New Top Dogs of High Tech?

As CIOs bite off more revenue responsibilities, CEOs are less interested in their technical chops

Ask Kirk Kaplan what scares him to death about being a newly minted technology chief, and he says, without hesitation, "Two letters: NT."

That particular phobia is hardly unique, but Kaplan's fear packs a little extra punch: Having spent 17 years as a copywriter and then creative director at Turkel Schwartz & Partners, Kaplan - spurred by a fascination with the Internet's possibilities - recently hauled off and volunteered to become the Miami advertising agency's head IT honcho. (Kaplan's title is chief knowledge officer, and he jokingly says he's mulling a title change to chief alchemist. But make no mistake: He functions as a CIO.)

Like many ad agencies, Turkel Schwartz was a Macintosh-or-die shop. But the writing's on the wall: Affiliates and business partners are demanding files that can at least coexist with Windows NT, and Kaplan needs to do something. Fast. "I got thrown in the rats' nest," he says.

The new breed

Is information too valuable to trust to information technologists? As IT becomes more and more strategic, maybe an MBA is more useful than a computer science degree. Maybe time spent overseeing advertising layouts is better than time devoted to reviewing database schema. Increasingly, organizations are installing technology bosses who have made their mark on the business or marketing side. Although the overwhelming majority of CIOs still rise from the IT ranks, it's becoming increasingly clear that it now takes more than hardware and software chops to make a CIO.

While many experts applaud the trend toward a more well-rounded CIO who brings business credentials to the table, they also warn that those technology chops still count for a lot. Any vendor can waltz in the door and promise a magic solution to all the enterprise's problems. CIOs need the ability to apply the sniff test to these promises and make critical, expensive choices.

Or do they? Experts and CIOs agree that today, what's needed is a technology team made up of people who can cover one another's weaknesses and complement one another. It seems that CIOs who aren't former code jockeys can thrive if they have a tech-savvy lieutenant (or, more likely, lieutenants) whose judgment they trust.

Just as it's hard to imagine a chief financial officer who can't read a balance sheet, it's tough to picture a CIO who lacks at least boilerplate knowledge of IT. But perhaps the role has broadened to the point where technical understanding isn't the primary criterion for landing the position.

Old dogs

Linda Rossetti is CEO of eMaven Inc., a Boston-based company that consults with large businesses about their online strategies. Until recently, Rossetti says, the attitude of IT departments was, "If you ask me the right question, I'll tell you the right answer."

Cherri M. Musser, CIO at eGM, a division of Detroit-based General Motors Corp., agrees. "A lot of times, businesspeople tell you the symptoms," Musser says. "If you don't understand the underlying business needs, you may go off and code or buy a packaged application" that addresses the reported symptoms but fails to solve the larger business problem.

That won't cut it in an e-business world, experts say. Today's CIO must anticipate the question, figure out what the business executives really want to know (for instance, when the marketing department pleads for more clickstream data, what they really want is more information on customers and prospects - and finding this information may have little to do with the clickstream) and even help answer questions the rest of the board would have never raised.

According to Chet Bloom, an account manager at New York-based recruiter Carlyle Consulting Services, most technologists lack some skills that are crucial for today's corporate officer: the ability to negotiate, communicate and delegate. "[Techies] are intellectually far superior," Bloom says. "But you get them on the phone, and they're socially inept."

It's clear that over the past five years, the IT department in general and the CIO in particular have made great inroads in the corporate mind-share department. It wasn't so long ago that many business executives questioned the very need for a CIO - as long as the company was making payroll and churning out the needed reports, the grumble went, what was the big deal? Why did that quiet guy from the data processing department need to be a chief all of a sudden?

But then came electronic data interchange (EDI), which boosted the value and prestige of information - even to those who had remained blissfully unaware of the shifts brought about by client/server computing. Hot on the heels of EDI was the World Wide Web, which demanded an online presence of at least some sort. The floodgates were opened, and a tumble of IT-related issues - customer relationship management initiatives, Y2k, online exchanges that offer opportunities to reduce supply-chain costs, a drive by many businesses to run the entire enterprise off a single database - made it clear that having a board-level executive in charge of technology was mandatory.

For obvious reasons, the overwhelming majority of CIOs have risen through the IT ranks. One of the most important chores of CIOs in their brief history thus far has been understanding and explaining technology to other executives, especially the CEO.

But that's changing. "How does it work?" is an obsolete question. Now and in the future, "Can it get us where we need to be?" is much more important. And this is where many CIOs fall down.

"A lot of CEOs over the past 15 years have been frustrated by what they're getting out of IT," says Dave Caruso, an analyst at Boston-based AMR Research Inc. "They understand the value of technology. They've spent tens of millions, or even hundreds of millions, on IT." And they're not satisfied with where the investment has gotten them. Why? The classic IT guys, Caruso says, "focus on the technology and . . . have difficulty translating the investment into language execs can understand."

CIO Kaplan calls this "the accidental arrogance of the [IT] practitioners - they know how the stuff works but don't have a clue how someone's going to use it."

First act

The shift away from hard-core technologists in the CIO's office is in its early stages. EMaven works with dozens of Fortune 500 companies in different industries, and Rossetti says she can't think of a single non-IT CIO. Caruso agrees that at this stage, it's rare to see a former business or marketing executive stamped with the actual CIO title. Tim Peacock, vice president of development at Woburn, Mass.-based Intranets.com, a services firm for small businesses, has an extensive technology background and says that as far as he knows, almost all his peers do, too. "I haven't bumped into a CIO without an IT background," Peacock says.

