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Why Don't More CIOs Become CEO?
Posted by
CmdrTaco
on Wed Jan 24, 2007 12:17 PM
from the because-they-know-better dept.
from the because-they-know-better dept.
jcatcw writes "Thornton May is mystified by the very small number of Fortune 500 companies that led by former CIOs. "Knowing what we know about CIOs — that is, that most are smart, hardworking, supremely aware of how the business works and increasingly savvy regarding the workings of external customers' minds — the failure of more CIOs to become CEO has to be one of the biggest mysteries of our age.""
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how about (Score:5, Interesting)
Re: (Score:2)
At least that's true of most of the CIOs
No, how about (Score:5, Insightful)
Parent
Re: (Score:3, Informative)
The real problem is that in most companies, the entire IT organization is seen as a corporate support cost center, like janitorial services.
Among MBAs, it is an old joke that CIO stands for "Career Is Over." If you're head of products, marketing or sales, you're seen as doing something "core" to the business and its value to customers. If you're CIO, you're seen as managing the IT department and technical product and service vendo
Re:how about (Score:5, Insightful)
And gets punished with an $80 million severance package and a lateral move to another CEO position.
KFG
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Re:how about (Score:5, Funny)
Actually, 80% of CEOs never worked in the first place...
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Re:how about (Score:4, Informative)
Actually, I'm putting off writing a Corporate Goverance paper for a boring third-year law school class, and thought I'd try and inject some fact into slashdot. Maybe a futile endeavour...
Those are fairly well-known stats, check google scholar for "CEO tenure" or papers like:
The Impact of Regulation on CEO Labor Markets, The Rand Journal of Economics, Darius Palia
Stable URL: http://links.jstor.org/sici?sici=0741-6261(200021
Just one of many...
Parent
Who does the picking (Score:5, Insightful)
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Re: (Score:3, Interesting)
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Furthermore there's the nerd factor. We techies will always be seen as 'a bit strange'. When I joined the organisation I'm with now I was give an indoctrination course which included examples of unconcious prejudice. One of the examp
Re:Who does the picking? (Score:5, Informative)
I sorry, what? AFAEK [wikipedia.org], the Board hires a CEO to run the company. Members of the board themselves are elected by the general meeting of shareholders.
Parent
Re:Chairman and CEO? (Score:3, Insightful)
Furthermore:
1. The shares of stock in a corporation that have the ability to vote is usually a separate class of stock. Please examine your stock certificates carefully!
2. Major chunks of voting blocks of stock are held by select few in the average corporation. General meetings are practically meaningless.
3. Corporate charters typically forbid the collection of more than a meaningless bloc
Re: (Score:3, Insightful)
But you are, because you're better than them? Mr. Pot? Mr. Kettle. Mr. Kettle? Mr. Pot.
Re:Who does the picking (Score:5, Informative)
According to the September 16-17, 2006 edition of the Wall Street Journal's Weekend Edition, about 20% of the CEO's of the top US companies have engineering degrees.
I've also seen articles that mention that companies that are led by engineers tend to report better earnings than companies led my non-engineers, but that was in the days of Jack Welch (former CEO of GE).
Parent
Re: (Score:3, Insightful)
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Are you saying that the concept of 'Autism Spectrum Disorder' doesn't exist? Because the experts I've heard on this topic says that the diagnosis ranges from high functioning Asbergers to the type you describe.
Bill Gates is known to show some symptoms of what some people (perhaps n
Re: (Score:3, Insightful)
I have to disagree. After a lifetime of being picked on for being "different" and smart, its a case of fear. Not elitism. It's a case of fear of failure, and choosing to go with one's known strengths instead -- which doesn't include soci
Maybe it's not a "failure". (Score:4, Interesting)
We wouldn't be geeks if we didn't enjoy working with the new equipment.
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Re: (Score:2, Insightful)
Of course it's their loss. Those companies that are a bit more insightful and can see what a CIO/CTO can bring to the table, will be better off for it.
It's no mystery (Score:4, Informative)
Not at all. CEOs are hired by boards of directors, the vast majority of whom are not comprised of current or former CIOs. It's the same reasoning that has lead to the grossly inflated paychecks and bonuses that we see CEOs getting today: many members of the board have apirations to becoming a CEO. It's a continuation of the "old boys' club" on an even more pervasive scale. Until shareholders start demanding different behavior by voting with their investment funds, the situation isn't likely to change.
The numbers game (Score:3, Insightful)
For the same reason F&A VPs don't become CEOs! (Score:5, Insightful)
Most CEOs are former SALESMEN. Check out their careers. You'll see that most, if not all, were in Sales or Marketing at one or more points in their careers.
Boards NEED someone at the top of the company who understands what Sales and Marketing NEED. After all, no matter how superior your product is *cough*betamax*cough* if it does not sell, your company goes down the tubes. Not the internet tubes, the other kind.
No big conspiracy here. Just boards doing what they have always done.
