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The Pathway to CIO

The Pathway to CIO

From the Web site of one of the world's most prestigious executive search firms, Egon Zehnder International -- and under the heading of "Thought Leadership" no less -- comes this chilling judgement... "Although CIOs are an emerging presence in the executive suite, few IT executives have the business qualifications or capitalist's killer instinct for making money." -- '

There you have it: Chris Patrick, the global IT practice leader of an international force in headhunting telling the boardrooms of the world that the majority of IT executives don't have the smarts or the daring to earn a seat at the big table. Putting aside the notion that only a pixel separates a capitalist's killer instinct from fraud -- Enron, WorldCom, HIH, et al -- how has it come to this? Moreover, does it matter? And if so, what should be done?

From Tech Head to Business Head

The message is clear: Australia's IT industry must take greater interest in developing its future leaders. With the Baby Boomers nearing retirement, the next 10 years will see more people leave the workforce than join. The perception among young IT executives is that IT is now a commodity, the profession's rewards trail those of finance, legal or marketing, and the position of CIO does not have the gravitas of other C-level functions. It's a perfect storm that makes it vital for incumbent CIOs to help ensure that executives with a technical background develop business skills to advance the profession. In a sentence: today's CIOs carry the brief to groom the next generation of CIOs. It is no straightforward task.

"The problem is that there is no certified path to become a CIO," says Carsten Larsen, executive manager information services, Australian Communications and Media Authority (ACMA). "If you want to be a CFO you become a CPA; engineers can become a certified engineer. As CIOs we come from many different places -- some of them weird and wonderful. So we need to define a career path for people to become a CIO.

"And it matters because it's part of being accepted at board level. CFOs enjoy high acceptance with boards. Boards know the CFO has a certified qualification, they know they are trained for that job. The CIO does not enjoy the same universal acceptance because we don't come from a certified path. It's a matter of respect. I want our advice to be highly-regarded because we are the CIO. Boards should ask for our opinion because, like CFO, our acronym stands for something. Too often the CIO just doesn't get a voice."

Enter Pathways

As befits the best C-level executives, Larsen is putting some walk to his talk. He is one of 11 Australian-based CIOs who are contributing to the Pathways ICT Leadership Development Program, created by the CIO Executive Council. The 12-month ongoing Pathways program is designed around two distinct areas of professional development: business and leadership -- it does not focus on the technical. It helps participants build the commercial savvy needed to put them at the forefront of ICT and of the business.

CIO Executive Council general manager, Caroline Bucknell, says Pathways is a unique professional development program because it is designed and delivered by global and local CIOs. It combines best practices, thought leadership and customised mentoring.

"Pathways is self-managed and self-paced," says Bucknell. "And it's based on the nine universal core competencies shown to have the greatest impact on an executive's success. "The benefits start with access to the CIO Executive Council's Future-State assessment tool, which allows participants to map their current skills against the core competencies, as identified by more than 25,000 C-level assessments."

Of the executive leadership competencies that are considered core to C-level executive success, the ones that CIOs typically have the least experience with--and therefore the weakest development--are those that are externally focused.

These competencies are also those most critical to becoming a Future-State CIO, which the CIO Executive Council defines as an IT leader who spends a larger proportion of his or her time driving and enabling business strategy, versus being primarily focused on running the IT function and enabling process transformation. The core competencies are: strategic orientation, team leadership, commercial orientation, external customer focus, collaboration and influence, market knowledge, change leadership, people and organisational development, and results orientation.

IT Has an Image Problem

Garry Whatley, another Pathways mentor, would go even wider to preach the IT gospel. The CIO of Corporate Express says IT has an image problem -- of its own making -- and that any push to correct this image should reach out to universities, high schools and the public.

"Too many people still think IT involves sitting in a corner programming, and not the raft of other jobs it encompasses," says Whatley. "Yes, we still have image problems with boards, other C-level executives and the business in general, and Pathways will help to address that. But it's such a shame that the public, specifically parents and people who offer careers advice in schools, just have no idea what IT is today."

Whatley is passionate about how IT can make a difference not just to individual organisations, but also to the competitiveness of the entire country. "That takes much more than just integrating IT and business," he says. "It takes leadership and that's what Pathways is about -- building tomorrow's business leaders."

Who Wants to Be CEO?

David Kennedy, CIO and director, Information Services Division, NSW Office of State Revenue, is another of the local CIOs lending his knowledge to the program.

"How do we get the next generation of CIOs a seat at the big table? By the current generation working with potential talent in programs like Pathways," says Kennedy. "That's why I'm involved. The CIO of the past got to that position purely on their technical abilities. That won't be enough in the future. The CIO needs to be a visionary and a business leader, not the propeller-head in the corner. It's not about technology any more. It's about the value to the organisation that comes from leveraging business technologies. Everything we do must be user- and customer-driven. And we need to be part of every part of the business."

"A great example of the dilemma we face is that if you asked a room full of CFOs who wanted to be a CEO, over 90 percent would raise their hands," says Kennedy. "However, if you asked a room full of CIOs, not many would volunteer."

