From Private to Public

Private-sector CIOs are bringing new levels of expertise to government IT. And public service teaches CIOs skills that the private sector is finding ever more essential.

Reader ROI

• Why the public sector is a viable career path
• What skills and qualifications are required for the job
• How public-sector skills are transferable to the private sector

WANTED: SEASONED, EXPERIENCED CHIEF INFORMATION OFFICER. Must be willing to work long hours, endure lengthy public debate over day-to-day minutiae, answer hostile, intrusive questions from reporters, build a senior management team under severe financial and bureaucratic constraints. Tenure uncertain, linked to boss’s political performance. Salary as much as 70 per cent below market value. No stock options. No bonuses. No relocation expenses.

Not exactly a job you’re dying to nail? Well, during the past 18 months a slew of top CIOs from corporate powerhouses in the US such as Disney (Stuart McKee), EDS (George Newstrom) and Verizon (Thomas Jarrett) have said yes to jobs very much like the one described above: the job of state CIO in the US.

It’s something of an emerging trend. All over the US, senior technology executives are jumping from the private to the public sector. Their motivation, surprisingly, isn’t entirely post-9/11 altruism or, conversely, disgust with corporate financial scandals. Being a government CIO, it turns out, can be a great job, and it can be a great stepping stone to the next job.

Of course, these CIOs don’t get rich. Salaries run 20 per cent to 70 per cent less than what’s being offered in the US private sector. (One state CIO now earns less than he used to pay in taxes at his old job.) Instead of cash, the state CIO position offers compensation in the form of power and authority. State CIOs exercise control over a broad range of services, and they possess budgets (ranging from $US30 million to $US425 million) that can rival those of Fortune 50 organisations. Plus, they often have a surprisingly free hand with which to operate. “It’s a challenging career move,” says Gerry Wethington, president of the National Association of State CIOs (NASCIO). “Because of the economy, states are confronting a whole new set of issues, like business process efficiency, where the private sector has an opportunity to help.”

And public service, whether it’s at the federal, state or big city level, teaches CIOs skills that the private sector is finding ever more essential. “Negotiation skills, appropriations, how to work with a legislative body,” lists Wethington, who is himself CIO of Missouri. “Many corporations today are stymied by their ignorance of the business processes of government. If and when you go back to the private sector, you’ll have a better understanding of how to work with government.” Former Washington state CIO Steve Kolodney, long considered a superstar in government IT, is now vice president of digital government initiatives for American Management Systems, a Virginia-based IT consultancy.

SUSPICIOUS MINDS WANT TO KNOW

State CIOs must be able to pull together massive, far-flung and often poorly integrated operations and must be adept at serving multiple constituencies. And candidates for state CIO have to be goal-oriented: term limits, or the voters, often dictate a short job tenure in which to effect change.

Must the ideal candidate be political as well? Not necessarily. While all but one of the state CIOs we profile knew their governor in some capacity before their appointment, NASCIO’s Wethington insists the job isn’t so much about Politics with a big “P” as it is about little “p” politics, although he admits it “helps if you’re known to the existing IT community in the state, particularly if your company has been in a good private-public relationship with the state government”.

But big “P” politics does, in fact, play a big part in the job. In the six weeks it took us to report this story, two of our potential profilees fell by the wayside. Utah CIO Phillip Windley resigned under pressure in December, unable to weather a storm of accusations over what a legislative report deemed were unfair hiring practices. (Windley, a former vice president at Excite@Home, had hired several other Excite employees at higher-than-average starting salaries and had apparently bypassed competitive-practices structures to do so.) And in November, Judith Teller, New Jersey CIO and newly appointed secretary and treasurer of NASCIO, quietly tendered her resignation to Governor James McGreevey, telling CIO only that “due to budget and other concerns, it became clear the administration wasn’t going to focus on technology as a strategic enterprise asset”.

Windley’s crash is at least partly about living in a fishbowl; Teller’s is partly about pervasive budget crises that are reaching levels last seen during the Great Depression. Both cases highlight the fact that in US politics, the CIO job is intimately tied to the successes and failures of the boss, be it the governor, the mayor or the president. (When Teller resigned, New Jersey Governor McGreevey’s approval rating had fallen to 37 per cent.) IT is often a difficult sell — inside government or out — and when times get tough, the CIO can suddenly find himself like Harry Potter, living under the administration’s stairs. As one CIO says: “If your governor isn’t willing or able to expend political capital to gain support for enterprise technology projects, you have to ask yourself what you’re doing there.” Or, in cases like Windley’s, the governor could wind up asking that question of you.

Why jump into such a snake pit? If it’s not about the money, and if the future’s uncertain, what’s the allure of public service? Every CIO we interviewed says a heartfelt belief in the responsibilities of citizenship is an absolute prerequisite for taking on the job.

“The position requires a fundamental belief in the idea of stewardship,” says Brian Wolf, CIO for the state of Montana. “If that’s not part of your thought process, this is not a job for you.”

