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Grooming the future CIO

Grooming the future CIO

Successful IT succession planning needs legs - real-life chances to learn valuable leadership lessons that last.

Ask Paul J. Capizzi about his career plans and he'll tell you, "I'm taking the stairs, not the elevator." It's an unlikely admission from the fast-talking New Yorker, who, at 36, has already risen to the number-two spot in IT at insurer SBLI USA. It's not that Capizzi isn't ambitious. He simply wants to make sure he succeeds. "I'm very aggressive and I'm always doing something," says Capizzi, who just took - and aced - the life insurance agent test to beef up his business know-how. "But I'm not in a rush to get to a CIO position. I want to take advantage of all the people around me-my peers, my direct reports, my managers-and continue learning. I'll get there eventually, but I'll get there with a wealth of knowledge."

CIOs and up-and-comers agree-on-the-job experiences trump traditional succession plans in preparing IT professionals to lead. Formal succession planning programs received the lowest effectiveness rating of any development opportunity in a CIO survey of 100 aspiring IT leaders. Although 60 percent were participating in such programs, only 17 percent found them to be very effective. On-the-job experiences rated higher: 76 percent said that steering an enterprise-wide project, for example, was instrumental to their professional growth.

"Traditional programs fail when nothing comes out of them," says Robert Reeg, MasterCard's president of global technology and operations. "If an employee is recognized as high-potential and then is in the same job for five years, you're using succession planning as a tool in development. [You] need to understand the responsibility and the impact of labeling an employee as high-potential [and] make sure the potential is realized."

Successful IT succession planning needs legs - real-life chances to learn valuable leadership lessons that last. Ask any CIO and they're likely to tell you that what best prepared them for the role was having seen-and done-it all: helming efforts in IT, such as starting up new teams or developing staff capabilities; leading corporate initiatives, such as executing major business process improvements or running enterprisewide projects; and tackling external challenges, including negotiating major contracts and identifying business opportunities.

Steve Finnerty, vice president of information technology and vendor services at Applied Materials, says having varied experiences is "the most important thing you can do to get to the CIO job and stay there." Ten percent of IT leadership development can happen in a classroom, says Finnerty, a Ones to Watch Judge who also held CIO positions with Kraft Foods, Johnson Controls and J.M. Huber. The rest happens on the clock.

To reap real benefits, however, these opportunities must be deliberately selected and delicately managed to balance risk and reward to the individual, the IT organisation and the business as whole. "Your career is a portfolio of experiences, but it shouldn't be something random that happens," says Finnerty, who's sent more than a dozen CIOs into the world from his ranks. "It should be set up to allow leaders to go to their full potential." Making that portfolio pay off requires setting up experiences that are big enough for aspiring IT leaders to grow into and providing enough support to enable success - but not so much oversight that they're stifled.

Finnerty's former direct report Simon Dunning, now Applied Materials' managing director of IT demand management and a Ones to Watch honoree, is the product of learning by doing throughout his 22-year career. "I have written code and pulled wires, worked out of multiple locations worldwide, managed eight SAP implementations or upgrades, reported to the business and reported to IT," says Dunning, who's seen peers in classic succession plans stagnate because they weren't challenged. "It is only when you are faced with real-life situations, forced outside of your comfort zone and put in positions where you have to make difficult decisions that you expand your core skill set."

Make them stretch

Traditional succession planning often focuses more on "planning" than "success." Organisational charts, skills assessments, HR meetings and performance reviews are all integral to succession planning, but that planning falls short if it's unaccompanied by well-thought-out leadership development experiences. The best way to build leadership muscle is by exercising it. "To be a good leader, you have to have intuition," says Finnerty. "And the only way you develop intuition is through experience."

Picking the right experiences for IT executive development can be tricky. "There is a balancing act between what is required by the business and what is best for the individual's career development," says Finnerty, who talks to the members of his management team about their strengths, weaknesses and aspirations as part of a collaborative process of deciding on their next challenges. This can require patience-there isn't always an appropriate opportunity available when the candidate is ready for one. "The key to maintaining balance is having an ongoing dialogue with people in your organisation."

When available, big, bold moves are often best. Finnerty remembers a time early in his career when he'd been working primarily in financial systems development and was tapped to take over the datacentre. "It was a big stretch," he says. "But when the time came to move into the CIO role, I had broader and deeper experiences to pull from when making key strategic decisions." When, later in his career, he was confronted with two major datacentre crises, he and his team were able to make better tactical decisions because of his datacentre background. "A new on-the-job experience stretches the individual's capabilities into new areas where they are not yet fully developed. If you're getting a job or an experience, and you're ready for it," Finnerty says, "it's not big enough."

When Capizzi was promoted to VP of technology at SBLI-a newly created position that put him second-in-command to the CIO-he wasn't just leading a new team, he was leading the team-"the whole org chart," Capizzi explains. The former head of infrastructure had no experience with application development or e-commerce, service-level agreements or business processes. It took months of sleepless nights, working weekends and learning from mistakes before he got comfortable.

