Developing one or more strong succession candidates demonstrates that the incumbent CIO is concerned about the continuity of IT leadership and about protecting the company's technology investment.
When the National Australia Bank decided to overhaul its management team last year, IT was not spared. Out went CIO Ian Crouch and in came Ian MacDonald as group CIO, with Michelle Tredenick fulfilling the regional CIO role. Both had emerged from the NAB's own sprawling ranks - MacDonald had been executive manager of the NAB's Financial Services Australia and Tredenick had been CEO of its MLC Corporate Solutions Group (and MLC CIO before that).
According to a spokesperson, the personnel changes reflected the bank's decision to "give technology more alignment with a business focus". Clearly both new CIOs had a sound grasp of NAB business, and in Tredenick's case a track record as a hands-on CIO.
The NAB was fortunate - it found the people it wanted with the skills it needed under its own roof. Not all succession planning is so smooth. Some CIOs can be ejected swiftly, leaving them no opportunity to participate in planning their replacement. Some announce their decision to leave too soon, which proves emasculating as their authority among their staff, users and even vendors gradually erodes. However, when succession planning is well executed, everyone benefits - a strong successor can reflect well on the previous incumbent, a willingness to consider internal candidates is recognized as a corporate commitment to career development, and a preparedness to benchmark those candidates against external prospects demonstrates an organization's maturity.
One apparently seamless example of succession planning is found at Brisbane-based Suncorp. Its group executive IT, Carmel Gray, late last year announced she would be retiring from the position at the end of 2004 after almost six years in the job. Suncorp has had a corporate-wide succession management program in place for some time - at least twice a year when managing director John Mulcahy and his seven general managers meet they run through the people in the organization with identified potential. So the organization was always on the lookout for internal talent to bring forward.
Nor did Gray's announcement come as a surprise to Mulcahy. She had in fact told him a year before she went public that she wanted to be back in Melbourne for the beginning of the 2005 school year. "For me that felt the right thing to do," Gray explains. "I wanted to manage the transitions smoothly. But it wasn't more widely known until the middle of the year when the executive committee was told. My own direct reports were told in September and there was the announcement in November."
So, by mid year and knowing that she was going, and knowing what talent lay within the firm, the next phase of the succession planning process kicked in. In September an executive search was commenced and a candidate shortlist developed. The couple of identified internal candidates were on the list along with some external prospects.
"When the executive search firm interviewed the internal candidates they said these people would have been on any shortlist that the firm produced," Gray says. So the candidates made the final round on merit alone; but, as Gray points out, "there is a benefit in handing over the baton to someone internal who has been through the five-year technology refresh".
Hemant Kogekar, who had been the general manager of application services at Suncorp, got the nod. And Kogekar's replacement also came from within his ranks. "We were doing succession management down the line," Gray says, "so we had a good appreciation of the managers in his level. It was fortuitous as you don't always have a person ready to move to a general manager role."
Gray is pleased that it was possible to appoint from within but stresses the need for rigorous process. This is not a situation where jobs for the boys works. "The benefit of having an external search is that these are important roles at an executive level. While there is an advantage to appoint from within, you do want the best candidate," she says. Also it is important for a listed company to be able to demonstrate to shareholders that due diligence has been performed with all senior appointments.
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