• WASHINGTON
• Stuart McKee
• Director of Washington State Department of Information Services and CIO
• Age: 36
• Salary: $US133,000
• Previous job: Vice president of global Internet operations at Disney
• Took the job in April 2002 because: McKee was wowed by the state’s reputation as an IT leader (he filled the post vacated by CIO superstar Steve Kolodney).
• Technology challenge: Changing outdated business processes (and convincing people to change along with them).
• Management challenge: Fulfilling Governor Gary Locke’s directive that the state’s IT services be run as a discretionary, competitive business unit within government. “Government agencies and nonprofits buy services from us if they want to. We have a rate schedule; we aggregate demand; we have to prove we’re providing the best value. It’s absolutely refreshing, and it makes sense for the private sector as well.”
• On the pay cut: “This is a job where your compensation is a matter of public record. You can still be ambitious and work in state government but not if you’re motivated just by money.”
• His future: Stay on as long as Locke is in office, or even longer if the new administration wants him to. Beyond that, McKee is convinced he could take his experience with Washington’s competitive IT services model and sell it to the private sector. “I love the idea of taking what we do here and bringing that back to private enterprise. I see this position as an amazing career and growth opportunity.”
• Take-away: “I didn’t anticipate my enthusiasm for public life. Public service ‘shareholders’ are everywhere, and they care. This is an enormous, enormous IT services operation, and people’s lives depend on what we do.”

• VIRGINIA
• George Newstrom
• Secretary of Technology
• Age: 56
• Salary: $US128,000
• Previous job: Corporate senior vice president and president of EDS Asia
• Took the job in March 2002 because: “I’d been in the private sector for 28 years. I was getting ready to retire, and I wasn’t interested in a government job. But I met with [Governor Mark Warner], and we talked about the job, and I said, I like what he stands for. I think I can contribute.”
• Technology challenge: Using technology to make government more efficient and effective with an ever-shrinking pool of resources. “Downsizing is the same for government as it is for private industry. We’re literally going through the same drill, and it’s tough.”
• Management challenge: Moving quickly. By law, the governor of Virginia is limited to one four-year term, which gives the administration very little time to implement long-term change. “It requires very quick action. We have to have a direct impact in 18 months. If our plans aren’t implemented in, say, 18 to 24 months, we’ve probably lost our window of opportunity.”
• On the pay cut: “I take dollars out of my wallet every day to pay for this job. It’s not a position you take for the stock options or bonuses.”
• His future: Retirement.
• Take-away: “It would behove anyone to take a public position, the way executives take on an overseas assignment. The wheels of change may turn at a different pace, but having a working understanding of that process will make you a better executive in the long run.”

• MONTANA
• Brian Wolf
• CIO
• Age: 40
• Salary: $US105,000
• Previous job: Manager of telecommunications and technology transfer at Basin Electric Power Co-op, Bismark, North Dakota. Took the job in September 2001 because: After 19 years with the same company, Wolf welcomed the chance to be Montana’s first CIO. Plus, he has a soft spot for Montana; and at midcareer, he was feeling the need to contribute to public good in some manner. So when Montana announced the job, Wolf applied.
• Technology challenge: Evaluating several large, troubled IT projects to determine whether they’re salvageable. And building a process architecture to strengthen the state’s project management methodology to ensure that mistakes won’t be repeated.
• Management challenge: Moving the state’s IT organisation from a siloed environment to an enterprise perspective. “There’s a lot of historical culture to deal with, a lot of trust that needs to be built.”
• On the pay cut: “You don’t come to these positions for the money. I’m working longer and harder than I ever have. You have to have a fundamental sense of stewardship for the taxpayers of the state.”
• His future: Governor Judy Martz’s term ends December 2004, and she hasn’t yet announced if she’s running again, but because Wolf does not report directly to the governor it’s possible he could stay on under a new administration. If and when he’s ready to return to the private sector, “the skill sets I’m using here are absolutely transferable to the private sector or another government job”.
• Take-away: “It’s a wonderful feeling when you deploy true efficiency and effectiveness that touches the taxpayer. And the research, performance management and best practices that come out of government models are invaluable. Wherever I go next, I will be a much better manager because of what I’ve been exposed to here.”

• DELAWARE
• Thomas Jarrett
• Secretary of the Department of Technology and Information and CIO
• Age: 51
• Salary: $US133,660
• Previous job: Worked at Verizon in Delaware for 30 years, holding the position of director of government, education and philanthropy affairs for the last six years.
• Took the job in September 2001 because: Intrigued by challenge and opportunity. Governor Ruth Ann Minner, with whom Jarrett had developed a working relationship while he was in Verizon’s office for government affairs, won legislative approval in May 2001 to create a new IS organisation that would be outside the civil service system. In August 2001, Minner asked Jarrett if he’d be interested in the new cabinet-level CIO position. Jarrett said yes. “I had a chance to come in and handpick and hire an entire organisation with a new market-based compensation plan and run it like a business.”
• Technology challenge: Maintaining critical systems and making data centre upgrades while simultaneously building a new organisation. And developing standards that provide the highest level of customer service at the lowest possible cost.
• Management challenge: “The budgeting process is very, very different from the private sector. It’s been a learning process to go through the hearings, testify before the general assembly, and figure out the differences between state funding and federal funding, and special funding versus general funding.”
• On the pay cut: “You don’t come to these positions for the money.”
• His future: Fulfil his commitment to his governor, including a possible second term, then perhaps retire.
• Take-away: “This is a great opportunity to hone your communication skills. You’re not just talking to people in your company all day. It’s the legislature, your peers in state government, agency heads, the press, citizens — a very diverse group of people.”

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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