CIO to CEO: 56 Moving Up The LadderBy Kim S. Nash | Posted 02-15-2007
CIO to CEO: 56 Moving Up The Ladder
In This Feature:
CIOs Who Made the Leap
A new kind of CIOa blend of business strategist and operations tinkereris rising to power beyond I.T.
Making the Leap
Making the Leap
Some of today's best CIOS don't stay CIOs. Dozens of former chief information officers now fill the top corporate jobs of chief executive and head of operations. They are the first movers in the rise of a new kind of CIO: an executive who transcends the role of technology manager to become, at once, a big thinker and someone who can tune operations with technology to drive a company.
Multibillion-dollar companies like Amazon.com and Google wouldn't exist without technology, of course. But neither would the current incarnations of stalwarts such as car maker Ford Motor, trucking company Schneider National, drug-store chain Walgreen and casino Harrah's Entertainment.
As technology remakes companies, the CIO managing it now has unprecedented visibility and career opportunity. But populating the corner office with former information-technology leaders doesn't guarantee success. It's unclear what may happen, for example, at Vantagemed or Drugstore.com, which have lost money for years and have ex-CIOs for CEOs.
Many other companies, meanwhile, are making chief operating officers and presidents out of CIOs, including Athenahealth, Fifth Third Bancorp, Microsoft, Pacer International and tool maker Snap-On. A list of 51 who have gotten such promotions starts on this page.
Lloyd DeVaux, 54, was promoted from CIO to COO two years ago at BankAtlantic, a $702 million bank in Fort Lauderdale, Fla. He says he would love to be a CEO someday. "I feel like I have to put some time in as a COO and continue to develop," he says. He has an M.B.A. and is enrolled in a three-year executive education program at Harvard. "You can't always create the opportunity, but you can be ready for it."
Steve Matheys, executive vice president of sales, marketing and customer service at Schneider National, dismisses the saw that chief information officers are mired in a techie realm, unable even to make themselves understood by peers from other parts of the company. "CIOs have a lot more business knowledge than I think sometimes people give them credit for," says Matheys, 48, who was CIO at the $3.5 billion trucking company for six years before taking his current position in 2004. He reports to CEO Chris Lofgren, who himself was Schneider's CIO for four years.
"When I was CIO, I was spending 70% of my time on business issues and 30% on technical issues," he says. "I.T. writes the code that executes the rules of the business. Extremely deep insight comes from that."
Still, only some CIOs can make the leap. Certainly, chief information officers who report to CEOs and work on strategy teams with the company's most senior executives can flourish in straight business jobs, according to Vivian Stephenson, a former CIO at department stores Mervyn's and Target. She went on to be chief operating officer at Williams-Sonoma for three years before retiring last June.
Such CIOs know business and know how the company works, says Stephenson, who has also done leadership development consulting and sits on the boards of CarMax and the California State Automobile Association. For example, they can recite the order-to-cash cycle and what's involved from the point of generating a sales lead to closing a deal. The clincher, she says, is that they also know where the inefficiencies are in those areas that hold the company back. Corporate boards pay to find CIOs like that, wanting to groom them for bigger roles.
"As companies become more dependent on technology, the CIO is indeed a potential successor to the COO and even CEO," says Paul Groce, a partner at Christian & Timbers, an executive search firm in New York. Groce specializes in placing CIOs. "Clients are asking for [such] candidates," he says. "That's a very different model than in the past."
And good luck to those CIOs still buried in the technology boiler room as glorified project managers, reporting to the chief financial officer. "A CIO who concentrates on the technical side at the expense of understanding their businessI don't think they'll be around for long, even as a CIO," Stephenson adds. "And they wouldn't fit in the non-I.T. offices."
Yet such a technology leader, dreaming of bigger things, might not realize what he lacks.
Bruce Skaistis, founder of eGlobal CIO, a consulting firm in Tulsa, Okla., tells the story of one information chief who was made president of a new business unit at the travel services company he worked for. Though he had no marketing or sales experience, the former CIO insisted on devising advertising plans and being involved in major sales activities, says Skaistis, who consulted at the company. "The initial marketing and advertising was a disaster, and he couldn't blame anyone but himself," he says. "Sales were very slow at first, and many of the salespeople bailed out." Forced to resign, the executive has left the travel business but is back in I.T., according to Skaistis.
