Over a two-year period, Bill Weeks saw 70 percent of his development team at SquareTwo Financial walk out the door. More than half of them left on their own. Weeks fired the rest.
It might sound like a leadership disaster, but it was the best thing that had happened to the $250 million asset-recovery company's IT organization in years.
When Weeks took over as CIO in 2010, the company was in growth mode, but IT was falling behind. He wanted to build a results-focused technology team, but many on staff refused to engage with business. "The previous CIO had told the IT staff, 'Business people are busy doing business things, and if I catch you talking to them, I'll fire you,'" says Weeks. "That's the exact opposite of what I believe."
Many IT executives face situations like Weeks', where they're challenged to build IT departments that are more strategic, serviced-oriented and engaged with the business--but they're dealing with employees who lack the skills to make the transformation.
According to a recent IDG Enterprise (IDGE) survey of 696 senior IT and business executives, more than half of respondents said IT must be business-savvy (61 percent), collaborative (53 percent), and innovative (50 percent). The only problem is that finding "hybrid" staff--those with that combination of tech skills and business savvy that CIOs covet--remains a problem.
Many IT employees still take a traditional view of their role, as order-takers rather than business partners; indeed, 58 percent of respondents to the IDGE survey rated their IT staff as reactive. And among their top IT-management challenges were cultivating strategic thinking (51 percent), developing business understanding (42 percent), and converting technologists to strategists (37 percent).
This talent issue is hardly new. IT leaders have preached the importance of the blended IT professional for years. But after a decade, it's clear that help is not on the way. Schools won't suddenly churn out enough perfect, well-rounded IT employees. Tech-knowledgeable business people aren't going to apply for IT assignments in droves. Developers and data warehouse professionals won't suddenly arrive at work as business strategists.
Leading CIOs are taking matters into their own hands. Some are firing folks who can't make the transition, or changing the way they hire. Others are encouraging existing staff to be more business-oriented or populating their IT ranks with recruits from the business. Some are mentoring. Others are stretching.
Sometimes it works. Sometimes it doesn't. But CIOs are making progress. And, given what the business expects of IT, they don't have a choice.
What's Wrong With IT
Given the chance, 27 percent of IT and business leaders would remake their company's IT departments from scratch, according to the IDGE survey. It's a telling statistic, a sign of frustration at a time when CIOs are under pressure to boost business results and develop customer-facing applications but may lack the kind of staff that can do that.
According to a CIO Executive Council survey of 200 IT leaders this year, IT organizations are least proficient in the "ability to develop, market and present compelling visions of IT-enabled business opportunities" followed by the "ability to appreciate and incorporate external customer needs and experience." If corporate IT were composed of employees with equal parts business and technology knowledge, those might be dominant skills. So why don't CIOs just hire more well-rounded workers? Because they don't tend to exist in the wild.
"Business savvy comes from years of experience working on the business side, generally at a level high enough to have a broad cross-functional perspective," says Dave Smoley, a 2013 CIO Hall of Fame inductee. "Because technical competence comes from years of experience working and training in math, science and technology, it is rare to find both in one individual." Smoley, until recently the CIO of Flextronics International, joined pharmaceutical company AstraZeneca as CIO on April 15.
Bringing business professionals into IT can work, but their technology knowledge can be shallow. Imbuing techies with a business point of view is difficult.
"It's hard for tech people--even middle managers on up to senior managers--to think the way that the business thinks," says Teri Takai, CIO for the Department of Defense and a 2013 CIO Hall of Fame inductee. "They tend to explain things from their own perspective."
Raja Musunuru, CIO at The Steritech Group and a 2013 Ones to Watch honoree, was once a case in point. "I am an engineer by study, and to me, everything seemed to be a problem that needed to be solved--and solved in a particular way," Musunuru says. "While that works well in certain scenarios, it's not a foolproof recipe for value contribution to the business."
When Weeks arrived at SquareTwo Financial, only a couple of people at the very top of the IT organization worked with the business at all. "The rest were spoon-fed what to do. It was a huge bottleneck that stifled creativity and collaboration," says Weeks. "It was crazy."
Sometimes the best thing you can do is blow up the IT department up and start over.
Weeks explained his expectations to the technology team: "We're moving to this more collaborative and engaged environment. You're going to have to understand what our business needs to be successful. You may not want to do that, and I don't want any hostages."
Some people got it, particularly the company's underused business analysts. Others fled, like many on the development team. It wasn't just the business focus that drove them out, it was the added accountability. "There were people that had been hiding under a rock," Weeks says.
Weeding out those who couldn't adopt the business point of view was half a solution. To replace them, Weeks had to hunt down that rare breed--the business-savvy, collaborative programmer. "We needed a combination of tech skills and collaboration skills," says Weeks. "And we're primarily a Java shop, so that made it even more difficult."
