Alignment: Hiring the Right CIO

By Steve O'Connor

(Back to article)

The average tenure of CIOs has become notoriously short. Indeed, more than a few major, brand-name companies have been seen hiring new CIOs almost yearly.

Often (as insiders will sometimes share), these firms are caught in a vicious cycle—hiring each new CIO in the belief that his or her strengths will somehow fix the problems caused by their predecessor’s weaknesses. Since no CIO is perfect, however, the cycle can run for many years, resulting in thrashing of priorities and untold missed opportunities.

But even when a CIO stays on the job for years at a time, that widely-sought Holy Grail—“alignment” between IT and business strategies—often remains an elusive goal. What’s going on here?

Perhaps, this new generation of CIOs’ skills and capabilities are not quite up to the jobs they’re being asked to do. And, this mismatch is bound to grow worse as companies leverage IT more intensely. Arguably, the problem actually begins with the fact that in most executive suites, there’s surprisingly little understanding of what kind of CIO is actually needed, what skills are required to lead IT for the enterprise as it pursues its strategy in its chosen markets.

The Skill Set

While there is pressure for today’s CIO to master and stay current on computer technology, the more critical skills are related to more traditional aspects of business management. As head of perhaps the most complex operation in any enterprise, the CIO is responsible for what amounts to a sizeable and complete business on its own.

And so, this executive’s success depends heavily on skills in finance, leadership, communication, strategic thinking and planning, and, perhaps most important, in understanding what customers want and how best to get it to them.

Technical savvy is, of course, indispensable. The CIO must understand technology and its capabilities well enough to grasp how all of the computing services and products on which an enterprise depends fit and work together. Similarly, the CIO has to know enough to properly evaluate the stream of new products being promoted by outside suppliers, and filter their (sometimes exaggerated) claims.

On top of that, business skills greatly amplify the effectiveness and value of these technical skills. Ideally, the CIO will have previous experience in managing a large business unit and thereby developed an on-the-job understanding of various line-of-business functions, and the administrative aspects of running them.

Of particular importance is financial acumen. As much as the CEO and CFO, the CIO must truly understand the other business units in the enterprise, each with its own goals, metrics and end-customers. These are, after all, the CIO’s direct customers. By understanding the financial drivers of those businesses, the CIO will have a much better chance of getting the right mix of services acquired, developed and delivered at the right price and with maximum value. Financial acumen is, in short, an absolute must for getting IT truly “aligned” with the business as a whole.Unfortunately, many CIOs have come up through the ranks of computing and MIS without learning how to manage a full operating business. While fellow executives may be exposed to a range of other business functions over the course of their professional development, the typical IT executive may be confined to the somewhat narrow, albeit difficult and complex, world of IT. And, in the CIO post, the resulting skills deficit may suddenly become glaring.

IT’s increasing importance is bound to make this mismatch even more glaring. Take the growing emphasis on customer experience, for instance the drive to make every interaction with customers as frictionless, distinctive, and compelling as possible. These days, with the Web, mobile devices, and automated call centers, and all such critical touch-points IT pretty much is the front office.

IT is critical to finance, product development, and manufacturing. Through technologies like CRM, IT is reshaping the sales process as well. Clearly, the CIO who doesn’t understand these aspects of the business is the CIO who’s likely to have trouble keeping IT “aligned” with that business.

Hiring for Success

Solving this problem is not as easy as just hiring a seasoned businessperson instead of a career technologist as CIO. Should such a person fail to learn and stay abreast of IT’s fast-changing landscape, he or she will likely be unable to gain the respect and loyalty of IT managers, thereby limiting IT’s effectiveness in delivering value to other business units.

The first step in hiring the right CIO is to focus on identifying the precise set of skills that will be required to be successful in this role. Then, all executives in the organization must agree on this set so that as each one interviews a candidate he or she can evaluate them against a common set of criteria.

One possible source of candidates might be senior management at a technical services company, or perhaps a chief operating officer or general manager of a large business unit. The CIO’s job has come to resemble that of a supply-chain manager in such a firm as they both struggle to match multiple, shifting sources of supply against complex and ever-changing customer demand.

Both call for a solid grasp of product development, customer delivery, and other operational issues. Both require some understanding of the financial drivers affecting suppliers and customers. Executives from technical services companies are familiar with this way of thinking and they’re used to putting together effective portfolios of services. What’s more, they’re used to talking to customers.

Now, it may not be possible to find people matching exactly this set of criteria. But it’s important to be clear with whoever is hired that this set of skills is what’s expected of him or her. And it’s against these expectations that they will be judged. As a result, when any missing skills or competencies are identified a development plan must be quickly put in place. This might take the form of professional development courses, or perhaps mentoring from fellow line-of-business executives. Any variable compensation should be tied to this personal development.

During the last decade, the function and value of IT has moved to the forefront of just about every business. Hiring or grooming the most qualified person to run it should receive similar attention.

Steve O'Conner is the founder and SVP of ITM Software, an IT business management solutions provider. Previously, he was CIO of companies such as Silicon Graphics.