CIOs can falter outside of technology because they're unwilling to delegate or unable to strategize for an entire company rather than just one department, according to Shawn Farshchi, chief operating officer of Coremetrics, a marketing statistics and software firm in San Mateo, Calif.
Farshchi, 49, was CIO at DHL Airways, BroadVision and WebEx, and says each of those jobs brought a succession of increasing business responsibilities. These included product management at BroadVision, which makes Web software, and making sales calls on potential customers at WebEx, the online conferencing service. "Some CIOs can't bring themselves out of the technology world," he says. "I got to appreciate the non-technical aspects of life."
Like Ivy League alumni, CIOs who break into non-technical senior ranks advocate for CIOs coming up. Farshchi, who took the COO position at Coremetrics last year, hopes to hire a chief information officer soon at the growing company. And when he does, he will make sure that person reports to him, not the chief financial officer.
"I want someone who will be part of executive staff because I'll tell you, the CIO is a critical function in a company," he says. "Done right, it adds huge value to the business."
But, he adds, "I'll be tougher as a boss for a CIO because I have pretty high expectations without any kind of hesitation that maybe they're not possible."
The List of CIO
The List of CIO Leapers
Fifty-six CIOs who have moved into positions of greater power. This list is in chronological order beginning in 1996.
|EXECUTIVE||WAS CIO AT…||BECAME...||WHEN|
|Sr. VP Product Management, Hollywood Entertainment||1996-1998|
|President of Strategic Planning, Hollywood Entertainment||1998-2000|
|Sr. VP Business Development, Hollywood Entertainment||2000-2003|
|President and COO, Hollywood Entertainment||2003-2005|
|CEO, Hollywood Entertainment||2005|
|BILL RADUCHEL||Sun Microsystems
|Chief Strategy Officer, Sun||1998-1999|
|Chief Technology Officer, AOL Time Warner||1999-2002|
|Chairman and CEO,
|President and CEO, Giga Information Group||2002-2003|
|President and COO, Evans Data Corp.||2003-Present|
|President of merged Hewlett-Packard/Compaq||2002|
|Chairman and CEO, WorldCom||2002-2006|
|BRUCE PARKER||Ryder System,
|Exec. VP, Sapient||1999-2002|
|Managing Director, IT Management Group LLC||2002-2006|
|Chairman and CEO, AirNet||2006-Present|
|Chairman and CEO, The Research Board||1999-2000|
|President and CEO, Switch and Data Facilities||2000-2004|
|CHRIS LOFGREN||Schneider National
|CEO, Schneider National||1999-Present|
|JACOB SCHORR||Spirit Airlines,
|CEO, Spirit Airlines||2000-2006|
|STEVE SCHUCKENBROCK||Frito-Lay, 1995-1998
|COO, The Feld Group||2000-2003|
|Sr. VP Global Services, Dell||2006-Present|
|VP Strategic Planning, Whitney Information Network||2002-2003|
|VIVIAN STEPHENSON||Mervyn’s, 1989-1994
|CEO, Sam’s Club||2003-2005|
|ASIFF HIRJI||TD Ameritrade,
|COO, TD Ameritrade||2005-2006|
|President, TD Ameritrade Client
|COO, Trumbull Services||2004-2005|
|President, Trumbull Services||2005-Present|
|LLOYD DEVAUX||Union Planters,
|MICHAEL CURRAN||Boston Stock
|COO, Boston Stock Exchange||2003-2004|
|CEO, Boston Stock Exchange||2004-2005|
|Chairman and CEO, Boston Stock Exchange||2005-Present|
|MEHRAN ASSADI||Provident Mutual,
National Life Group,
|COO, National Life Group||2004-2005|
|President, National Life Group Life and Annuities unit||2005-Present|
|STEVE MATHEYS||Schneider National,