Weeks started by building a new employment branding campaign that emphasized the financial success of the company and its desire for A-level programmers. He implemented agile methodology that required development teams to work closely with the business. And he appointed business analysts as the product owners of those development teams.
At E&J Gallo Winery, the world's largest wine producer, longtime CIO Kent Kushar also knew it was time to turn his reactive, back-office IT function into a proactive, customer-facing business partner. What he didn't know was whether he had the right people to do it. "We knew we had some who could make the change," says Kushar, a 2013 CIO Hall of Fame inductee. "They latched right on." But many did not, despite "lots of chances to make it."
For a new role--the customer-facing IT representative--he wanted more than a business bent. He wanted a graduate business degree. Finding the best and brightest MBAs was one thing; finding those who wanted to work at Gallo headquarters was another. "You don't recruit a Harvard grad to come to Modesto," Kushar says. He zeroed in on schools like the University of Arizona, the University of Texas, California State University Stanislaus, and the University of Arkansas.
"My CFO and I did it ourselves. We didn't outsource it. We got on airplanes. We talked to deans. We studied the [curricula]. We joined advisory boards," Kushar says. "And we were able to attract the right talent."
Reaching Across the Aisle
When Smoley was populating his global customer solutions group at Flextronics, he too wanted top business-minded tech leaders. "We often get them from manufacturing sites, which are essentially really small companies," Smoley explains.
"This is a good source of talent because if an individual has been an IT leader at a manufacturing site, they have absolutely dealt with customers and business management directly. They have experienced the pressure for reduced cost and increased speed. So these folks are business-savvy and technically strong."
They don't all want the job; some are happy where they are. But for those that do, Smoley has a career path for them. "We also make it a practice to offer our IT talent the option to work on the business side as a career path, and we actively recruit from non-IT functions in the company," says Smoley. "Our mission [was] to be the career destination of choice for all employees at Flextronics."
One problem Smoley often encounters, however, is overestimating the technical capabilities of business people. "While one doesn't really need to be a technologist in these roles, there is a need to understand how to break a project down into work tasks and dependencies [and] assess technical risk," he says. "Without that capability, a project can go into the ditch quickly." He needs staffers who have enough technical knowledge to stay out of danger and who are willing to seek assistance when things get hairy. Smoley encourages his business-minded folks to spend plenty of time with technologists inside and outside the company--suppliers, partners and peers.
Talking to Aunt Linda
At the DoD, Takai's lieutenants excel at highly technical projects, but she reminds them that their technical solutions are only as good as their ability to communicate them to senior defense leaders. "I tell them you have to use Aunt Linda language," she says. "How would you explain this to your mother, assuming she's no expert. Or your neighbor?"
She's always peppering her direct reports with questions about their projects--not the technical details of the programs, but their intended results. It's to help her prepare for meetings with department secretaries and undersecretaries. But it drives home the point that it's business outcomes that matter.
"I try to take them to meetings whenever I can so they can see the dynamics themselves," Takai says. Sometimes that's enough. In other cases, Takai will identify expert explainers to emulate.
At SquareTwo Financial, it took time for IT employees to get comfortable with business discussions. "It's difficult for a developer to stand up say, 'I'm going to show you what my product does and do it in a way that a business person can understand it.' Not, 'Hey, I wrote this code this way and here are my SQL statements,' but, 'Here's the business value of why I designed this the way I did,'" Weeks says.
When Musunuru was interim CIO at Gaylord Entertainment, he says he found it valuable to be paired with subject-matter experts, which gave him not only more domain expertise but also a deeper understanding of how technology solutions could affect the organization--for better or for worse. "They trained me in assessing whether specific initiatives and IT processes are a net value addition or subtraction to the broader organization," he says. The engineer who once solved problems in a vacuum evolved into a collaborator.
Shortly after joining Gaylord, Musunuru partnered with business executives to understand their growth imperatives and the operational challenges causing customer satisfaction issues.
He formed a cross-functional team to map the customer journey and develop solutions to improve customer experience, including the implementation of a Web-based booking engine to optimize the reservations process, a cloud-based call-center-optimization solution that improved conversion rates while reducing operating costs, and a campaign-management system that transformed marketing operations.
It Takes Two
Sometimes, however, a techie is just a techie.
And that's not a bad thing. "It's hard to be a technical person today," says Kushar. "If you can find people who keep their heads when all about them are losing theirs, that's valuable." Gallo's IT infrastructure staff, for example, is very focused on the technical aspects of the environment to ensure it is relevant, usable, world-class and ready for business growth, says Kushar.