Re:For the same reason F&A VPs don't become CE (Score:5, Interesting)
CEO's come from a company's profit centers- sales and marketing. COO's come from a company's cost centers- operations, production, and IT. COOs rarely jump to become CEOs. The board that picks the CEO is almost always interested in maximizing profit, never interested in minimizing loss.
Parent
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Not the CIO's Job (Score:2)
Wrong skill set? (Score:4, Informative)
The similarity between CEOs and sociopaths has been pointed out before. From a Psychology Today article [findarticles.com]
I'm not that surprised, it's a support job (Score:4, Insightful)
I don't really see it that way. Unlike the CEO, CFO, President, board members, etc., the CIO's focus is internal rather than external. The CIO's "customer" is generally his or her own company itself. Why would a company risk promoting someone who's focus is inward-looking into a position where they have to look outwards as well?
Not in the right Department (Score:2, Interesting)
It's why you only see fighter pilots at the top of the Air Force and past carrier skippers at the top of the Navy, etc. You could be a great transport pilot, sub driver or the logistics guy that ran the Berlin Airlift, but you'll never make it to the top.
Why? I guess you could call it "Institutional Bias".
Proficiency at .... (Score:4, Funny)
I'd rather... (Score:4, Insightful)
I'd rather choose a person who know business than one who knows computers to lead a company. True, a LOT of businessmen are incompetent and don't know squat about anything, but at the end of the day you have to see a business through a businessperson's eyes. That means taking into account issues which might not be regularly considered by other experts.
Look, I'm a computer guy and I despise the fact that many people cannot understand the difficulties in my profession, but I do know that you have to get your shit straight to negotiate with salesmen, accountants, and clients, while projecting the ideas of a company and making sure that all specialties within a company are working fine. Like computer professions, business has aspects that are more art than science, and talented people can squeeze it for all its worth.
Why dont more {X} become {Y} (Score:3, Insightful)
Because {X} don't want to.
Because {X} didn't contain enough individuals with the correct aptitude.
In this case (rarely enough) there is a plausible third answer:
Because finance directors know where the skeletons are buried and sales directors put them there in the first place.
But I'm still betting that nearly 100% of the reason is caused by the first two generic points.
Re: (Score:3, Funny)
Talking the Talk, Dropping the Walk (Score:3, Insightful)
Pure technologists rarely learn to dumb down like that. Partly because the knowledge itself is the most valuable, not the person who has it. Partly because tech is a language itself, which suffers from obfuscation and euphamism. So do the other technical communications, like finance and management, but those execs have long ago learned to ignore the imprecision and downright coverups, unless they feel their own power directly threatened by it.
CIOs are much more like other execs than like other technologists. The most successful ones are those least competent in tech itself, preferring instead to work on social competence like the rest of the execs with whom they deal. But the other execs still don't trust the CIOs, because they are still more likely to tell the truth about the core business, or just something else the rest of the execs don't understand, which would make the majority of the power holders look bad.
Eventually CIOs will become as disconnected from the technology and its culture as are the rest of the execs from wherever they draw their power. Then CIOs will become CEOs more often, like CFOs and CMOs (though marketing execs hide their pedigree for exactly the opposite reason, confirming the duplicity). Eventually no one will know what they're talking about when they spout expertise, but they will know each other very well. CIOs will win, and the products, the company, and the customers will all lose.
CIO to CEO, CIO probably spent time outside of IT (Score:3, Interesting)
No argument there.
No, they are supremely aware of how one segment of the business works. An important segment, but still a limited view.
No, that would probably be sales/marketing or operations depending on the nature of the business.
I'd suggest pondering a company that has been an aggressive and pioneering user of IT since 1969, Wal-Mart. Despite being one of the most consistently successful firms with respect to IT, their long term strategy has been that IT is a temporary assignment. That managers are "merchants first", something else secondarily. Now a side effect of this is perhaps to spread IT knowledge throughout management.
I would argue that business success is largely based upon stategy, and IT is more of an implementor of stategy, not as much a formulator of strategy. IT skills are valuable, but being a people-person, a motivator, a leader, is critical for a CEO. I'd wager that if we took a close look at those CIOs who rose to CEOs we would find a lot of experience outside of IT. One long term stategy for becoming a CEO is to take stretch assignment outside of one's comfort zone, to work in more than one discipline within the company. I expect that CIO was merely the last such assignment, not that someone spent an entire career in IT and became CEO.
Elementary, My Dear Watson (Score:5, Funny)
I'm pretty certain I made up a few words there, but if I said that to a CEO s/he'd likely nod and say "Why, you're absolutely correct!"
And that's why CIOs can't obtain the CEO position.
......nerds (Score:3, Interesting)
Same reason why the mail boy will never be CEO (Score:2)
Re: (Score:3, Insightful)
Well, there's David Geffen, but he's kinda unique; and moved from mailboy to sales to founder.