|Exec. VP Sales, Marketing & Customer Service, Schneider National||2004-Present|
|DAWN LEPORE||Charles Schwab,
|Vice Chairman, Schwab||2001-2004|
|President, Chairman and CEO, Drugstore.com||2004-Present|
|JEFF HOWKINS||Mellon Financial’s
|VP Risk Management, Old Mutual||2003-2004|
|COO, UPromise Investments||2004-Present|
|MARK CAMERON||VantageMed, 2005||COO, VantageMed***||2005-Present|
|ALEX MUNN||Pacer International,
|COO, Pacer International||2005-Present|
|ANTHONY MANESS||Jameson Inns,
|VP Hotel Operations,
|AL BILAND||Snap-On Tools
|President, Snap-On Tools Co.||2005-Present|
|JOHN SPENSER||Medicals Direct,
|Chief Administrative/Technology Officer, Hooper Holmes||2005|
|COO, Hooper Holmes||2005-2006|
|PAUL FUSCO||J. Crew, 1999-2005||COO, CRS Retail Systems||2005-Present|
|MARV ADAMS||Ford Motor Co.,
|Adds head of Corporate Strategy title at Ford||2005-2006|
|Exec. VP North American Operations, Wendy’s||2005-2006|
|CFO, Wells-Gardner Electronics||2005-Present|
|JEAN STRICKLAND||Seacoast National
|President and COO, Seacoast National Bank||2005-Present|
|JOSEPH SIEBERT||Viacom, 2002-2003
|COO, Home Decor Products||2005-2006|
AOL Time Warner,
|Chairman and CEO, Technology Solutions Co.||2005- 2006****|
|DEBORAH DINSMORE||Sterling Bank,
|Director of Operations, Sterling Bank||2006-Present|
|RHONDA BASSETT-SPIERS||BEA Systems,
|GREG CARMICHAEL||Fifth Third Bancorp,
|COO, Fifth Third Bancorp||2006-Present|
|COO, Element Payment Services||2006-Present|
|VP Services, Sentillion||2006-Present|
|JOHN MURDOCK||GMAC Insurance’s
|President, Systems Task Group||2006-Present|
|MARC KATZ||Foot Locker,
|CFO, A.C. Moore||2006-Present|
|JAMES MACDONALD||State Street Bank,
|Partner, Computer Sciences Corp.||1999-2000|
|Chief Integration Officer, Harrah’s||2004-2006|
|President, Ameristar Casinos||2006-Present|
|BILL PIERONI||Aon Corp., 2005-
|VP Operations, State Farm||2006-Present|
|JOHN LATHAM||Markel Corp.,
|Sr. VP Operations, Markel||2006-Present|
|WENDY CEBULA||VistaPrint, 2000-2006||COO, VistaPrint||2006-Present|
|STEPHEN DAVID||Procter & Gamble,
|ELBERT SIMPSON||PSEG Services,
|President and COO, PSEG Services||2007-Present|
|Head of Client Satisfaction and Quality, Accenture||2003-2004|
|President and COO, BearingPoint||2007-Present|
|Chief Operations and Administrative Officer, Sapient||2007-Present|
|GUI KARYO||Marvel Entertainment
|VP Operations, Majesco Entertainment||2007-Present|
|RANDY MCGARRY||BSC Services Corp.
|COO, BSC Services Corp.||2007-Present|
Mark Cameron, COO, VantageMed
How He's Done: Cameron, 51, joined VantageMed as CIO in early 2005, and three months later was promoted to chief operating officer. He still oversees internal information technology at the health-care software vendor, as well as product development and customer services. It's a big job, especially in a turnaround situation.
VantageMed had purchased 26 companies from its inception in 1995 to 1999, "but did a poor job of integrating them," Cameron says. "There were a number of areas where we were spending too much money. We had to figure out how to best apply resources and where we didn't need resources."
The "we" refers to Cameron and VantageMed chief executive Steve Curd. The two have worked together for 20 years, starting in I.T. at American Airlines in the 1980s. They also teamed up in the late 1990s at HealtheonWebMD, where Curd was COO and Cameron oversaw technical services. Three months after Curd took over as CEO of VantageMed, he coaxed Cameron aboard.