"I don't want all business savvy," agrees Takai of the DoD. "If you only have that with a light dusting of the technical, you would never adequately address the challenges we have here."
Takai is careful not to chase away the experts. "The thing that hasn't worked is my trying to make technical people less technical," she says. "You might move them a little bit, but they're never going to step back and take a management perspective. It's just not who they are. It's frustrating for them."
Instead, Takai finds someone with complementary business skills to work with them.
"I may have an area where I need a lot of technical expertise and also the ability to interface with our business people--like cybersecurity. If I have someone who understands the technology but is not as good at dealing with the front office, I bring in a second person who's better at marketing skills and dealing with senior leaders and pair them up," says Takai. "You don't have to get all your expertise from one person."
"Success in IT comes from building an organization that has a mix of strong technical individuals as well as business-minded individuals that are leading in a way that helps the techies understand how they fit into the business and why what they do is important," says Smoley. "Simultaneously, [you have to help] the business-minded folks understand the technical strategies and road maps so they can leverage them and represent them to the business. It is a continuous challenge."
The Making of a Strategist
Are IT strategists made or born?
At Gallo, Kushar recruits about half of his strategic thinkers as ready-made hires from the outside world and develops the rest internally. "In part it's about allowing some people inside the organization to think differently," he says.
For Suzanne Best-Foster, vice president of enterprise infrastructure services at Jacobs Engineering and a Ones to Watch honoree, the key is "investing in more listening than talking and suspending the techie drive in me to provide solutions based on what I know and not what could be."
Her transformation to strategic thinker has been fueled by listening to others challenge her thinking or encourage her to broaden her vision. "I have grown immeasurably through the opportunities they have made for me to gain insight," she says.
Smoley says strategic thinking must be a core tenet of talent development. "I look for open-mindedness, a questioning mind-set, candor, critical thinking, [and] the ability to network confidently, internally and externally," Smoley explains. When he finds junior employees who have those traits, he matches them up with a senior mentor. "[It] helps to accelerate learning through more frequent conversations around what works and what doesn't--and why.
"Success as a strategist comes from a broad awareness of strategic options and what has and hasn't worked in the past and currently," Smoley says. "The technical world changes so fast that individuals have to be continuously assessing their assumptions and re-evaluating them."
Progress, Not Perfection
One thing Takai has learned is that you can't take an entire IT organization and make it all strategic. "They're used to doing things a certain way and it's hard to get people to go at it differently," she says. "It's better to pick two or three people at a time," she says.
And she's realistic about the changes she can--or can't--make when some of her employees have 30 years of tenure; they were there before she was appointed and will be there after she leaves. "They know people like me come and go, and my ability to get them to think differently is limited."
Sometimes the dual demands of the hybrid role are too much for one IT professional to handle. Or pairs of seemingly complementary workers don't mesh. "The toughest part is to try to find compatible people," says Kushar. "Either you try to put someone that's too technical in a role and they don't have the customer skills, or they're too customer-skilled and don't have the technical awareness. Those people fall flat."
Weeks has spent three years already on the path to creating an IT organization that boasts both business and technology expertise. His direct reports finally all get it. But "when you get down to their directs, some get it more than others," he says. "Each rung down the ladder, it's harder for them to see the big picture. It's not perfect. It never will be."
Yet these top-notch CIOs keep at it.
"You don't hire people that get it and all of a sudden everything's cured," Weeks says. "You have to give them time to understand the business. And then they have to hire people that get it, and give them time to understand the business. It takes time."
Meet the New Members of the CIO Hall of Fame for 2013
E&J Gallo Winery
CAREER His IT career spans nearly 50 years, from his first job as a tabulating equipment operator in 1963 to his current position as technology leader and visionary at the family-owned Gallo Winery. During his 17 years with Gallo, Kushar has developed a close and strategic relationship with the Gallo family and executives, while creating innovative, customer-facing applications that achieve competitive advantage and produce desired business outcomes.
JUDGE'S VIEW "He represents a model of a long-term CIO at one company. He has aligned IT very nicely with the business goals and management, which has driven the business to retain him over a long period--something that is not easy given the normal tenure of CIOs."
CAREER Smoley joined AstraZeneca as CIO last month after a lengthy stint at Flextronics International, where he oversaw the company's $250 million IT budget and 2,400 IT employees in 30 countries. In addition to adopting a "lean IT" approach that keeps costs low, he created a culture of innovation resulting in high-ROI projects, such as consolidating 80 HR systems into one global cloud-based tool.
JUDGE'S VIEW "Dave is a true thought leader in cloud/[software-as-a-service] applications and has been a champion and adviser to many CIOs."
