With the 32 outsiders and recently joined "understudy" CIOs, we took a close look at where they come from. What are the hiring companies looking for?
- Experience in the industry or an adjacent one, and sometimes an industry with similar characteristics (e.g., information intensity, transaction volume, security requirements). This enables the new CIO to come up to speed quickly and to offer fresh perspective.
- "Been there, done that" experience in specific technological domains, such as security and compliance, global networks, cloud computing, or analytics. This positions the new CIO to hit the ground running on key initiatives.
- Track record in an industry known for excellence in IT or in a "marquis" company known for developing excellent managers. If a company feels it or its industry in general is technologically behind, it often looks to source its CIO from a best-of-breed industry or company.
How many companies in our sample select executives with experience in their industries or closely related ones? About two thirds, including five of six financial services companies, and all four information technology companies.
Where do the other companies look for CIO material? Two media companies and a retailer tapped financial services executives. A wholesaler and a manufacturer hired oil company CIOs. Two energy companies and a transportation firm found executives with retail and consumer experience. A health industry company and a financial services firm (with several software acquisitions) recruited information technology company executives. The largest company with an outsider CIO, General Motors, tapped an executive with CIO experience at two major technology firms and the largest retailer, Walmart.
Now let's ask the question the other way: What industry experience do the newly hired CIOs bring to the table?
- Twelve of the 32 have financial services experience. For five of them, it is their predominant experience. Financial services is known for trying out new technologies and being at the leading edge, while at the same time having high regulatory and security requirements.
- Six have retail/consumer goods experience, industries with high-volume business-toconsumer commerce and often advanced analytics. Several of these CIOs have worked for "marquis" companies, such as PepsiCo.
- Five have predominantly technology industry backgrounds (and several others had stints with technology companies). Their destination companies include other technology companies, a consumer services company, and a large retailer.
- Twelve have diversified industry experience and thus bring the advantage of crosspollination. The hiring company's industry is often in the mix. For example, E&Y selected a CIO with financial services, professional services and industrial experience. Baxter's new CIO has pharmaceutical experience, as well as manufacturing and financial services. Other times, the hiring company selects a "directional" CIO, someone with experience to forward their ambitions. For example, MGM Resorts picked someone with retail and financial services experience.
Interestingly, seven of the twelve CIOs with diversified backgrounds include financial services experience, but only two include technology industry experience. Financial services, more than high tech, seems to be the "universal donor" these days.
Click here to read the full report on Fortune 500 CIO Succession.