Ask Paul J. Capizzi about his career plans and he'll tell you, "I'm taking the stairs, not the elevator." It's an unlikely admission from the fast-talking New Yorker, who, at 36, has already risen to the number-two spot in IT at insurer SBLI USA.
It's not that Capizzi, a 2010 Ones to Watch honoree, isn't ambitious. He simply wants to make sure he succeeds. "I'm very aggressive and I'm always doing something," says Capizzi, who just took-and aced-the life insurance agent test to beef up his business know-how. "But I'm not in a rush to get to a CIO position. I want to take advantage of all the people around me-my peers, my direct reports, my managers-and continue learning. I'll get there eventually, but I'll get there with a wealth of knowledge."
CIOs and up-and-comers agree-on-the-job experiences trump traditional succession plans in preparing IT professionals to lead. Formal succession planning programs received the lowest effectiveness rating of any development opportunity in a CIO survey of 100 aspiring IT leaders. Although 60 percent were participating in such programs, only 17 percent found them to be very effective. On-the-job experiences rated higher: 76 percent said that steering an enterprisewide project, for example, was instrumental to their professional growth. (See "Learning from Leading".)
"Traditional programs fail when nothing comes out of them," says Robert Reeg, MasterCard's president of global technology and operations. "If an employee is recognized as high-potential and then is in the same job for five years, you're using succession planning as a tool in development. [You] need to understand the responsibility and the impact of labeling an employee as high-potential [and] make sure the potential is realized."
Successful IT succession planning needs legs-real-life chances to learn valuable leadership lessons that last. Ask any CIO and they're likely to tell you that what best prepared them for the role was having seen-and done-it all: helming efforts in IT, such as starting up new teams or developing staff capabilities; leading corporate initiatives, such as executing major business process improvements or running enterprisewide projects; and tackling external challenges, including negotiating major contracts and identifying business opportunities. (See "10 Ways to Groom a Leader".)
Steve Finnerty, vice president of information technology and vendor services at Applied Materials, says having varied experiences is "the most important thing you can do to get to the CIO job and stay there." Ten percent of IT leadership development can happen in a classroom, says Finnerty, a Ones to Watch Judge who also held CIO positions with Kraft Foods, Johnson Controls and J.M. Huber. The rest happens on the clock.
To reap real benefits, however, these opportunities must be deliberately selected and delicately managed to balance risk and reward to the individual, the IT organization and the business as whole. "Your career is a portfolio of experiences, but it shouldn't be something random that happens," says Finnerty, who's sent more than a dozen CIOs into the world from his ranks. "It should be set up to allow leaders to go to their full potential." Making that portfolio pay off requires setting up experiences that are big enough for aspiring IT leaders to grow into and providing enough support to enable success-but not so much oversight that they're stifled.
Finnerty's former direct report Simon Dunning, now Applied Materials' managing director of IT demand management and a Ones to Watch honoree, is the product of learning by doing throughout his 22-year career. "I have written code and pulled wires, worked out of multiple locations worldwide, managed eight SAP implementations or upgrades, reported to the business and reported to IT," says Dunning, who's seen peers in classic succession plans stagnate because they weren't challenged. "It is only when you are faced with real-life situations, forced outside of your comfort zone and put in positions where you have to make difficult decisions that you expand your core skill set." (See "Ones to Watch".)
Make Them Stretch
Traditional succession planning often focuses more on "planning" than "success." Organizational charts, skills assessments, HR meetings and performance reviews are all integral to succession planning, but that planning falls short if it's unaccompanied by well-thought-out leadership development experiences. The best way to build leadership muscle is by exercising it. "To be a good leader, you have to have intuition," says Finnerty. "And the only way you develop intuition is through experience."
Picking the right experiences for IT executive development can be tricky. "There is a balancing act between what is required by the business and what is best for the individual's career development," says Finnerty, who talks to the members of his management team about their strengths, weaknesses and aspirations as part of a collaborative process of deciding on their next challenges. This can require patience-there isn't always an appropriate opportunity available when the candidate is ready for one. "The key to maintaining balance is having an ongoing dialogue with people in your organization."