If Chris Clark was in that room of CIOs, he would be one of the first to raise his hand. The CIO of Brookfield Multiplex Limited is, at 41, one of the youngest CIOs in the country. Earlier in his career Clark pushed for more business education, but to no avail. That changed dramatically with his last direct report at Brookfield Multiplex, Bob McKinnon, now CIO at Westpac.

"Fortunately, when I was in a 2IC role to a CIO, I had a few opportunities," Clark says. "Having been in a CIO role now -- and being one of the younger ones in my peer group -- I joined Pathways to ensure people coming through understand what a CIO is, and to help businesses know what a CIO does. At the moment, a lot of companies still don't have that awareness."

Clark says when he chats with IT peers he knows within five minutes where they stand. Many have all the technical skills, but few have the knowledge of how to deliver IT best for a business. That demands leadership, team-building, creative thinking, listening skills, knowledge of regulatory compliance, and business ethics.

"There's no shortage of information for us on all these things," says Clark. "Gartner, McKinsey and the rest. Some of it's too heavy. Some of it's great. But there is nothing like learning from those who are in the role and doing it.

"I advertised recently for a business integration manager and of the top nine applicants there were a few about my age who aspire to be a CIO. They didn't get the role with us, but they followed me up and asked if I'd be their mentor. I was flattered, but I told them I could do much better -- I referred them to Pathways."

Being More Than an 'Able Pragmatist'

Late last year, the IBM Institute for Business Value went to the trouble of interviewing more than 2500 CIOs around the world for its Global CIO Study -- the largest face-to-face study of CIOs ever conducted. The study's report, "The New Voice of the CIO", found that successful CIOs do three things: drive innovation, improve return on investment and increase the impact IT has on the business.

To achieve all this, says IBM, CIOs need to blend two roles for each goal. Innovative CIOs are both "insightful visionary" and "able pragmatist". ROI zealots combine being a "savvy value creator" with "relentless cost cutter". And those who impact the business are a mix of "collaborative business leader" and "inspiring IT manager".

IBM found that while CIOs in Australia and New Zealand exhibit many aspects of all six roles, they gravitate towards being able pragmatists.

This sits comfortably enough with Peter Nevin -- as a start. The executive general manager, business processes for Sedgman Limited (and chairman of the CIO Executive Council's board) speaks fondly of his journey to, and time in, the CIO's chair because it has asked so much of him.

"If you look at the CIOs involved in Pathways -- and how they got to where they are in their careers -- there are many different experiences," he says. "Some of us hit some spectacular blind alleys along the way. When I started in IT I had no concept of what a CIO was or even how to aspire to it.

"One of the massive rewards for me is that you get to see, touch, and play with more things than anyone else in the organisation -- possibly even the CEO. You know the width, the breadth, and the depth of the organisation. You have no choice. It's as challenging as any science in that there are leadership components, a complex technical environment, a demanding operational service-level environment, human aspects and large quantities of financial management. That is a career worth having, if you're up to it."

Pride in the Profession

Allan Davies, the CIO of Dematic and a Pathways mentor, says one of the great enduring myths of IT is that CIOs don't understand the business. He says they do.

"And real CIOs know a lot more besides," Davies says. "You can't have got to the position in the first place without knowing the business' pain points and the possible solutions. CIOs want people to know their job is no walk in the park, but it can also be as rewarding a business career as you can have today."

Carsten Larsen believes success comes back to having pride in the profession. "As a CIO I'm proud of what I do," he says. "I think I contribute a lot to the business. But other people I deal with at work often don't understand what we contribute. We have to sell the role better so people can appreciate the difference we make. My involvement in the CIO Executive Council has always been about raising the CIO profile. I want the CIO to have an identity within the business. Unless we get that identity we'll always be seen as the nerd sitting in the corner."

Chris Clark agrees. He says sometimes, the business just doesn't recognise what the best CIOs provide. "Some people treat the CIO like a glorified helpdesk manager," says Clark. "That can be humiliating, but I've turned that attitude into my challenge. I want to show the senior business members why I am here.

"For example, in the construction industry, they say to me -- 'but you just need concrete and steel; you don't need computers'. It's a mindset from 30 years ago.

"So I ask them how much concrete and steel they used; did they use it effectively; are they getting the best rate; and can they compare the experience across different projects. There is still a major struggle about teaching upwards. It's massive."

Peter Nevin says misconceptions about the CIO role exist even within the ranks of IT itself. "Gather a set of senior IT executives and it will divide into two camps: those who know what the CIO role is and those who believe it is managing the technology," says Nevin. "Yesterday, I was discussing someone's career prospects and to them it was still as black and white as 'do I remain in a technical stream or do I join management?' It's much more complex than that. So being able to articulate what the CIO role is and the skills you need to attain that role is immensely important. Pathways provides that experience."