Cameron and Curd combed VantageMed's product line, looking to kill unprofitable software and services. They culled products built on older server technologies, for example, and reduced the line to Windows-only software. In 2005, the last full fiscal year reported, gross margins on software topped 63%, up from 49% in 2004.
Yet, VantageMed is still looking for its first profitable year. "We took it on to turn it around," Cameron says. "We've got everything positioned properly. Now, we'll do what we need to grow."
Dawn Lepore, CEO, Drugstore
Schwab & Co.
How She's Done: Drugstore.com has yet to book a profitable year. But the nine-year-old health and beauty company may finally become profitable in 2008, analysts say. If so, a lot of the credit will go to Lepore, who joined Drugstore.com in 2004 and has helped drive up the company’s average customer sale by $4, to $78 in 2005 from $74 in 2003.
Lepore, 52, evidently has the board’s confidence. In early January, it gave her a retention grant of stock options along with a $50,000 raise, to $400,000 from $350,000. The company declined requests for interviews.
Lepore, who oversaw information technology as CIO and vice chairman for 11 years at Schwab, isn’t the first former CIO to lead Drugstore.com, an Internet company created just before the dot-com bust. Her predecessor, Kal Raman, rose from Drugstore’s chief technology officer to COO to CEO during his six years there.
In remarks to financial analysts late last year, Lepore said she considers I.T. a necessary investment for her Web site. “To me, this is our store,” she said. “So, just like a brick-and-mortar store continues to invest and remodel, we have to continually add to our Web site. That’s how we continue to delight our customers. It’s important we pay attention to that.”
Lloyd Devaux, COO, BankAtlantic
Formerly: CIO, BankAtlantic
How He's Done: DeVaux, 54, has planned his career with care. He took his bachelor’s in electrical engineering to the oil business, where he worked in computer exploration of oil fields. Next was IBM, where he scoped custom applications for clients for six years. Along the way, he got an M.B.A., thinking the finance skills would enhance his value.
During his seven-year stint as CIO of Union Planters, a Memphis, Tenn.-based bank, DeVaux fashioned himself as a consultant, talking with loan managers, retail bankers and other operating groups about their plans and how he could help with technology. When he moved to BankAtlantic in 2001, he says, he came with the understanding, though no guarantee, that the COO position would be his to earn.
“After you move from a pure technology CIO to a tech-business bridge, the next logical step is to move over to the business side,” he says. Now, with more than two years in as COO, CEO is his next goal. But he’s cautious, saying he needs several more years leading operations before he can feel ready to make the leap.
To other tech executives who want to climb, he advises picking up profit-and-loss responsibilities at some point, to demonstrate that you can be accountable for results. Also, cultivate a successor for your current job, so when upper management looks at you for a promotion, DeVaux says,“They can say, ‘He’s ready and now’s the time.’”
Maynard Webb, CEO, LiveOps
Formerly: CIO, Gateway; COO, eBay
How He's Done: He’s a freshly minted CEO, joining LiveOps in December, but Webb, 51, doesn’t plan to change much about his management style or view of business. Webb has a long history as a CIO, having held the job at Bay Networks and Gateway. He led the technology division of eBay for three years, and then managed operations there for four more.
“I don’t think people saw me as only the tech guy,” he says. “One thing I’ve worked with my teams on—and I’ve said this here already—is, how do I make sure no one in the same circumstance with the same dollars can do it better?”
That outlook meshes well with the core concept behind LiveOps, a venture-funded callcenter hosting company in Palo Alto, Calif. LiveOps provides customer support operations to companies, using 9,000 agents who work at home, connected via the Internet. The company trumpets itself as a domestic, reasonably priced alternative to outsourcing call-center operations to India.
That mandate calls for ruthless efficiency. As Webb puts it, “I’m a huge fan of making and keeping aggressive commitments.”
Webb says his technology background makes him more understanding than the average CEO of the struggles I.T. faces to deliver projects. “But,” he adds, “I’m probably scarier as their boss because in many cases I’ve done their job and done it at scale, and I’m not interested in not having it done well at this scale.”