The Chief Information Officer has evolved from pure information technology management into a central business role. The CIO is responsible for managing the information systems and technology platform that enables everyday business operations, while at the same time finding ways to leverage more cost-effective technologies, more versatile software and better management methods as they emerge. That ongoing challenge of "changing the engine while the jet is flying" is only the more technical side of the role.

Digging into data always reveals interesting - and sometimes surprising - patterns. In studying this set of recent CIO appointments, here are the points that stand out:

We find differences between insider CIOs and those who join the company to assume the role. 56% of the CIOs were insiders, 44% newly joined. Note that we group with the insider CIOs two executives who made lateral moves into the role from running business units, as well as a CFO who assumed the CIO responsibility when the CIO role was eliminated.

Tuesday, 04 June 2013 15:59

Do Fortune 500 CIOs Come From Business or IT?

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Just as interesting is the difference in degree of business background between insiders and outsiders. All of these CIOs are versatile executives, and many have experience in business roles outside the IT function. When we examined individual backgrounds, we found the preponderance of career experience for most CIOs has been in technology organizations. However, there are 13 whose backgrounds are primarily in other business functions—finance, engineering, general management, and others. All 13 were insiders, and, as noted earlier, nearly two-thirds report directly to the CEO/President. And all 13 are in companies over $10B in revenue.

It should be no surprise that these CIOs are well-educated and well-rounded executives with combinations of business and technology education. Nearly 70% hold one or more advanced degrees, and two hold PhDs. Two-thirds of these advanced degrees (29 executives in all) are MBAs. Among the non-MBA Master's degrees, five are in computer science, and the others are in a variety of disciplines, including engineering, public administration, HR, cognitive science, and transportation management (JetBlue's CIO). Undergraduate majors cannot always be determined, but the most common are computer science and business, and we estimate that about one-third of these CIOs have undergrad or graduate degrees in computer science.

We've mentioned a variety of correlations to company size. In this section, we summarize them.

Tuesday, 04 June 2013 15:48

Which Industries Create the Most Attractive CIOs?

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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.

We examined 63 corporate level CIO appointments (in 62 companies) between January 1, 2011 and June 30, 2012. The full list is at the end of the report.

36 of the 63 CIOs (57%) have prior CIO experience at the divisional or corporate level. There is little difference by gender or age or company size in the percentage that have experience, and the only difference in education is that first-time CIOs tend to be more educated, including as MBA holders.

The popular conception is that CIO has become a short life expectancy role, so we examined the tenures and next destinations of the CIOs preceding our set of newly appointed ones. Our data provides a richer picture. Nearly half (47%) had tenures of 3-6 years, and another 23% had longer tenures (the longest being 16 and 14 years at CA Technologies and Marriott, respectively). The average tenure was about 5 years, but it was closer to 4 in the largest company segment.

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