When recruiting a new CIO, companies look mostly outside their own walls due to a lack of confidence in internal IT management, and many CEOs fear that internal candidates lack well-rounded experience, a technology recruiter told about 150 CIOs at the 2004 CIO Symposium in the US last week.
At the symposium, several Fortune 250 CIOs talked about their rapidly changing profession and of the search for a new breed of IT managers. Although the goal is to create those managers internally, that rarely happens, they said.
"The one thing we found that companies don't do too well is engage their future leaders," said Gerry McNamara, a senior partner at financial services and technology recruiting firm Heidrick & Struggles International in Chicago. McNamara said most companies are sorely lacking in IT leadership training programs.
A Heidrick & Struggles survey of Fortune 250 companies found that 61% went outside to hire new CIOs, while 55% of Fortune 100 companies looked elsewhere for their CIOs. And 70% of companies use psychological testing to determine the ideal IT manager.
The findings weren't surprising to CIOs at the conference, which was hosted by the Columbus Technology Council and Ohio State University. Several CIOs from Fortune 100 companies acknowledged the need for better training of IT managers, particularly when it comes to understanding the business side of the company and managing projects.
Joseph Calvaruso, CEO of Mount Carmel Health System in Columbus, instituted a leadership development program in July 2000 at his firm to address a 24% annual employee turnover rate.
"Employees join organizations, but they leave [as] managers," he said. After implementing the program, the attrition rate dropped to 4% this year, Calvaruso said.
Jody Davids, CIO at Cardinal Health in Ohio, said the biggest technical issue facing CIOs is helping companies integrate multiple lines of business after experiencing growth via mergers and acquisitions -- a task that demands business expertise from the CIO and the managers he hires. Cardinal Health is a US$65 billion distributor of pharmaceutical and other medical supplies and equipment.
Davids' company is halfway through a two-year business and IT realignment project to pull together more than a dozen companies acquired by Cardinal during the past decade. "You cannot lead with technology," she said.
"There needs to be some understanding of the business [by IT managers] if the investment is going to be wisely made."
CIOs need to project a well-defined vision that links IT project goals and performance measurements to business goals, she said, advising her counterparts to "deal decisively with those who cling to the past" and won't change.
John Deane, CIO at Wendy's International, also in Dublin, said he has seen a dramatic change in corporate expectations as CIOs evolve "from someone who is technical in philosophy to someone who is a value creator. CIOs are [becoming] part of the strategic process."
"You need people in your organization who understand business first and IT second," said Fred Siff, CIO at the University of Cincinnati.
John Zarb, CIO at glass maker Libbey Inc. in Toledo, Ohio, said developing employee potential is key to achieving a tight-knit IT shop where talents are married with appropriate job titles. Zarb, a big believer in internship programs that can uncover fresh talent, said the annual review process is as much a liability as an asset because it often is a substitute for getting out and becoming familiar with employees.
"Get to know your people. Move them around. Find out where they're most productive," he said.