Early though it may be, Caruso insists, "Non-IT execs getting into IT management is a definite trend." He adds that the need to do business online is a major driver. "AMR estimates that over 50% of the Fortune 500 have e-business VPs who get pulled right out of [a line of business]," he says, adding that it's only a matter of time before more "e-business execs get pulled from the ranks to be CIO."

Carlyle Consulting's Bloom says the top CIO candidate for a "major client" (which he declines to name) is a business analyst. The candidate's experience is in finance, not technology. But he's attractive, Bloom says, because he brings sales and marketing experience to the table and knows networking - with people, that is. Companies are "looking for people with good communication skills," he says. "They can train them technically."

Rossetti says regardless of what goes on a technology officer's resume, "there's a changing role for the CIO. Historically, they've been a leader in an internal customer service organization. There was nothing about partnerships." Now there most emphatically is.

One CIO who lacks an IT pedigree agrees that while the tech officer's role is changing, traditional CIOs (CIO Classic?) are keeping up. Mark Millan, chief technical officer at WorldAG.net, an agriculture exchange portal set to launch this spring and based in Sonoma County, Calif., has a background in publishing and marketing.

"In the past," Millan says, when he wore the marketer's hat, "I worked with CIOs. They were historically very linear. They weren't always looking at the big picture. But that's changed in the past two or three years."

New tricks

With technology more important than ever, and with so many interdependent decisions facing the IT department - infrastructure, packaged applications, systems integrators (and other potential partners), outsourcing and application service providers, to name a few - why would organizations consider naming a CIO who lacks heavy technology knowledge?

As discussed earlier, many CEOs are dissatisfied with the bang they've received for their IT investment buck. Some are willing to take a chance, to try a CIO who brings different strengths to the table. And the most sought-after strength, by far, is the ability to view IT not as an end, but as a means to accomplish business goals. Remember Rossetti's line about old-line CIOs: "Ask me the right question, and I'll tell you the right answer." The mantra for New Age CIOs, meanwhile, is, "Tell me where the organization needs to go; I will use IT to help us get there."

Millan says IT "isn't just about automating processes, it's about serving the customer in a 360-degree manner." To many IT veterans, that may sound like typical marketing fluff, the vague pie-in-the-sky stuff that makes hard-nosed programmers roll their eyes in team meetings - which is exactly why Millan is a chief technology officer.

Creating a technology landscape that can serve customers in a 360-degree manner is an example of what CEOs seek from today's CIOs. With his marketing background, Millan says, he's "really in business to serve other people. That's fundamental for me. I'm always thinking, if I'm a customer, what do I want?"

Musser has a well-informed perspective on the challenge for New Age CIOs; she boasts extensive experience in both IT and business. And in addition to her CIO title, she is the division's process information officer of supply chain. "CIOs have always needed a good sense of business," she says. "After 10 years [working at Texas Instruments Inc.], I went back and got an MBA because sometimes [without business experience], I couldn't ask, 'What are we really doing here?' " IT managers, Musser says, can develop tunnel vision: "You're doing what you're told. You can get enamored with the technology."

Like Musser, Don McNamee might be considered a crossover CIO. As top technology executive at Lexmark International Inc., a Lexington, Ky.-based printer manufacturer, McNamee has a straightforward IT background but has thrived as a business-focused CIO. Why? "I found out the hard way," McNamee says. "I watched my bosses throughout my career. The ones who succeeded were seen [by other executives] as businesspeople. The ones who failed were considered the techies behind the black box."

These observations taught McNamee what he calls a "simple formula: You find out what are the business priorities and those metrics that the business values, then focus your IT priorities on that. Establish a dialogue with the major business players in the company; get them to see IT as a partner." And when talking with fellow executives, he says, "my conversation is rarely sprinkled with techie stuff. I never talk MIPS and clock times - you talk about how to add value to the business."

The big drawback

We know that not everyone approves of non-IT CIOs. "Anyone with an MBA can't just run an IT department," says Intranets.com's Peacock. "Any manager needs a functional understanding of what people [in his department] are doing, and in IT, the ante [for developing that understanding] is pretty high."

Musser, McNamee, Peacock and other business-savvy CIOs with traditional technology backgrounds have a secret weapon: After communicating with fellow executives on a business level, they can fall back on their deep IT knowledge when it's time to make the magic happen. The same can't be said for CIOs who are pulled from the marketing department or a line of business, and that is their glaring weakness. To their credit, they freely acknowledge this and take steps to make up for it - usually by surrounding themselves with IT experts.

"I have the mountain of my own ignorance to scale," Turkel Schwartz's Kaplan says. "I'll be outengineered all day long."

Experts' biggest worry about non-IT CIOs is that they're more likely to be bamboozled by vendors' and systems integrators' sales pitches. "Somebody has to be able to say, 'No, we can't do that,' even though a vendor just described the [allegedly] perfect solution," Rossetti says.

McNamee agrees, saying vendors "will come to you with the great solution in the sky, which will solve everything including toothaches. If you don't have your [service-level agreements] and metrics in place, you will get burned." But the same issues face even the techiest CIOs, he adds, in an increasingly fragmented IT world in which it's impossible to be an expert on everything.

CIOs who lack a technical background must take extra pains to have lieutenants they can lean on. "I have about three people who translate for me," says WorldAG.net's Millan. "I rely on members of my technical team. They just plain know a lot more than I do." Kaplan, too, says he relies on specialists for advice and is "trying like hell to hire a right-hand man" with a thorough understanding of a broad range of technologies.

Right now, corporations appear to be willing to overlook a lack of technology know-how as they seek to weave IT closer to the fabric of the business. IT professionals with an eye on the CIO's office might think hard about going after an MBA or some serious business experience; multitalented executives will soon be much sought after. "The real trick," Peacock says, "is to find people with IT backgrounds and business backgrounds." roi

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