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Grooming the Next Generation

Grooming the Next Generation

Senior management at most companies has done a poor job of succession planning - not only within the IT ranks but throughout most corporate departments such as finance, customer service and human resources.

Smart IT leaders take succession planning seriously.

Until recently, many CIOs hadn't given much thought to succession planning, thanks largely to tighter IT spending and low staff turnover. "People were lulled into a sense of complacency over the last five years, as there hadn't been much job movement," says Bill Homa, CIO at Hannaford Brothers, a supermarket chain in the US northeast. But that's starting to change. Spending constraints are loosening and, as a result, more top positions are opening up. More important, many CIOs are recognizing that they need to actively develop the next generation of IT managers and technical leaders as thousands of experienced baby boomer IT professionals near retirement age and universities churn out fewer computer science graduates (see "Beating the Boomer Brain Drain Blues", page 84).

"Ten years from now, we're going to be facing a big gap" in supply and demand for IT management and technical skills, says Maria Schafer, an analyst at Gartner.

Senior management at most companies has done a poor job of succession planning - not only within the IT ranks but throughout most corporate departments such as finance, customer service and human resources, says Schafer.

Still, some forward-thinking companies, like General Electric, have had succession management programs for years. "We place succession planning as an integral part of our leadership development process," says Chris Perretta, vice president and CIO at GE Commercial Finance in the US. Under a formal review process that's done for all GE employees each northern spring, managers conduct an exercise known internally as "Succession C", in which a rigorous, written succession plan is put together for each worker, says Perretta.

GE Commercial Finance has a succession plan for each of its 1200 IT workers, he adds. At the CIO level, Perretta and other executives are constantly assessing IT directors and other potential candidates for attributes such as curiosity, business focus and high energy levels. To help develop its next set of IT and other corporate leaders, GE developed a short-term international rotation program more than 10 years ago to move workers among various geographic locations in order to give them "tangible international experience", says Hank Zupnick, CIO at GE Commercial Finance Real Estate, a division of GE Commercial Finance.

Detroit-based DTE Energy launched a corporate succession-planning effort three years ago. The program was started following an executive repositioning in the wake of DTE's merger with MCN Energy Group and an early-retirement program that was more popular than expected, says Lynne Ellyn, senior vice president and CIO at the diversified energy company. As part of the effort within DTE Energy's 800-person IT department, Ellyn and other executives regularly review positions that are critical to the ongoing operations of the business, ensuring that there's a "farm club" of talented IT professionals to fill critical positions as needed, she says.

Ellyn also has "a very detailed succession plan" for her own role. She has identified several IT directors as candidates to replace her - a list that has been reviewed by DTE Energy's executive committee "so that it's well known", she adds.

Real-World Testing

Dan Demeter, Korn/Ferry International's CIO, looks for ways to try out his succession scenarios. "When I go on vacation, I put different people in charge," says Demeter, who manages a 60-person IT staff at the Los Angeles-based executive placement firm.

At other times, Demeter distributes his responsibilities among various IT directors and grants executive authority to one person. All this helps ensure that his management team will be ready to step in when needed.

For some IT managers, succession management within the IT organization isn't strictly a hierarchical exercise. For instance, when Marriott International considers candidates for an opening within its 1200-person information resources department, "we look across the organization, not necessarily down and up", says George Hall, senior vice president of human resources for the IT group at the hotel operator. By looking only vertically through the organization for the right person, he says, "you may be limiting your resources as to who may be the most effective person to step into that role".

Because some technicians want to take on leadership roles within their domains without having to become managers, Marriott has put together a leadership track and a technology track for its IT organization. People in the technology track can grow into a number of roles that lead up to the vice president level in terms of compensation, says Hall.

Like GE, Marriott also offers rotational assignments for IT and business workers alike. For example, one of its senior IT managers recently moved into a corporate HR role while a member of the finance department transferred to the IT department to work on financial applications, Hall says.

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