From CIO to CEO: You got promoted, now what?

How do you become the business boss, and then what do you do?

It’s still a “Man Bites Dog” story when a CIO is promoted to CEO, but more CIOs, especially in financial services, are making the leap.

That’s because the perception of IT executives as geeks is slowly changing, says Mark Polansky, North American IT sector leader at executive recruitment firm Korn/Ferry International. Technology companies have been willing to promote CIOs for some time, he says, “but the new story is that CIOs are becoming general managers in all kinds of industries.” In some organizations, the idea of having a tech person in the lead is still anathema, he says, but in others, there is increasing recognition that good leadership can come from any field and is to be nurtured wherever it’s found.

We asked four former CIOs to reflect on their ascension to CEO. Here’s what they told us.

If You Want to Move Up...

Lose your inner geek.

Andrew Studdert, Chairman and CEO NES Rentals Holdings Inc. Chicago

Andrew Studdert

Chairman and CEO NES Rentals Holdings Inc.

ChicagoAndrew Studdert, CEO of NES Rental Holdings Inc., believes one key to his success is seeing himself as a generalist, not solely an IT person. “There’s a dated impression of the CIO as a guy who grew up coding,” he says. “I never wrote a line of code in my life. CIOs have to be successful businesspeople first. If they’re not, they’re not going to last, and they’re not going to move up.” Know what’s keeping you back.

Benjamin Salzmann, President and CEO Acuity, Sheboygan, Wis.

Benjamin Salzmann

President and CEO

Acuity

Sheboygan, Wis.Three things hinder CIOs’ career paths, says Acuity CEO Benjamin Salzmann. First is reporting to the chief financial officer. “This is the worst disease,” he says. “Why have IT report to accounting? You show me a company where the CIO reports to the CFO, and I’ll show you a company lagging in its industry in the use of technology.” Second, when they do get to speak to the board of directors, “some CIOs don’t use a human voice,” he says. “They start speaking in alphabet soup, or about Java. It’s a big mistake.” Finally, CIOs often have difficult relationships with other executives because, under the pressure of budgets and deadlines, they get in the habit of saying no, which doesn’t make them particularly popular, he says.

Commit. One of the problems with tech people is that there’s so much demand, they can always move to some other industry, Salzmann says. Instead, he suggests that you make a commitment to a specific industry. “If you learn everything you can about your industry and bring broader suggestions for change to your company, you’ll skyrocket,” he says.

Use your line of vision. Salzmann believes that more CIOs should move up, because they work with all departments and see every aspect of the corporation. “It’s an incredible advantage,” he says. But in his own case, Salzmann supplemented that view with business smarts; in fact, the business savvy came first. After getting an MBA and working in marketing for the first five years of his career, he went to night school to study computers. “Many projects that I was pushing for weren’t getting approved because of IT resource issues, so I thought that if I went into IT, I could really make a difference in the company,” Salzmann says. When he switched to IT, he became a liaison with the business areas “because I better understood where the business people were coming from,” he says.

Get their attention.

Chris Lofgren, CEO Schneider National Inc. Green Bay, Wis.

Chris Lofgren

CEO Schneider National Inc.

Green Bay, Wis.Chris Lofgren, CEO of Schneider National Inc., says his ability to explain clearly how IT projects could create business value got the attention of the company’s executive team, which gave him an opportunity to run a business unit. Lofgren was put in charge of Schneider’s logistics business, which he led to significant new growth. “And it proved very valuable for me as CEO to have had experience running a business unit,” he says. Show your expertise.

Donald Donahue CEO, The Depository Trust & Clearing Corp. New York

Donald Donahue

CEO, The Depository Trust & Clearing Corp.

New YorkIn financial services, understanding what technology can do and how IT assets are best used is a critical competency, not just for a CIO, but for a CEO as well, says Donald Donahue, CEO of The Depository Trust & Clearing Corp. “It’s where your biggest expenses are, and it’s where your biggest value-add is coming from — your competitive differential — so the roles of CIO, COO and CEO are closely aligned in our organization.”

Learn about finance. As CIO, Lofgren reported directly to the CEO and had a seat in executive team meetings. That gave him a broad view into both operations and governance, a key requirement for a CIO to be able to move up, he says. Although Lofgren didn’t report to the CFO, he turned to him for help. “It became clear to me that a strong understanding of corporate finance would be useful,” he says. “I was lucky to have a CFO who was willing to educate me. With his help, I was able to get an accelerated view of corporate finance, which a CEO really needs.”

Run IT with a CEO’s mind-set. Run the IT division as a business, not as a technology group; otherwise you’ll be CIO forever, Studdert says. “You’re in a position to see the company from the inside out, from the hub out to the spokes,” he explains. “It’s a unique place to become a change agent. That’s how I moved from tech to operations at United — by taking an operational view of technology.”

...And Once You Move Up

Hit the ground running. When he first arrived at NES, Studdert set out to map its processes to understand how IT could help through automation. “The CEO has to have an understanding of what technology can do for the company and use that understanding to push the limits on the business side,” he says. “But if you don’t understand the business process, the technology will fail or be underutilized.”

Make the hard choices. Salzmann says the most difficult part of his transition to CEO was replacing seven of 10 company officers. He believed he’d inherited an officer team that had made the mistake of no longer doing any hands-on work. “They’d become just overseers. I was very hands-on as CIO,” Salzmann says. It was a painful process, but he felt he had to put his own team in place. “A company needs a leader,” Salzmann says. “Either do that or get out of the way.”

Replicate your successes. Donahue says the concept of process management is more advanced in IT than it is in other disciplines. As CIO, he led a highly successful process realignment that started in application development and reached into IT infrastructure. “When I became CEO, we began extending that effort outside technology to other areas,” he says. “We are reusing those detailed metrics to measure processes in non-IT fields.”

Promote other CIOs. When Lofgren says that CIOs should be promoted into other areas of the business, he walks the talk. He promoted his CIO, Steve Matheys, to executive vice president of sales and marketing. “He didn’t have any sales experience,” Lofgren says, “but he is good at leadership and processes, and that was something we needed inside our sales force. It’s worked out great.”

Think and act the part. CIOs view strategy with a tech-focused lens, Donahue says. “As you move up to CEO, you have to take that lens back and think about strategy from a much broader perspective and not always have an IT bent,” he says. Another challenge is to delegate more. “As CIO, you have to do a deep dive in the details of projects,” he notes. “But as CEO, you have to learn to depend on other people to make sure the projects are going well.” Also, as the voice of the company, Donahue says, he has had to become much more externally focused, dealing with regulators, customers and partners. “You have to stay in touch with constituents inside the firm,” he says, “but you spend more time keeping an eye on the outside landscape [for whatever] is coming to bite you.”

Raths is a freelance business writer in Narberth, Pa. Contact him at draths@mac.com.

Copyright © 2006 IDG Communications, Inc.

  
Shop Tech Products at Amazon