Building Business Acument

By Thomas Hoffman  |  Posted 03-11-2010

IT Leaders: Building the Next-Generation Bosses

Leading in tough times is hard enough. What's especially daunting for CIOs: keeping leadership development programs funded and viable when budgets are being slashed and organizational focus is moving elsewhere.

Leadership development programs tend to fall within most organizations' training budgets--which continues to get chopped just as spending on new project initiatives is starting to see a lift, says Bill Pelzar, vice president of executive programs at Gartner. "There's no question that's the case right now," he says.

"It's very difficult," adds Manjit Singh, CIO of Chiquita Brands International in Cincinnati. "As budgets get cut, more of the discretionary spend is reduced, and training is an area that gets hit early on." Chiquita does most of its internal training on an ad hoc basis, he says.

Still, the lack of funding isn't necessarily tied to the economic downturn. "What we see across the country--and this has been going on for years--is that organizations don't want to fund as much education as they have in the past," says Art Langer, senior director at the Center for Technology, Innovation and Community Engagement at Columbia University (and columnist for CIO Insight).

And while some employers continue to cherry-pick their top prospects for IT management programs at Columbia, other CIOs have questioned the value of sending their best prospects to weeklong executive courses at top business schools. Langer says Columbia has addressed those concerns by devising a three-day "CIO Institute," which invites IT chiefs and their direct reports to brainstorm on "provocative issues."

A more effective model, says Langer, is a "sustained" approach, whereby an emerging IT leader receives formal education through a university-developed executive program but is able to apply it at work, where he or she also receives mentoring.

"My motto has always been that institutions of higher education educate but don't always train, and corporations train but don't always educate," Langer says. "We need to bring those two closer together."

On the Cheap

For many CIOs, budget pressures limit the amount of external training that's available for their top managers. Pelzar recommends that his clients "triage" their IT staffs and set aside training funds for people they wouldn't want to lose under any circumstances.

"It's a matter of picking favorites in some cases," Pelzar says.

Mentoring is another valuable approach CIOs use to develop fast-tracked IT staffers and managers without committing an abundance of capital. During his six-year tenure as CIO at Medco Health Solutions in Franklin Lakes, N.J., Mark Halloran oversaw a cross-functional mentoring program in which every director and vice president in the IT organization mentored a more junior employee. Under this scenario, a vice president of e-commerce may have served as a mentor to a manager in the billing department.

Read more about Halloran's leadership development philosophy.

Halloran saw several benefits. Employees' time-management skills improved, along with the quality and reliability of their work. Meanwhile, employee satisfaction in the IT organization continued to climb while the mentoring program was in place. "I have to believe that it's high because the level of engagement is high," says Halloran, who left Medco in November.

IT chiefs also need to work closely with HR to provide more career development to IT staff. "Half the people leave their jobs because they're not receiving career counseling," says Langer. "There's a lack of interest in having that discussion--and that's the first problem."

To help address those issues and improve employee retention rates, Langer suggests that CIOs and HR professionals work with IT employees and their supervisors to develop a plan that sets "realistic options for where their careers are going."

Building Business Acument

Engendering Business Acumen

Economic pressures have also created a need for greater transparency and governance in IT. As a result, CIOs have to become much more eloquent at discussing results in business terms.

CIOs have taken a number of approaches to help develop these types of abilities in rising IT leaders. For Halloran, it starts with ensuring that every IT staffer understands the organization's business charter and the drivers that create each division's profitability.

IT managers and directors at Medco are also responsible for developing knowledge for their function (i.e., distribution, finance) and an awareness of how their roles contribute to the success of that function. At Chiquita, "IT leaders really need to run the organization as if it were a full P&L business," Singh says. "I know it's a cliché, but you need to have a strong understanding of how your initiatives are delivering meaningful bottom-line and top-line impact and the ability to articulate that." This includes the need for rising IT leaders to understand the drivers underlying the IT budget and the factors that shape project ROI, he adds.

That kind of insight comes in handy when IT managers at Chiquita meet with business leaders on a quarterly basis to discuss the top business projects that were delivered during a particular period and the financial metrics used to validate those efforts. To help nurture those types of skills in Chiquita Brands' IT organization, Singh relies on a mix of mentoring and shadowing between senior managers and less-experienced practitioners.

The Job-Hopper Conundrum

One of the biggest risks that CIOs face is investing a great deal of time and capital in developing individuals only to see them jump ship to another organization. For his part, Mark Schlesinger, CIO of Broadridge Financial Solutions, says he doesn't sweat it too much.

"People move on for their own personal reasons," says Schlesinger. "I don't worry about those uncontrollables. We focus on making this the best place to work."

Read more about how Schlesinger trains future IT leaders. 

Meanwhile, Schlesinger says he's "thrilled" when a member of Broadridge's IT team transfers either into a client-facing or business role. "Once they've developed a solid IT foundation, that helps make them a better business owner."

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