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Why CIO searches go wrong Print E-mail
Tuesday, 30 March 2010

(CIOZone) By Lisa Yoon

Here are some surprising (and not in a good way) things I learned from the current issue of the Cutter IT Journal, in the article "The Right Way to Recruit CIOs" by Robert Gariano, an executive-search veteran and founder of search firm Robert Gariano Associates:

  • In a typical year, 75 new CIOs are recruited at Fortune 500 companies through retained search.
  • External CIO candidates have been favored over internal contenders by about 3-to-1.
  • Approximately 31 percent of retained executive searches are cancelled.
  • Retained search costs about one-third of the entire compensation package -- not just salary -- of the candidate who gets hired.
  • That's an eye-popping amount of money for what you get. As much as a quarter of newly recruited CIOs don't work out and have to be replaced before they've been on the job a year. In addition to the money wasted on the search, the employer now has to pay for another one. Add the costs of leadership transition time and project delays and the bottom line is more expensive than an unsuccessful search where no one gets the job (but the employer still has to pay the search firm).

If you are surprised by any of these observations, then you should probably sit down for the explanation. According to studies by Gariano's own firm. 74 percent of search firms were working with incomplete or misunderstood specifications provided by the client company for the search assignment. In other words, recruiters didn't really know what they were supposed to be looking for in a candidate.

Moreover, when evaluating CIO candidates, an overwhelming majority of recruiters emphasized the key attributes in the wrong order, paying the least attention to the most important quality. Of course, each company has its own specific needs and requirements in a CIO candidate. That said, most of us know a good CIO has three attributes: technical knowledge, business smarts, and finely honed leadership skills. Gariano's research found that when interviewing CIO candidates, recruiters spent 70 percent of the time evaluating technical knowledge, 20 percent on business acumen, and the remaining paltry 10 percent on leadership ability. In interviews with incumbent CIOs and their bosses, failure to lead people was the top reason CIO hires didn't work out. The next most common reason was their inability to align IT with the company's goals.

Now for the good news: these things can be remedied. It is possible to hire the right IT chief the first time. First, of course, a client company must make their expectations of the successful candidate explicit and detailed. (If the search assignment isn't specific enough and the recruiter isn't asking for more details, an employer might pause to wonder if this recruiter is a good one.)

Finally, use interview time judiciously by focusing on leadership and business savvy. Gariano provides several questions that are useful in determining the candidate's merits in both areas.

Leadership. To determine the scale of the candidate's previous leadership experiences, some questions to ask might include: Who reported to you in previous jobs? How broad was their scope in the context of the whole organization? How many of your direct reports did you personally hire? How many staff members did you promote and to what roles? Also ask about how they worked with their peers and bosses. How well did you work with your peer group. Who among your peers were the best to work with and who were the most difficult, and why? Who were some of your best bosses and why?

Business acumen. When asked about the scale and achievements of past projects, the candidate should be able to answer in context of these projects' value to the entire enterprise. For example: What are some large projects you manage? What were the expectations of costs and return on investment? Did you achieve these projections? How was IT staffed, and how did they mesh with the organizational structure and culture of the whole company? How did IT bring value to the organization in terms of competitive advantage?

As you can see, this is not brain surgery. Be specific and ask the right kinds of questions and you can avoid becoming part of a sad statistic.

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