Groom or Recruit? - ' Page 3 '

Given the value of continuity, however, promoting from within can make sense. The problem is that succession planning is inadequate in most organizations. Less than a third of CIOs surveyed by CIO Insight said their organizations did sufficient succession planning (though that percentage rose to 47 percent among CIOs from businesses with more than $1 billion in annual revenues). Yet more than half of those surveyed said they believed their successor would be one of their direct reports, while just 44 percent said they spent enough time preparing these would-be successors to take the reins someday.

The lax emphasis on succession planning—grooming successors and developing the careers of direct reports (who, after all, might someday be considered ready to handle the job of CIO)—is the primary reason that many organizations look outside when they have a CIO post to fill.

Some large companies pride themselves on strong succession planning, and many CIOs understand the importance of mentoring a new generation of leaders to follow in their footsteps. "Going with an insider is the best way to get a culture fit," says Mark Polansky, managing director of the information technology practice at executive-recruitment firm Korn/Ferry International. General Electric Co., perhaps the most prominent proponent of succession planning, carefully plots replacements for all C-level executives, as well as vice presidents and directors. "GE believes in building bench strength," says Jason Richardson, president of Cutting Edge Information, a Durham, N.C.-based research firm, "and we agree that there are benefits to succession planning all the way down as far as you can go."

The general guidelines of succession planning hold in IT as anywhere else. They include grooming CIO succession candidates and rotating them through the business departments. Richardson's advice: Figure out what your succession priorities are, define the skills the position will require, review your bench strengths, design the succession plan and then roll the plan out to the organization.

For CIOs, the benefits of circulating a succession-planning strategy are two-fold, Richardson says. Getting support from the board and the CEO for cross-training IT staffers underlines the relationship between IT and the business, and that allows the CIO to better help solve problems, suggest ways to improve manufacturing or delivery, and ultimately affect the bottom line. "Succession planning in IT can help counter the 'Dilbert perception' that there's a struggle between commercial operations and information operations," Richardson says. "Every IT person doesn't have to be a master of marketing and sales. But you should at least have the flavor of what it's like to be in those positions."

FedEx Corp.'s Robert Carter worked his way up through the IT ranks for seven years before being named executive vice president and CIO in 2000. "We do have a formal succession planning process," Carter says. "One of the things this allows you to do is interact with the next level of management on a formal basis. You become the sit-in at important meetings. You have the opportunity to go stand in at functions where you get experience and get to learn the types of interactions that take place at that next level."

In order to make the transition as smooth as possible, Carter also worked side-by-side with his predecessor, Dennis Jones, for several months before taking over completely. "Dennis was very gracious in letting me have as much rope I needed," Carter says. "Very quickly, he let me step to the forefront. But he was there for me if needed."

In some companies with active succession planning, the CIO takes a pivotal role in identifying and training a successor. After all, the right candidates won't necessarily be located just down the hall. At Whirlpool Corp., when former CIO David Butler wanted to retire, he helped recruit Esat Sezer, former director of global IT for Colgate-Palmolive Co. Earlier in his career with Colgate-Palmolive, Sezer had led projects in South Africa, Russia, Poland and Turkey. He had also worked as a senior consultant for Andersen Consulting (now Accenture) in London. That breadth of international experience was needed at Whirlpool, where 40 percent of revenues now come from outside North America.

But before Sezer took over the CIO's job at Whirlpool, he worked for nearly two years hand-in-hand with Butler, until Butler retired last September. The result was a smooth transition during which Sezer gradually took over the CIO's duties and, according to company officials, was mentored by Butler at the same time. The two attended meetings together both at Whirlpool and externally with clients, and, last year, at a CIO leadership summit at Dartmouth University, Butler introduced his successor to CIOs from other organizations and discussed the benefits of succession planning, according to the Center for Digital Strategies' Johnson.