Surviving as the First CIO

By Daniel Gingras

February 28, 2005: It’s usually considered a good thing to be first but, beware, there are some pitfalls if you are the first CIO a company has ever had, writes CIO Update guest columnist Daniel Gingras of Tatum Partners in part I of this two-part series.

Congratulations! You got the offer and you’re going to be the new CIO. It’s the first time the company has hired a CIO, and your new employers are really excited but a word of caution: getting the job of “Inaugural CIO” is a lot easier than keeping it

The role of CIO is both difficult and tumultuous, especially as pressures mount for better technology/business alignment in an era of reduced budgets and a microscopic evaluation of ROI for every dollar spent on technology.

This pressure is increased exponentially when the role is that of the organization’s first CIO. A role that challenges even the most experienced technology leader.

Why a CIO?

There are really only a couple of reasons for an organization to decide that it’s time to hire a CIO: either the growth of the organization has outstripped the ability to manage its technology portfolio or it is in the middle of a technology disaster.
Sure, there may be other reasons, but they usually fall into one of the previous two categories.
When a company has outstripped its ability to manage its technology portfolio, there’s an opportunity to completely realign the business technology process to produce a truly competitive advantage for the organization.
The management of this type of organization is generally more receptive to significant structural changes, which usually, but not always, are necessary in the business/technology realignment. You must carefully “take the temperature” of the culture to ensure that it is receptive.
This can be complicated by the fact that, in general, by the time the decision to hire the first CIO is made there has been some period during which the incumbent technology management has failed to meet expectations.
This is, in fact, what usually leads to seeking an outside leader for the organization, and can breed some resentment on the part of the incumbent managers who have been “passed over” for the role of CIO.
Take your cues from the hiring process: how did the interviewers refer to the current IT management?
Were they dismissive, contemptuous, or did they fully discuss the reasons for going outside the current staff? The latter is a good indicator of how the company values technical talent (at least, the current technical talent).

Understanding the Challenge

There are a number of factors you should consider when thinking about becoming an organization’s first CIO. The conclusions you draw can help you survive the unique challenges of the position.
In this article, we’ll focus on two factors: history, and personnel. Additional factors will be addressed in the second of two articles.

History

The first thing to ask is why is the company hiring a CIO at this juncture in the organization’s history? There are some unique milestones in the life of every company, and at some point, it’s simply the right time for a CIO.

Usually that’s marked sometime around the fourth or fifth year of a fast-growing company that has general needs in the technology space.

It may come sooner for higher-technology companies, and later for less technology-dependent businesses, but milestones can include reaching a certain organizational size, revenue, or chronological age. Any one of these can be a logical juncture for hiring a CIO.

The question to ask yourself is: is this a logical progression for the company? I’ve been asked to be the first CIO of several companies, and my experience is that at about $200 million in sales, most companies feel the need to have an officer-level position managing the technology portfolio.

The size of the organizational headcount also has a very large bearing on this juncture. Larger headcount will drive the need for a CIO earlier than will a large sales volume with few employees.

Tougher than the natural progression milestone is the “disaster.”

Generally, this is a major failure in implementing a system, which has caused significant pain within the organization. The management realizes, as it focuses on the failure, that the current technology leadership doesn’t have sufficient “horsepower” to get the job done.

This should be a warning to you: if the organization wasn’t focused on technology before the failure, it may not view technology as strategic to its core mission. It sees risk rather than competitive advantage.

Look carefully at the business-technology alignment. Sometimes a disaster of this kind is just the shock necessary to cause an organization to realize not only the risks but also the rewards of technology.

Measure this carefully, however. It’s time to reflect a bit: whom did you interview with? Were they the core management team or less important employees? Whom are you going to report to? If you are reporting to the highest level of management, then the organization may have learned its lesson.

If you’re reporting one or two levels below this, the company may not have a full understanding of the value of technology in the modern business environment.

Personnel

Here’s another potential landmine waiting to explode when you touch it.

Someone was passed over to put you in the role. How does he or she feel about it? How does the current staff feel about having their old boss passed over?

In general, the first thing you should start doing when you join the organization is to weed the garden. Do it right away. Don’t wait. Every time I’ve hesitated in changing talent early, it has come back to haunt me.

In one company I decided that rather than bring in my own proven team of managers, I’d give the current staff a chance to “prove themselves.”

It was a disaster that eventually cost me my job.

I’ve learned the hard way that if the technology organization is not well regarded; has had a history of failures; and is not well respected by management, the best thing to do is simply start triage.

If you have proven managers you can bring with you or whom you know would join the organization, then call them the first day you start. Seriously, don’t wait. It’s going to take some time to get them aboard, and you already know their capabilities.

If the management resists your changing the staff, take it as an ominous sign. In the four times I’ve been the first CIO, every time I failed to heed this advice it’s been fraught with disaster. I’ve learned my lesson the hard way.

A turnaround CEO I got to know said it quite succinctly: “If the company’s in trouble, it’s almost always the fault of the previous management. Start replacing them right away.”

Daniel Gingras has been CIO of five major companies and is a partner at Tatum Partners, a national professional services organization of senior-level technology and financial executives who take on leadership roles for client companies — generally organizations undertaking significant change.

Daniel has more than 30 years of experience in technology strategy and implementation. He also teaches computer science at Boston University and can be reached at dan.gingras@tatumpartners.com