Department of Defense
CAREER After making a big impact as IT strategic planner at Ford Motor Co., she moved into the public sector as CIO for the state of Michigan and then California. Now Takai faces perhaps the biggest IT challenge of all: bringing the Pentagon and its $37 billion IT budget into the age of cloud and mobile computing.
JUDGE'S VIEW "Someone who knows technology and how to get things done in a very difficult environment. A long track record of success."
Hall of Fame Judges
Gregor Bailar, Former CIO, Capital One
Helen Cousins, CIO, Lincoln Trust Company
Charlie Feld, Founder, The Feld Group Institute
Tom Flanagan, VP & Senior Client Partner at IBM, Former CIO of Amgen
David Johns, CIO, Ascena Retail
Patty Morrison, EVP of Customer Care Shared Services & CIO, Cardinal Health
Tom Murphy, VP of IT & University CIO, University of Pennsylvania
Filippo Passerini, Group President of Global Business Services & CIO, Procter & Gamble
Andreas Resch, Managing Director, Modalis Management
Rebecca Rhoads, VP of Global Business Services & CIO, Raytheon
Ralph Szygenda, Former Group VP & CIO, GM
Tim Theriault, CIO, Walgreens
Carl Wilson, Former EVP & CIO, Marriott International
Ones to Watch Winners
Senior Vice President of Technology and Operations
Director of Application Management
Deloitte Touche Tohmatsu
Senior Vice President of IT & Divisional Information Officer
Senior Director of Business Systems Delivery
Senior Vice President & CIO of FedEx Express Solutions
The Steritech Group
Lt. Col. Bobby Saxon
Division Chief & Program Manager of Enterprise Management Decision Support
U.S. Army G-3/5/7
Vice President of Applications Engineering
Manager of Application Administration
Newport News Shipbuilding division of Huntington Ingalls Industries
Vice President of Global Applications
Bret (William) Wingert
Vice President of Business Transformation
Deputy Associate CIO
Internal Revenue Service
Vice President of Enterprise Infrastructure Services
Director of IS Technology
Newport News Shipbuilding division of Huntington Ingalls Industries
Vice President of eCommerce Systems
Director of IT
St. Peter's Healthcare System
Executive Director of IT-Software Engineering
Vice President of IT Business Service Management
The Clorox Company
Director of Business Systems Management
Animal & Plant Health Inspection Service, USDA
Vice President of IT, Chief Administrative Office
Ones to Watch Judges
Rex Althoff, CIO & President of Technology, Federated Services Co.
Tom Bartiromo, Senior Vice President, CTO and CIO, Barnabas Health
Lori Beer, EVP of Specialty Businesses and IT, WellPoint
Mark Berthiaume, Senior Vice President & CIO of Specialty and Commercial Insurance, Chubb Insurance
Bill Blausey, Senior VP & CIO, Eaton
Larry Bonfante, CIO, U.S. Tennis Association
Cora Carmody, Senior Vice President of IT, Jacobs
Sonya Christian, CIO, West Georgia Health System
Jay Crotts, CIO & VP, IT Services and Operations, Royal Dutch Shell
Raj Datt, Senior Vice President Global Operations & CIO, Aricent
Jeri Dunn, Former VP & CIO, Bacardi-Martin
John Edgar, VP of IT, US Postal Service
Robert Fecteau, CIO, SAIC
Kathleen Fitzpatrick, Managing Director & CIO, Russell Reynolds Associates
Michael Gabriel, former Executive VP of IT & CIO, Home Box Office
Ken Grady, CIO, New England Biolabs
Steven R. Hanna, VP & CIO, Kennametal
Jeff Hutchinson, CIO, Maple Leaf Foods
Gerry McCartney, VP of IT, CIO, Inaugural Director of Innovation and Commercialization Center, & Olga Oesterle England Professor of IT, Purdue University
Rebecca McClendon, Former Senior Vice President, FedEx
Ken Piddington, CIO, Global Partners LP
Rebecca Rhoads, Global Business Services Group Leader, VP & CIO, Raytheon
Tina Rourk, Senior Vice President & CIO, Wyndham Vacation Ownership
Doug Rousso, Senior Vice President & CTO, CBS Corporation
Samir Saini, CIO, Atlanta Housing Authority
Hugh Scott, CIO, Energy Plus
Mike Skinner, EVP & CIO, EURPAC Service, Inc.
Jeff Steinhorn, CIO, Hess
Joseph Touey, Senior Vice President of North America Pharmaceuticals IT, GlaxoSmithKline
Robert Urwiler, CIO, Vail Resorts
Gordon Wishon, CIO, Arizona State University
Read more about leadership/management in CIO's Leadership/Management Drilldown.