The American dream is a lie
Well yeah, the current version of working hard to qualify for a mortgage on a cardboard and foam "house" full of rubbish and hanging on until you can qualify for a reverse mortgage and then all of your dreams of money, power and glory will come true in your "golden years" is a lie.
And a very useful one to a handful of people for whom you s
CEO pools (Score:2)
I'm amazed he's amazed (Score:5, Insightful)
The CIO, on the other hand, is very inward focused or, if recently enlightened, certainly has an inward focused background. It's about code and deadlines and infrastructure support. These are the guys who oil the pumps and valves that keep that whonking 100,000 HP steam engine in the bowels of the ship working. They don't stear the ship. They don't decide where it's going to go. They don't even have to know the mission. They are responsible for making sure it gets there in good shape. In many cases, they don't even have time to go above deck and look outside.
It is very rare for an engineering officer to make Admiral, even rarer for a supply officer or personnel officer, or, for that matter, a medical officer or JAG. These are all support roles, and if you've done your homework, you KNOW THAT IN ADVANCE. Admirals come from the surface warfare officer community or, in the case of carriers, through the aviation route. It's the same in the army: Schwarzkopf was an Infantry Officer, not a technician, who, incidentally, in the lower ranks is ALWAYS subservient to an infantryman of the same rank.
If a potential CIO is interested in doing the CEO thing, the best thing for him or her to do is make sure he or she gains significant experience outside the CIO ladder. A significant stint in accounting, personnel, or an "assistant to the CEO" type position will show significantly in the bid to become CEO. Narrowly focusing on just IT will never get you to the Board Room.
I know many of you don't like this. From an idealistic point of view, it's "wrong." because, as anyone here knows, IT people are the smartest, sharpest people ever to walk the planet who KNOW how the world works, REALLY. They deserve to become CEO, and if they don't, there's something wrong with the system, not them, and certainly not their attitude. But as a Board Member (or head hunter) I'm not really interested in whether you know C++ or even if you have managed to keep the servers online 24x7. (Can you imagine a bid for CEO: "I know C++ and Open Source is the way to go and Linux is cool and Bill Gates is an idiot capitalist pig dog.") The fact that you are a proven manager of infrastructure issues is great. That's what is expected of you. Keep doing that. Swap out my PC any time you want. But I want someone who knows precisely where the ship is going for CEO.
The bottom line is that there's a heirarchy out there that exists in every walk of life. Laws to fix heirarchy are artificial; the heirarchy is still there. If you are not the CEO then either you didn't want to be (not always a bad thing?) or you screwed up in your perception of what was necessary to get you there. Whining about it is not going to "fix" anything. Perhaps a little introspection will.
Re:That's easy (Score:5, Insightful)
The job of a CEO is to paint a glowing and radiant picture firmly grounded in the hopes and dreams of investors, and protect it from those who would engage in critical thinking. The person who becomes a CEO is the person who has made it their lifes work to understand what others want and convince them it is just around the next bend, thus eliciting their ongoing co-operation.
Someone who has forged themselves into CIO material is most likely not going to be very good or happy at the CEO job for that reason. They require different personality strengths.
I often contemplate how we as a society can structure things so the guy who is telling the truth is a more effective organizational representative than the guy who likes to spin lies and half-truths. No answers yet..
Parent
THat's easy, wrong degree (Score:4, Interesting)
'Those who want to work for someone else go into engineering/IT; those who want others to work for them go into the arts.'
If you don't believe me go check out the Forbes 500 richest people list and see how many of them either dropped out or have liberal arts degrees. http://www.forbes.com/lists/2003/02/26/billionair
Now excuse my while I go round up some flame-retardant clothing.
S.
Parent
You become CIO Because of what you do (Score:3, Interesting)
Hi, Yale! Hi, Wharton!
Re:That's easy (Score:4, Insightful)
Part of the answer involves making them obsolete as a role.
The general idea I have is to:
a) allow people to vote on every issue if they wish, and give them the necessary transparency of process to allow them to do so to the best of their abilities.
b) allow people to delegate their vote to anyone they trust, not just those who signed up on the ballot.
c) allow those who have votes delegated to them (ie they were voted for) to cast their vote on issues the same way before, but add the weight of their personal electorate to their votes.
d) allow people to revoke their vote for a person any time they feel their values are being betrayed by those they elected, allowing them to either cast it themselves or re-assigning it to someone else.
This deals with the two major issues facing modern democratic process:
1) Sometimes there's no one to vote for that you trust but they get to speak for you anyways regardless of if you vote or not.
2) Sometimes the person you voted for betrays you and you have no way to remove from them the power of your support for several years without overthrowing the system.
Like I said... I'm still working on it...
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We're all gonna die? (Score:5, Funny)
Now I have a headache, thanks a lot.
Parent
Re: (Score:3, Funny)
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Do a little house cleaning and then move on to the next mystery.
Re:The reason (Score:5, Insightful)
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