very real challenge facing technology executives moving into general management and ultimately aiming for the topmost corporate ranks.”

But this is not insurmountable.

According to the report, “Fortunately for CIOs, new behaviours can be learned and adopted. Armed with the proper knowledge and support, CIOs can effectively groom themselves for promotion.” The most important bit of advice is to ‘think big.’

This means that long-lived mantra of “aligning with the business”. Conferences 20 years ago had “aligning with the business” as their theme, including conferences for CFOs. But “aligning” doesn’t mean being the business; it means running alongside it. It means organising your activities so they are not a mismatch with the requirements of the organisation. It means providing services (and future services) that are relevant for and desirable by the organisation. If you can do this, it does mean you understand what the business is and what it requires. It doesn’t mean you are the business. You are a service provider.

Services give your organisation solutions and hopefully advantages, but you have to pay for them. Wherever something costs money, you have to do a budget to see if you can afford the services. And as has been stated, budgets are the bane of CIOs, as they “prevent them from doing what they might want to do” and what they feel they see is necessary. As the Korn/Ferry report says, quoting Dennis Jones, one time CIO at Federal Express and later COO and CEO in financial services firms: “When making the move to CEO, the hardest thing for a CIO to learn is to think in terms of profits and loss, rather than costs.

“When you have a cost centre mindset, you are viewed by others as functioning in a supporting role rather than a strategic one. But a CEO needs to be proactive and to expect results. A CEO needs to figure out how to grow a business and understand its key drivers.”

The report goes on to suggest that C-suite executives “share most of the behavioural qualities that are generally held as critical for success in business. Technology executives diverge from the pack in small but significant respects”. The most obvious differences between CIOs and other top executives, the report says, are the speed at which they arrive at decisions when placed under pressure, and the manner in which they communicate their decisions to the people around them.

If CIOs talk about Cloud computing in terms that the board doesn’t understand, then the opportunity to position yourself as understanding the business is lost. If you can’t talk the talk and walk the walk, then forget it.

Many CIOs really don’t want to be the CEO; they’re comfortable and happy doing what they do. But whether they continue to be CIO, or seen to be the right person for that job, in those circumstances is up to others to decide.

For those who do want to make the move, the CA Technologies report says, “CEOs with an in-depth knowledge of technology backed by sound commercial acumen have the ability to transform the next generation of business. But having the ability isn’t the same as getting the chance, and in order to influence the boards, it’s critical to be visible. CIOs need a strategy where they can adopt a position that the business and C-level colleagues need to listen to.”

It goes on to quote Cathy Holley, a partner with UK executive search company Boyden: “Finance directors and sales and marketing directors are known to be confident and articulate, and generally have more opportunity to network with the CEO. When it comes to the CEO identifying his or her successor, his mind will be drawn to this and the ‘unsophisticated’ CIO will likely be disregarded.”

In other words, look beyond the CIO position, think about moving sideways before moving up, take hold of your opportunities, learn the language, and make yourself known. And it probably wouldn’t hurt to learn how to play golf.

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