His CIO, Eric J. Bulis, had just taken on a stretch role himself, taking over operations in addition to IT. "We needed a strong emerging leader to step into these shoes-both tactical and strategic-to work with me on the bigger picture and take deep dives with me into execution where needed," Bulis says. "Paul had proven that he is able to operate outside of his comfort zone effectively. He knows how and when to defer to his subject-matter experts in areas where he is not the strongest, and how to create a team environment."

In 2006, when Applied Materials' Dunning took over management for one of the largest SAP implementations in the world (a two-year project affecting 16,500 users in 21 countries), he had SAP project experience. "But I hadn't done anything on this scale," he says. "Heck, no one had. We had 600 people on the project team, a bazillion processes, and we needed a breadth of skills on the business analyst side that was not easily found."

Dunning says the trial by fire was one of the most effective tools thus far for honing his leadership skills. Among the challenges: refining the project's scope when it was already underway; resetting business leaders' expectations for results; strengthening the partnership between business and IT through shared governance; and mastering the tactical requirements of a project larger than any he'd seen. Each obstacle brought revelations. He could have communicated better. He learned how to see IT projects through a CFO's eyes. Most important, he learned the value of decisive action.

At one point, "we faced a critical decision about whether to keep pushing on the project or to reset the schedule," recalls Dunning. He pushed the schedule out, but knows he waited too long to do so. "Sometimes the competitive fire and desire to win will push you to do things that aren't best for the ultimate success of the program," he says, adding that it's important to think about the capabilities of your organisation rather than your own.

MasterCard's Reeg knew Ones to Watch honoree John Meister was the right candidate to head the authorization and database management group in 2008. "He'd built a track record of delivering great results and would routinely meet or exceed goals," says Reeg. "That, combined with his own drive to succeed and learn, made it easy for him to work at different levels and roles."

But Meister was wary. "Authorization is the heartbeat of our business. If it doesn't work, MasterCard doesn't work," says Meister. He told Reeg the idea "scared the daylights" out of him. That's when Reeg knew Meister was ready for the role. "I would have been more worried if he was coming in thinking this was going to be a piece of cake," Reeg says. "We knew [John] had the technical, people and management skills to be successful."

Being new to card authorisation had benefits. "John gets to ask 'Why?' a lot and challenge the status quo," says Reeg. One question Meister posed was, if MasterCard could give banks customer data that helped them build their credit card business, why couldn't it do the same for their merchants? From that question came a system for delivering valuable data to retailers, such as where the customers come from and how loyal they are, and how same-store sales compare over time. And MasterCard is building stronger relationships with merchants, traditionally a challenging audience.

Meister has instilled a more strategic focus in the card authorization group that has translated into increased funding for projects like the retailer data service, Reeg says. "It's a bigger risk, in my opinion, not to offer employees new opportunities and help them manage through failures that might occur."

And they will fail. Overnight success is rare in the IT leadership ranks. Savvy CIOs make sure their protégés build up the skills needed to handle the big tasks. "That's one thing I have a better appreciation for than I used to," says Finnerty. Rather than putting someone in charge of IT strategy all at once, he'll offer aspiring leaders less-risky opportunities first. They might participate in developing financial forecasts and annual operation plans, or take a class on strategic thinking, "so it's not such a shock" when they have to make big decisions, he says.

Have their backs

It's not enough just to make sure aspiring leaders are prepared to step up and tackle a big challenge. Smart CIOs have their backs, securing support up and down the company chain of command.

Ruchir Rodrigues, vice president of product design and development at Verizon, says broad corporate support was critical when he created a revenue-generating consumer R&D group within the corporate IT department. The organisation had traditionally provided back-office support. If the company wasn't behind the new team, says Rodrigues, "we would have had sparks but no light."

The genesis of the product-development group goes back more than six years, when Rodrigues and his team worked with CIO Shaygan Kheradpir on ideas for digitising Verizon's analogue offerings. Doing so would give the millions of customers using Verizon's traditional public-switched telephone network (PSTN) the benefits of what we now associate with voice-over-IP, even before VoIP was a viable platform. They didn't need to rip out the PSTN, argued Rodrigues; they could write software to translate the information into something usable on the Internet. "Shaygan saw the vision of it," says Rodrigues. "He said, 'I will help you guys work on this.'"

The key was starting out small, with projects like Visual Voice, which translates traditional voice mail messages into a form compatible with IP-enabled devices and software. "We prototyped it in our spare time," says Rodrigues. Kheradpir worked with the marketing department. And slowly but surely, a product-development group blossomed. Since then, the group has developed dozens of consumer products, including mobile handsets and fiber-optics based video, voice, and data services (marketed as FiOS), generating hundreds of millions of dollars in revenue. "With Shaygan's support, we were able to build this from small successes rather than him going to senior management right away to invest in it before we knew if it would work," says Rodrigues. The CIO gave Rodrigues the time to prove the value of the product-development mind-set and the support necessary to build it into a successful enterprisewide program.

Mentoring is critical for these stretch assignments. "If someone's a little over their head," adds Finnerty of Applied Materials. "I make sure I surround them with expertise." People who have done the work before, or at least some piece of it, are there to provide advice.

