Lack of confidence in internal IT management results in companies mostly looking outside their own walls when recruiting a new chief information officer, the 2004 CIO Symposium was told last week.
At the Ohio symposium, CIOs of blue-chip US companies admitted that their attempts to foster a new breed of IT managers internally rarely paid off.
"The one thing we found that companies don't do too well is engage their future leaders," said Gerry McNamara, senior partner at recruiting firm Heidrick & Struggles International. McNamara said most companies sorely lacked IT leadership training programmes.
A Heidrick & Struggles survey found that 55% of Fortune 100 companies hired new CIOs externally, as did 61% of Fortune 250 companies. The survey also found that 70% of companies used psychological tests to determine their ideal IT manager.
CIOs at the conference weren't surprised. Several acknowledged the need for better training of IT managers, particularly in understanding the business side of a company and managing projects.
Joseph Calvaruso, chief executive of Mount Carmel Health System, said he had instituted a leadership development programme four years ago to reduce his company's 24% annual employee turnover rate. "Employees join organisations but leave as managers," he said. Implementing the programme brought the rate of churn down to 4% this year, he said.
Jody Davids, CIO at Cardinal Health, said the biggest technical issue for CIOs was helping their company integrate multiple lines of business after a merger or acquisition.
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."
She said that CIOs needed to project a well-defined vision that linked IT project goals and performance measurements to business goals, and advised colleagues to "deal decisively with those who cling to the past" and refuse to change.
John Deane, CIO at Wendy's International, said he had seen a dramatic change in corporate expectations as CIOs evolved "from someone who is technical in philosophy to someone who is a value creator. CIOs are becoming part of the strategic process."
Fred Siff, CIO at the University of Cincinnati, agreed. "You need people in your organisation who understand business first and IT second," he said.
John Zarb, CIO at glass maker Libbey, said developing employee potential was key to achieving a tight-knit IT shop where talents were married with appropriate job titles. Zarb said the annual review process was as much a liability as an asset because it was often 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.
Lucas Mearian writes for Computerworld