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.
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.
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?
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?
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.
Over the years, CIOs have tended to report higher in the organization, often to the CEO, and to play more influential roles on their executive teams. Our data confirms that trend. 43% report to the CEO or President, and 30% to a senior operations executive, such as the Chief Operating Officer, Chief Administrative Officer, or Global Technology Officer. 27% report to the CFO, which is more of a historically traditional appointment.
63 Fortune 500 CIO Appointments And What You Can Learn from Them
CIOs have never been more vital to the success of your business. Meanwhile, competition for the best and brightest CIOs has never been fiercer. Vell Executive Search just published research to help companies recruit top-notch CIOs.