A Final Word About Killer Instinct

Gartner says that by 2012, the companies with the best earnings growth will be those with an entrepreneurial CIO. The distinctive feature of such a beast is a willingness to take high-level risks -- much like an entrepreneurial CEO -- to generate revenue, boost financial results and increase market share. But Gartner's own CEO research has established each year for the past six years that more than 60 per cent of CEOs see their IT organisations as a major constraint to the changes their businesses need.

Which is the point Egon Zehnder's Chris Patrick makes so sharply in his thought leadership about senior IT executives. It's worth a refrain, this time with emphasis: "Although CIOs are an emerging presence in the executive suite, few IT executives have the business qualifications or capitalist's killer instinct for making money."

Coincidently, the nine core competencies shown to have the greatest impact on an executive's success, and that form the foundation of the Pathways program, were determined by Egon Zehnder. They hear you Mr Patrick. And soon you will be hearing from them.

SIDEBAR: How to Think, Talk and Walk Like a Leader

Simarjit Chhabra refutes the notion that IT people are not suited to the upper echelons of business. He cites Bill Gates, Steve Jobs and Michael Dell -- techies who used to assemble computers in their garage -- as living proof.

Chhabra, CIO of Xtralis, says IT executives have diverse talents and learning abilities, and can adapt to changing circumstances. But he admits that a lack of soft skills, business acumen and political agility holds them back. "Most IT people shy away from the top roles and focus on learning technical skills rather than strategic business skills," Chhabra says. "They prefer computer games to boardroom games. Others don't have the appetite for office politics. Some may deny it, but politics is an essential skill in business. It's time we realised that networking is more than Cisco."

Be an Intrapreneur

'Intrapreneur' is a term Chhabra uses to describe a person within a corporation who takes direct responsibility for turning an idea into a profitable finished product by being innovative and taking educated risks.

"Most of us don't possess any intrapreneurial skills, let alone entrepreneurial skills," he says. "This is what we need. We need to make IT a profit centre before thinking about how to run a business. If we can't manage our own department's profitability, how can we expect to do it for the entire business? This is where financial savvy comes in. If you can't speak the language of EBITA, ROI and TCO, then you're better off staying with TCP/IP, ADSL and WI-FI."

Chhabra says while some know little of the art of negotiation, others don't have the gumption to be assertive in making decisions. "Many of us spend our lives justifying outages in our infrastructure rather than making the case for more investment to reduce the outages," he says. "For example, how many of us know the most effective way to convince our boards we can't give them the fabled five 9s uptime unless they invest in infrastructure? Unless we train ourselves to think, talk and walk like business leaders, we will spend endless years waiting for approvals to upgrade links so users can have faster Internet access. That's not a career."

CIO: A Mix of Drive, Skills and Guts

Chhabra agrees that many senior IT executives in Australia don't have the drive, the strategic nous or the courage to move into the role of CIO. He blames career education, burnout, ignorance (from others) and wonky recruitment policies as some of the many reasons this is so.

"Our education system needs a revamp as we aren't taught about various business aspects during our engineering or technical streams," says Chhabra, who holds an Electronic Engineering Degree from the University of Pune in India and an MBA (International Management) from the University of London.

"I would say 99 per cent of companies around the world don't have a career path for engineers or technical employees to move into management or to learn cross skills," Chhabra says. "And even though IT has become the backbone for many organisations, IT remains unknown to most people in senior management. They still think we just fix desktops -- and we get treated accordingly. For example, look at the hype around cloud computing. Top executives see it as a way to reduce costs and improve efficiency, so they ask us why we haven't moved into the cloud. But have we educated them, in terms they can understand, about the risks of such a strategy?"

Having operated successfully as a senior IT executive at Capgemini, HSBC, and Ingram Micro, and with consultative roles at Citigroup, GE Finance, Morgan Stanley, IBM and DBS Bank on his CV, Chhabra is an evangelist for working across industries. He says the hiring strategies at too many companies are narrow and naive.

"Most companies require CIOs with a background in that industry," he says. "It's often a mistake. It puts a strain on available talent, and hinders anyone trying to recast IT strategy at a new firm because they are considered outsiders. We should encourage more cross industry experience. I've been lucky to work in logistics, telecommunications, financial services and outsourcing, and when I moved into my current role in manufacturing, I was able to revolutionise IT within our organisation around the world. My experience in those other industries helped us to leap into the future."

What Buddha Would Say

Chhabra says talented IT executives have all the ingredients to be the CIOs and CEOs of tomorrow. "Some of the most successful companies today, such as Apple, Google and Dell, have one thing at their core -- technology," he says. "Who knows technology in our company better than us? Many IT people think 'this is my job and this is my life'. How about changing this thinking to 'this is the job that leads me towards my next goal in life'? We need to step back and decide our life goals -- but also be certain it's what we want."

"And never complain you aren't happy with what you have. As Buddha once said -- 'a happy person is not a person in a certain set of circumstances, but rather a person with a certain set of attitudes.' That's what we need as CIOs -- a certain set of attitudes.

Join the CIO New Zealand group on LinkedIn. The group is open to CIOs, IT Directors, COOs, CTOs and senior IT managers.

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