The CIO Domain Conundrum: What Makes A Good Fit?

goodfit.jpgIf you ran a convenience store, and needed to call someone in to unclog the drains in the bathrooms, would you call a good plumber, with a variety of experiences under his belt, or would you leave the drains clogged up until you could find a plumber that has deep vertical experience (no pun intended) working within the convenience store industry? Of course not! Sadly, this is the lame cloud under which many CIOs are hired. Call me crazy, but I’d just want a good plumber. Someone who was a problem solver.

A plumber provides a service, much like a CIO. The plumber is there to support you in your operations, not tell you how to run the convenience store. A CIO is also a service provider, albeit an internal one.

One of the things that I have noticed is that CIO job descriptions are often crafted under the same guidelines as other executive positions (sales, operations, finance, and marketing). First, they want the skills – okay, this is obvious. You have to know technology. In addition to that, however, they often want domain expertise – generally, deep domain expertise.

For a CFO, this makes sense, as each business and industry has different financial treatments.

For a COO, this also makes sense, as each business/industry can have a varied, complex, unique operational model.

For a CMO, again, this makes complete sense, as each industry tends to have its own marketing demographics and quirks.

For a CSO (sales), this also makes perfectly good sense, as you want to tap into their industry relationships to capture sales.

However, technology can be a slightly different animal. It is most often an enabler, and not a vertical leg. This isn’t always the case – so before you send in a comment to this post telling that there are exceptions to this – I agree!

There are basically two types of CIOs. The first works in an organization where technology is the core of the business – the core competency that is centric to everything they do. Examples of this type of environment are generally software, hardware, e-business, and other such technology companies. Technology can run very vertically within these types of firms.

The second works in an organization where technology isn’t at center stage, but rather is an enabler for the rest of the organization. Examples of this include manufacturing, retail, and transportation companies. In these environments, technology is a horizontal support structure – critical to the business, yes – but not a vertical leg within the firm. Most firms with CIOs fall into this category.

Call me crazy, but you wouldn’t need to know anything about the doughnut industry or desert “manufacturing” in order to provide technology services throughout Krispy Kreme. Don’t get me wrong, I think if you actually found that CIO candidate who had “doughnut industry” experience, you should court them, if nothing else than for the intangibles. However, there are a lot of extremely qualified CIO candidates that get passed up due to lack of domain experience.

From the CIO’s perspective, things such as call centers, servers, data centers, VOIP, technology budgets, hiring profiles for technologists, interconnectivity, ROI/IRR/EVA, and the Rationale Unified Process don’t change merely because you change business cards. These are staples found within the toolbox of any decent CIO.

A while back, I was fortunate enough to land in the mix for a CIO opportunity for a large mortgage firm. I was ultimately ruled out due to my lack of experience within the “mortgage industry.” Now, the last time I checked, CIOs don’t approve mortgage applications. Pay no mind that I have worked within the financial services sector for much of my career (consulting to Goldman Sachs, Chase Manhattan, Zurich-Kemper, Citibank, and several other firms). Heck, I even started my career as a computer programmer years ago working for one of the world’s largest credit card processors.

I should also add that I wasn’t bitter about losing out on this opportunity. This is business, and I’m a big boy – c’est la vie. I am simply using my own experience to illustrate the point.

Sadly, this has not been my only experience in seeing this line of thinking. A fellow technology colleague was recently ruled out for a position as a CIO with a large furniture manufacturer, because he did not have any experience working within the “furniture manufacturing” space. “You’re a fantastic candidate, but we need a furniture guy.” Uh huh – if you say so, Sparky.

Dan Gringas, a partner with Tatum Partners, summed this up nicely in a recent article entitled “How to Hire the Best CIO” over at CIO Update.

Business Knowledge vs. Domain Knowledge

No, you don’t need someone who comes from the cement-mixer industry. Guess what, manufacturing is pretty much the same whether you make cement mixers or cake mixers.

This drives me crazy and it’s endemic in CIO hiring. I once lost the competition for CIO in a company I had a real passion for because they wanted a “shoe guy.” I had deep knowledge of distribution, manufacturing and their core architecture, but I came from a different manufacturing background.

Most businesses should try to find someone from another industry well known for their strategic use of IT rather than trying to find someone from their specific industry. Hospitals are notorious for this, feeling that they are so different that they have to get someone from another hospital.


As I mentioned earlier, technology is an enabler. Within the office of the CIO, specifically, you are expecting to see some thought leadership around leveraging technology innovations in order to achieve efficiencies across the enterprise. You are also expecting the CIO and his team to support the operations of the firm by managing the flow of information throughout the organization. The CIO’s functional role is of a supporting nature.

cio_supporting.gif

The ideal CIO is quite often not an industry zealot, but rather, someone who brings a consultative approach to solving business problems through the smart deployment of technology. Frankly, I would prefer someone who has worked in a variety of industries (e.g. a consulting background), and is used to looking at problems from a multitude of angles. There are actually very few scenarios in which deep domain expertise is going to make or break a good CIO.

Umesh Vasistha is the CIO of Jindal Stainless, the largest manufacturer of stainless steel in India (USD $4B in revenues). In an interview by The Financial Express, he shared a great response to one particular question:

Q: Are CIOs participating in the company’s strategic decisions?

Industry experience is a critical factor in operating the company. A CEO often comes from the operations/sales side in the same industry, while a CFO usually has finance/accounting experience in similar industry. Conversely, CIOs often come from technology careers from cross-functional industry experiences. A CIO wears many caps and is expected to take care of business methodically and use proven formulae of success to generate positive results for the company.


One of my friends who is an executive recruiter informed me that she has the same problem with sales opportunities that she is placing. The client wants someone who has sold software. Doesn’t matter that you have a GREAT sales person with a GREAT track record. They want a industry specific salesperson. And the funny part is, most sales people in technology don’t know or understand technology. She has had this argument with several companies:

Client: “We are in trouble, and we want you to fill our CxO position. The last guy fit in great but the firm is still in trouble. So find us someone just like us and he will fit in well”.

Recruiter/Business Consultant: “Wouldn’t you prefer someone someone very qualified, yet possibly different? His diverse experience could bring new ideas and solutions to the table?”

Client: “No!”

The good news is, I’m not alone in my thinking.

If you are hiring a CIO, do yourself a favor and read these articles before you publish your job description and start seriously interviewing candidates. And stay tuned to The Pothole, as I have an upcoming article which will discuss the “hidden” qualities of a great CIO! Keep an open mind as you screen your CIO candidates, and remember that the CIO is there to provide a service to the organization, not run your business.

What say you? How important is industry experience? Which industries are more stringent than others, and would it be better to have someone who is more well rounded that brings new ideas to the table?

Cheers.

– Scott Burkett

2 Comments

  1. Update: I added a link above to Don Curt’s article

  2. Victor Wolters · September 26, 2007 at 10:16 am

    Scott,

    You have captured the “conundrum” perfectly. I have been through several situations like the one you described. There are some many executive teams, share holders, and customers missing out on the benefit of strong technology leadership that comes from cross-industry experience. Please keep expanding the story.

    Victor

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