Terry Dinterman, JetBlue's vice president of technology services, had just a few months to negotiate an infrastructure outsourcing contract for the airline to address system-availability concerns and pave the way for a new reservations system. He'd set up application development deals before, but nothing with such a great impact on the enterprise or with such a tight deadline. However, the Ones to Watch honoree had backing from the airline's senior executive team and its board. CIO Joe Eng joined Dinterman in meetings with board members, invited him to speak at senior leadership forums to build awareness of the project, and served as Dinterman's trusted advisor. "Joe always made himself available to discuss the approach and progress of the RFP and negotiations," Dinterman says. That not only gave him the confidence to nail down a deal in eight months, but also the authority to handle vendors who tried to circumvent his RFP process by going to Eng and other JetBlue execs.

Dinterman walked away not only with an enterprise win but also with a wealth of leadership know-how. "Simply the experience of going through a very visible and challenging project generates leadership development," he says. "You cannot underestimate the value of new relationships that get established with senior executives, key business leaders and even business partners when navigating an enterprise project." He's now worked closely with executives from finance to legal to sales. And because the infrastructure outsourcing contract was only one of the big projects on his plate-he also negotiated contracts with Microsoft and EMC, relocated part of his workforce and managed a dozen other enterprise projects-"I had no choice but to develop my ability to discern when to trust [my] team and when to dive into the details."

Give them room to grow

There's a fine line between having a supportive CIO and becoming suffocated by oversight. Having space to make mistakes is essential to moving ahead, says Dinterman. He's probably his own harshest critic, but he has a long list of things that he now knows he could have done better on the infrastructure outsourcing deal. He should have staffed up the project office more instead of assuming technical leaders could also provide full oversight. He should have created a more comprehensive communication and change-management plan to jump-start adoption of technology such as new teleconferencing capabilities. He should have realized earlier that he needed deeper expertise in some technology areas than he had on staff and brought in consultants sooner.

Letting up-and-coming leaders learn doesn't mean letting go of the reins altogether. Charting a course is exceedingly important when giving your best and brightest a shot at something new. "You have to set up the experience with the takeaways in mind," says MasterCard's Reeg. "It's got to be fundamental to the program that they learn something new." Reeg wanted Meister to run real-time, mission-critical services and manage a large, global team spread from Missouri to Mumbai.

Though Meister keeps succeeding, he says one of the benefits of new experiences has been learning how to fail. A few years ago, he was struggling to build a website using a new rich user-interface tool. His team was stymied by performance issues in the final days of testing. "Because we had a high level of trust across our organisation and with our pilot customer, we were able to switch to an alternate technology, quickly redeploy the site incorporating our pilot customer's feedback and still hit production in time for our second customer's implementation," says Meister.

He witnessed other aspiring leaders refuse to admit mistakes for weeks or months, wasting time and money. "I've learned that if you're going to fail at something-and there is enough trust across an entire team to admit that something is going to fail-then fail quickly. The sooner you take responsibility, the better." That requires the CIO to create a culture that views failure as "a small setback to longer-term success," says Meister.

Turns out that advice also applies to the CIO's task of assigning up-and-coming IT leaders these opportunities. Sometimes a new on-the-job experience doesn't work out-the environment is too political, the resources aren't there, the timing isn't right. "You have to get the balance right when it comes to pulling the plug on a new experience," says Finnerty of Applied Materials. Too early, and you may shortchange someone who could have been successful. Too late, "and you can burn out a great person or stop a career."

It comes down to matching the right experience to the right person, providing support while leaving room for growth, and constantly communicating about how things are going. Particularly in the early weeks of a new assignment, says Finnerty, it's important not just to be available to someone tackling a new experience but also to actively track how the project or role is going and make adjustments when necessary.

Finnerty doesn't want to smooth the course too much. "Part of the experience is learning that CIO environments are never easy," he says. But when things truly aren't going well, "it's all about being candid and open and saying, 'Here's the situation. How can we adjust it?'" says Finnerty. Maybe he needs to provide his protege with more political cover. Maybe more or different resources are required. Maybe a deadline should be changed.

"I'll always ask if there's something I can do. In some cases they'll say yes. In other cases, they'll say, 'Let me handle it, but let's talk about how to do it,'" says Finnerty. "In most cases, they solve it themselves."

Ten ways to groom a leader:

Leadership within IT

  • Start up or lead a new team.
  • Turn around a troubled project or organisation.
  • Develop talent through skills analysis, selective hiring and redeployment, or mentoring.
  • Conceive and execute a major operational, organisational or process improvement within the IT organisation.

IT Leadership Across the Enterprise

  • Conceive and execute a major business operation or process improvement.
  • Lead a significant enterprisewide project.
  • Lead an enterprise-level change initiative requiring significant collaboration and influence.

Business-Focused Leadership

  • Negotiate important contracts or manage relationships with suppliers or partners.
  • Conceive and execute a business product or service idea that significantly affects the company s customers, market or business results.
  • Conceive and execute an innovative use of IT for competitive differentiati

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