When available, big, bold moves are often best. Finnerty remembers a time early in his career when he'd been working primarily in financial systems development and was tapped to take over the data center. "It was a big stretch," he says. "But when the time came to move into the CIO role, I had broader and deeper experiences to pull from when making key strategic decisions." When, later in his career, he was confronted with two major data center crises, he and his team were able to make better tactical decisions because of his data center background. "A new on-the-job experience stretches the individual's capabilities into new areas where they are not yet fully developed. If you're getting a job or an experience, and you're ready for it," Finnerty says, "it's not big enough."
When Capizzi was promoted to VP of technology at SBLI-a newly created position that put him second-in-command to the CIO-he wasn't just leading a new team, he was leading the team-"the whole org chart," Capizzi explains. The former head of infrastructure had no experience with application development or e-commerce, service-level agreements or business processes. It took months of sleepless nights, working weekends and learning from mistakes before he got comfortable.
His CIO, Eric J. Bulis, had just taken on a stretch role himself, taking over operations in addition to IT. "We needed a strong emerging leader to step into these shoes-both tactical and strategic-to work with me on the bigger picture and take deep dives with me into execution where needed," Bulis says. "Paul had proven that he is able to operate outside of his comfort zone effectively. He knows how and when to defer to his subject-matter experts in areas where he is not the strongest, and how to create a team environment."
In 2006, when Applied Materials' Dunning took over management for one of the largest SAP implementations in the world (a two-year project affecting 16,500 users in 21 countries), he had SAP project experience. "But I hadn't done anything on this scale," he says. "Heck, no one had. We had 600 people on the project team, a bazillion processes, and we needed a breadth of skills on the business analyst side that was not easily found."
Dunning says the trial by fire was one of the most effective tools thus far for honing his leadership skills. Among the challenges: refining the project's scope when it was already underway; resetting business leaders' expectations for results; strengthening the partnership between business and IT through shared governance; and mastering the tactical requirements of a project larger than any he'd seen. Each obstacle brought revelations. He could have communicated better. He learned how to see IT projects through a CFO's eyes. Most important, he learned the value of decisive action.
At one point, "we faced a critical decision about whether to keep pushing on the project or to reset the schedule," recalls Dunning. He pushed the schedule out, but knows he waited too long to do so. "Sometimes the competitive fire and desire to win will push you to do things that aren't best for the ultimate success of the program," he says, adding that it's important to think about the capabilities of your organization rather than your own.
MasterCard's Reeg knew Ones to Watch honoree John Meister was the right candidate to head the authorization and database management group in 2008. "He'd built a track record of delivering great results and would routinely meet or exceed goals," says Reeg. "That, combined with his own drive to succeed and learn, made it easy for him to work at different levels and roles."
But Meister was wary. "Authorization is the heartbeat of our business. If it doesn't work, MasterCard doesn't work," says Meister. He told Reeg the idea "scared the daylights" out of him. That's when Reeg knew Meister was ready for the role. "I would have been more worried if he was coming in thinking this was going to be a piece of cake," Reeg says. "We knew [John] had the technical, people and management skills to be successful."
Being new to card authorization had benefits. "John gets to ask 'Why?' a lot and challenge the status quo," says Reeg. One question Meister posed was, if MasterCard could give banks customer data that helped them build their credit card business, why couldn't it do the same for their merchants? From that question came a system for delivering valuable data to retailers, such as where the customers come from and how loyal they are, and how same-store sales compare over time. And MasterCard is building stronger relationships with merchants, traditionally a challenging audience.
Meister has instilled a more strategic focus in the card authorization group that has translated into increased funding for projects like the retailer data service, Reeg says. "It's a bigger risk, in my opinion, not to offer employees new opportunities and help them manage through failures that might occur."
And they will fail. Overnight success is rare in the IT leadership ranks. Savvy CIOs make sure their proteges build up the skills needed to handle the big tasks. "That's one thing I have a better appreciation for than I used to," says Finnerty. Rather than putting someone in charge of IT strategy all at once, he'll offer aspiring leaders less-risky opportunities first. They might participate in developing financial forecasts and annual operation plans, or take a class on strategic thinking, "so it's not such a shock" when they have to make big decisions, he says.
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