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An important rule of thumb: pick someone who doesn't talk much about technology.
David McCann, CFO.com | US
March 25, 2010
Hiring a chief information officer may be among the most important human-resources decisions a company makes. Unlike the head of sales, a business-line leader, or even the CFO, the CIO will touch every part of the business, end to end. How that executive performs over the long term will likely have a tangible influence on financial results.
But choosing the right person is not like drafting the "best available athlete" for a sports team. There are different kinds of CIOs, and which would suit a company best depends on the type of company and its life-cycle position. That's something CFOs don't always grasp, says Martha Heller, president of Heller Search Associates, a specialist in CIO recruiting.
Most CIOs, Heller notes, can be grouped into one of three buckets. There are operationally oriented ones, who are strong in service delivery, project management, and cost control, but likely won't be good for spearheading a technology-driven company transformation. Business-oriented CIOs, on the other hand, are relationship builders, strong on information-technology governance, probably experienced in an industry, but short on technical know-how. That person is a good choice only if there is a strong IT operations team in place or an ability to build one.
The third kind, innovators, create customer-facing products that generate revenue. They're best for companies in sectors such as financial services and technology that plan to invest heavily in IT and whose products are data oriented. An innovator would be wasted, for example, at a manufacturing company that wants to reduce its IT spend to less than 1% of revenue.
What a company really needs may be a blend of skills from more than one of those groups. But it is pointless to seek a CIO who can keep costs down, help globalize or launch a new division, drive revenue, and take personal charge of everyone's BlackBerry. "There is no one like that," says Heller.
Instead, a company should focus on the two or three things it most needs IT's help with. Those should not be "get into cloud computing" or "implement SAP" but rather "increase our market share in Asia" or "learn more about our customer base." Not only will that allow you to identify the best-qualified candidates, says Heller, but the CIO will be properly directed from the start.
To hone the definition of requirements and develop interview questions, Heller recommends first meeting with business-line and functional leaders to learn their pain points around IT, which likely will be different from those that directly affect finance leaders. Then, before interviews begin, make sure everyone on the hiring committee knows what the goals are for the new CIO, so that candidates don't get mixed messages.
The interview questions should probe how candidates would address common business problems related to IT, says Heller. The following are a few examples.
Problem: The IT organization has a culture of entitlement and acting as order takers: "Just tell us what you want and when you want it — oh yeah, we can't get you that."
Question: "How have you changed the culture of your current IT organization?" In the answer, look for terms such as client focus, business focus, and accountability.
Problem: Most users are dissatisfied with some aspects of their IT services.
Question: "On a scale of 1 to 10, how would your current business community rate your IT organization? How do you know that?" An answer that cites a rigorous, methodical customer-satisfaction survey process is a good sign.
Problem: The CIO gets overwhelmed with delivery responsibilities at the expense of building relationships. If there's a major system implementation going on, the new divisional president still needs to understand how IT can support his business line.
Question: "What are your most important relationships in your current role, and how do you maintain them?" You want to hear something other than "my vendors."
Problem: The CIO champions the latest available technologies without thinking through the return on investment.
Question: "What is the most exciting technology advancement you have made?" A good answer is not IT-focused ("blade computing") but business-focused ("increased market share in a key demographic by 10% by consolidating data centers and doing business-intelligence testing").
Problem: Technology leaders use arcane terminology and acronyms.
Question: "Tell us about your views on services-oriented architecture." Listen for whether the candidate can discuss such a complicated subject entirely in straightforward business language.
Problem: Outsourcing IT services, if managed poorly, can wreak havoc on a company's balance sheet.
Question: "What are your thoughts about outsourcing?" The key is asking this as an open-ended question, because answers that are too positive or negative are red flags. The right answer is that there are pros and cons, and it depends on what you want to achieve and how outsourcing relationships are managed.
"Many CFOs look to hire a technologist to be the CIO," sums up Heller. "But that's not what they need. You want them to say as little about technology as possible, and you want to feel as if you're talking to a businessperson."