Finding Tomorrow's Leaders Today

Barbra Cooper started as a CIO when the position was still called "VP of IS". In her more than 30 years in IT, she's seen the role become ever more strategic; now the CIO is in the unique position of being the C-level officer who can "see across the entire enterprise".

The CIO for Toyota Motor Sales USA thinks tomorrow's CIOs will be even more strategic and influential. But Cooper also worries about the future business and technology changes they face. "The next 10 to 20 years are going to be challenging," she says. As she talks about the challenges that lie ahead, the question arises: Where will the IT leaders come from to tackle them?

It's a question more and more IT executives are asking themselves. CIOs are moving up and out. The first full-career CIO generation is beginning to retire. Others are increasingly taking on broader responsibilities or moving out of IT and into other business leadership roles as the position evolves beyond its technology roots. At the same time, many CIOs don't know who would lead IT if they left tomorrow.

Demographic factors are also at play. The Baby Boomers are bowing out: the first ones reach retirement age in 2011. Meanwhile fewer young people are pursuing IT careers.

The skills to be CIO have also changed as the role has shifted from technologist to business strategist. It used to be that "we could afford to let the business tell us what they wanted us to do, be good at delivering it and keep our jobs", says Cooper. "Now, the physics and velocity of business and its demands mean you can't afford to wait until something happens."

Indeed, CEOs now look to the CIO to act more as a strategic business leader and less as a function head.TAC Worldwide CEO Robert Badavas says he seldom speaks about technology with his CIO; instead the two talk about "shaping the business value to our clients", he says. To be successful, he notes, the CIO needs to understand the value proposition of the business. "By staying in the silo of technology, HR, accounting or any other," says Badavas, "you're not going to be as valuable to the business." Or to the CEO.

With all that in mind, CIOs today must groom not only competent replacements for themselves but also next-generation IT leaders who are "business ready" and able to succeed in a more IT-intense and integral business environment, say leadership specialists.

"There's a skills gap that's been identified between CIO and one or two levels down," says Harvey Koeppel, executive director of the Centre for CIO Leadership, which is funded by IBM. He points to managing talent, business process transformation and cross-organization leadership as skills that CIOs need to develop in their staff.

Future IT leaders know they need these skills to ascend the ranks. The ability to manage up, build relationships and understand business strategy were deemed critical for professional advancement in a survey of the winners of the 2008 Ones to Watch award, presented annually by (US) CIO magazine and the CIO Executive Council, to recognize IT's rising stars and the CIOs who've nurtured them.

Unless today's CIOs take the time now to invest in tomorrow's leaders, what looms ahead is a potential leadership void that threatens the value proposition of IT, the legacy of the profession and the very health of business and the overall economy.

The Dimensions of the Challenge

CIOs need to figure out the future of IT leadership in an industry where the future seems to change every day. "IT's relationship with the business is changing, and in ten years the job you do today won't be the same as you did then," says Phil Murphy, a principal analyst at Forrester Research.

Business is now digital - no company can run without effective technology strategies. Those that truly manage their information well really do gain advantages over the competition. That means effective CIOs have a seat at the head table.

The shift in business expectations means that CIOs have better job security than in the past. But it also takes longer to find good ones with the right mix of business and technical know-how. For example, Pete Walton is in his second stint as CIO at Hess Corporation. The petroleum products company coaxed him out of retirement in 2005 when its CIO at that time left. Hess wanted someone who could take its information services "to the next level", says Walton. Among other things, that meant finding a new IT leader who could "fuse with the business" and create a culture of innovation.

"CEOs want someone who's business savvy and can figure out how you can use technology for the business. Trying to find that hybrid person is hard," says Diane Wallace, CIO for the state of Connecticut.

It will only get harder to find them, just for demographic reasons.

"We have this triple threat of labour shortage: The Boomers are retiring, young people are not going into IT and fewer people are getting degrees," says Robert Scott, who in February retired as Procter & Gamble's vice president of Global Business Services. Scott says he noticed a drop in IT interest during the technology bubble of the late 1990s. Then the rush to outsourcing created a cloud around IT jobs. That pall persists despite strong job growth in IT.

P&G is a case in point. It outsourced about half its IT staff in 2003, but IT employment is now back to the level it was five years ago. Scott says that this is because the company outsourced its commodity IT, and "internal IT moved up the food chain, and is creating more and more business value".

Scott says P&G continues to attract strong candidates for IT jobs. But the hiring pool is not as deep as in years past. Plus, P&G believes strongly in promoting people steeped in its culture. It worries about keeping its Generation Y employees. The triple threat is already creating an IT brain drain. Wallace says 40 percent of her staff of 518 will be eligible for retirement in the next two to three years. Barbara White, CIO and associate provost at the University of Georgia, says she's lost 90 years of experience in April when three staff members retired, and has a bulge of staff likely to retire in the next 10 years.

The situation facing IT reminds Jonathan Kass of his days in the aerospace industry. Kass, vice president of operations and CIO at Veterinary Pet Insurance Company, started his career as an aerospace engineer in the 1980s. As a new hire, he found that he was mostly reporting to people in their 40s and 50s. An entire generation of leaders was MIA, their ranks thinned by the layoffs that swept the industry in the 1970s to mid 1980s. Kass sees the same phenomenon emerging in IT in the wake of the job insecurity sparked by outsourcing. And he worries about what it means for fast-growing companies like his own that need strong leaders at all levels to innovate and compete. "You're talking about hiring very junior people who won't be ready for leadership," he says.

How can today's CIOs help their companies bridge this leadership gap? There are ways to cultivate the next generation of leaders. But it takes dedication to managing people, not just information.

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

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