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Tech Arguments 2012

CIO succession: Promote from within vs. hire an outsider

If you hire a CIO from outside the company, be prepared for fallout

By , Network World
December 03, 2012 07:09 AM ET

Network World - Choosing a CIO is an important and potentially divisive decision. Many companies prefer to promote an internal IT candidate, but it's not always possible. Tapping an outsider can bring fresh perspective and experience to the CIO's office, but it also can have a negative effect on companies' efforts to develop IT management talent internally.

"You couldn't find a more polarizing topic," says Jack Cullen, president of IT staffing specialist Modis, of the insider/outsider hiring debate.

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In Cullen's experience, companies lean toward trying to hire from within. "In many cases, there's already a laid-out career path for people and a CIO's successor is being groomed," he says. "Often a CIO has a succession plan not only for himself but also for his leadership team."

 
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Succession planning is critical, particularly since the average tenure of a CIO isn't terribly long. Management consulting firm Janco Associates reports that the median job tenure for a CIO is four years and two months.

Survey data from the Society for Information Management (SIM) finds greater longevity, but only recently. In 2012, CIOs said they've had their jobs for six years on average, up from 4.5 years in 2011 and 5.1 years in 2010. Over the last seven years, the average tenure of a CIO was 4.6 years, according to SIM.

Yet despite fairly predictable turnover, many CIO succession plans are inadequate. A majority of IT leaders haven't considered what will happen and who will fill their shoes if they're suddenly unable to work, according to Robert Half Technology.

More than three-quarters (79%) of CIOs polled by the technology staffing firm said they haven't identified a successor in the event they had to stop working unexpectedly. Just 20% of the 1,400 CIOs have a successor in place, and the remaining 1% are unsure.

That may be changing, however.

"As we've come out of the recession and as companies have started reinvesting in their HR departments, succession planning has become an important topic," Cullen says. "Loss of key talent costs companies lots of money. We're seeing much more attention at all levels being paid to succession planning."

The domino effect

Fairly predictable CIO turnover and a stronger focus on succession planning have inspired many companies to build a strong IT leadership bench.

"We know that CIOs move on, and that role becomes created again. In many cases, companies lay out a career path that they use to retain quality people," Cullen says.

There's a lot of upside to that approach and the loyalty it fosters. "Companies that can say they promote from within are typically companies that career-minded individuals want to work at," Cullen says. "If you make that hire from within, it helps you retain other key people."

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