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Trail to the Chief

Trail to the Chief

Great leaders may be born or made, but no one of either stripe ever got to the top without a serious desire to be there. And opportunities abound for CIOs who aspire to ascend even in nontechnology industries. It's just a matter of using the CIO role to learn all there is to know about the business-while competently managing the IT piece day by day.

"If you're a CIO, you're standing in the crow's nest of your business. You get to know the key people in every division, and you can see how all their work comes together," says James Barksdale, who spends his days looking for Internet entrepreneurs to finance with the $700 million he banked last fall when, as CEO of Netscape Communications , he orchestrated the company's sale to America Online Now he's a living legend in American business. But in the early '80s Barksdale spent nearly five years as CIO of Federal Express "Being a CIO helped me learn how to work in an environment of many competing demands and finite resources," he says. "It was invaluable experience and I drew from it throughout my corporate career." Barksdale says it was as CIO that he learned how to depend on human nature to act in its own interest. "Our staff performed best when we recognized them for attaining specific goals," he says.

"What gets rewarded gets done."

Predictably, the first crop of former-CIO CEOs has taken the reins mostly at entrepreneurial enterprises trafficking in IT products and services. Yet observers believe that's bound to broaden soon. It seems the CIO position-a novelty just a decade and a half back-is maturing along with the increasingly business-oriented individuals who are filling it.

"It's still uncommon to see a CIO rise up to CEO in a large, nontechnical company, but I don't think that's for a lack of qualified individuals," says Christopher Hoenig, CEO of Exolve , a Washington, D.C.-based consultancy, and former director for information management and technology issues at the US General Accounting Office. A lot of CIOs have the capacity but not the ambition to run those kinds of enterprises.

A recent survey helps explain the widespread aversion to enterprisewide leadership. In November 1998 Korn/Ferry International, the world's largest executive recruiter, polled heads of IT at 340 companies in France, Germany, the United Kingdom and the United States and found that just 29 per cent of US CIOs believe they'll rise to the helms of their respective enterprises over the next five years. (By comparison, some 46 per cent of French CIOs predicted their ascendance.) The prime reason Americans gave for their pessimism: a lack of business experience. They also said their skill sets were not relevant to the CEO job, they were viewed as too far removed from revenue-generating activities and they couldn't seem to change entrenched perceptions.

"I had to fight for profit-and-loss responsibility"-and that was just to move from IT head to a business vice president role, recalls Katherine Hudson, former CIO of Eastman Kodak Co. "Being a woman added to the challenge. But once I showed that I could deliver on the bottom line, it got a lot easier to move forward." Hudson is now president and CEO of Brady , a Milwaukee-based manufacturer of industrial products.

No matter the size of the company or the industry, all top executives face the same challenges: maximize revenues, minimize expenses and do more business this year than last.

To find out how well time spent as CIO prepares an individual to take on such expansive and intimidating responsibilities-and to learn what an IT-based background may lack-CIO spoke at length with former CIOs who now lead growing companies.

Dean Sivley

President & CEO,

Atlas Travel Technologies

Former CIO at Duracell, Rosenbluth International What do you do when you're just 36 and already a successful CIO of a well-known consumer-products company? That's the question Dean Sivley asked himself in 1993, when he held the top IT job at Duracell When the only reasonable answer seemed to be "run a company," he enrolled in the MBA program at Columbia University. Two years later, having graduated with honors despite living a dual life as full-time student and executive, he took a stride in that direction.

Accepting an unusual job offer from Hal Rosenbluth, the charismatic founder of a blossoming commercial travel business, Sivley became that company's CIO. Five months later he became head of marketing too. He saw the double-hatted post as a chance to move closer to his ultimate goal.

"I always loved business and I always knew I wanted to run my own firm," he says. "At the same time, one thing I was really good at was technology.

Rosenbluth gave me a chance to combine those two interests." Two years into that assignment, Sivley's juggling act caught the eye of another player in the travel industry. Atlas Travel Technologies , an Australia-based online seller of finance, tour-management and reservation software to travel agencies, recruited him to lead its operations in Europe and the Americas.

(Another CEO runs the Australian and New Zealand business.) Looking back, Sivley says he may not have succeeded in his lifelong quest had he not had a dedicated mentor along the way. While he was an electronic-data-processing auditor in 1982 at Duracell's parent company, Wade Lewis, the senior vice president and CFO, saw Sivley's leadership potential and began encouraging him to broaden his horizons. Lewis explained to him what he was up against in fighting perceptions and coached him as he sought to get beyond them. "He was honest in his big-picture critiques of my performance, sometimes brutally so," says Sivley. "And I realise now that was precisely what I needed." Boosted by such backing, Sivley enjoyed success on a wide array of projects and goals. This gave him the confidence he'd need to report directly to a board of directors-and to sway them when it seemed necessary. When he arrived at Atlas in fall 1997, the company's business was based on a direct-to-consumer model.

Sivley believed that Atlas ought to focus its immediate attention on travel agencies and tour operators as its main distribution channels. "Nothing I'd been through as a CIO compares with selling a board of directors on a fundamental change in the direction of the company," says Sivley. "It's a huge responsibility because if you get what you want and you end up being wrong, you could adversely affect a lot of people." But he felt confident that his CIO training had prepared him for just such a challenge.

"In a technology-related business, an IT person is probably better prepared than anyone else to lead," says Sivley. "Nowadays strategic planning is a matter of envisioning scenarios that can be made possible only through IT." He's equally convinced in the value of the business credibility he took the time to build. "If you're a CIO who can't sit down and have a real in-depth discussion with the heads of marketing, finance and operations, you can't expect those individuals to get behind you when you try to nudge the company in new directions made possible by technology," he says. "And if you don't do something out of the ordinary to build your business credibility while you're CIO, you'll probably never get the chance to lead." In a class of 65 MBA candidates, Sivley was one of only two IT professionals.

Larry Grandia

President & CEO,

Daou Systems

Former CIO at Intermountain Health Care

Larry Grandia got his first taste of broad business leadership in 1986, when the board of trustees at the multihospital system at which he served as CIO asked him to provide quarterly reports. They wanted to know how IT was helping to advance the corporate mission and how it could improve its contribution.

Twelve years later, the founder and chairman of Daou Systems , a health-care IT solutions company with 800 employees on whose IT advisory board Grandia served during his tenure at Intermountain, offered him the chance to run the show, from marketplace vision to internal execution.

By that time, Grandia had grown to love the fine art of strategic leadership even more than he loved being CIO of an institution he'd belonged to for nearly 30 years, including 26 in senior management.

"When the opportunity was put in front of me, I realised how exciting it might be to leverage all my years of experience and take total responsibility for an organisation," he says.

Part of that has meant unlearning some old mental habits-a certain challenge facing any CIO moving to the top spot. "Sometimes IT professionals get a little too consumed with mastering technology," says Grandia. "A natural outgrowth of that is coming to believe that technology is the ultimate success factor. In fact, it's just one of many; the true success factor is the quality of the relationships you build with people." Could he have ascended to CEO at Intermountain, with its 23,000 employees and multiple facilities? "If you have the skills to lead, you can do so in any organisation," Grandia answers. But he notes that, in the case of a major regional health-care provider, potential CEOs need a uniquely credible, positive and visible relationship with many different groups, including doctors, nurses and community leaders. And many CIOs may face similar stumbling blocks as they try to move to the top in nontechnical fields. "If CIOs are ever going to run these kinds of institutions, it won't be simply as a byproduct of being top-notch technology executives," says Grandia.

Grandia says he could have been content continuing to help lead Intermountain through the sea changes that continue to transform the American health-care system. But the chance to learn entirely new skills on the job-he went from an established, nonprofit giant to a publicly traded, entrepreneurial venture-is paying off in the form of a sense of personal growth he hasn't experienced since his younger years.

"There is something incredibly liberating and energizing about hearing, 'Put your thumbprint on the future of this company,'" he says. "Somehow nothing else compares with being at the point of a spear, watched by many who have a stake in your decisions, and forced to make all the right moves." Ron J. Ponder President & CEO, Beechwood Data Systems Former CIO at Federal Express, Sprint, AT&T When Carl Yastrzemski succeeded Ted Williams in left field for the Boston Red Sox in 1961, he knew he had oversize shoes to fill.

Ron Ponder can relate. He took over the CIO post at Federal Express in 1981 when Jim Barksdale moved up to COO of the rapidly growing overnight-delivery company. Like Yaz, who went on to earn his own way into Cooperstown, Ponder has been the driving force behind some of the most celebrated IT feats of the past two decades.

At FedEx, his employer for 17 years, he orchestrated the creation of the package-tracking system that propelled the company to the $13.3 billion success story it is today. Next stop was Sprint , where he put together an ambitious universal billing system; then came AT&T , where he oversaw the implementation of a critical customer billing and marketing system.

In 1997 Ponder accepted the position of president and CEO of Beechwood Data Systems-then a 400-employee, $56 million telecom systems and services vendor.

The company has grown by nearly 40 per cent a year, and earlier this year it was purchased by the Cap Gemini Group. The merger instantly vaulted Beechwood to 750 employees and $130 million in revenues; it plans to maintain the Beechwood name to grow its telecom business in the United States and maintain the existing management base.

Ponder, a CIO hall of famer, isn't given to brash pronouncements. But he's thrilled with his decision to scale down to a smaller enterprise to take on fresh opportunities and challenges.

"I come to work every day with young, energetic and enthusiastic people," he says. "We have a good product and good service. We're in demand and the industry is growing." Ponder credits his success to having taken the initiative to lead at any opportunity throughout his CIO career. "I was fortunate enough to always be saddled with more than just the development and implementation of IT systems," he says. "I wanted to be more involved in the business and I always made it a priority to know as much about the customers, products and services as the guys in marketing and sales. I always went to the front of the food chain, started with the customer and understood the company operations to the very last process."

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