Succession Planning for Chief Information Officers
By Michael LaMotta, Partner in Charge, Tax Services
The ever-increasing responsibilities of the Chief Information Officer’s (CIO) role means little time is left for succession planning. Identifying, mentoring and developing a successor is a long-term project which requires resources and planning and is easily put off due to everyday pressures and workload. However, there is a big risk by not doing it. The role of technology as a business enabler continues to grow. Information Technology (IT) has become critical to every function in a business. Corporate productivity is increasingly driven by the ability to make data available to decision makers, employees and clients. Its effectiveness has become a competitive weapon in today’s business environment.
Succession planning is the key to managing business-wide continuity and reliability. It ensures the business will not be left in a vulnerable position and that the Information Technology (IT) department will continue to offer the support the business needs. Not having a succession plan in place can mean a temporary and reactionary solution should the CIO leave a company and can result in putting the business at risk of disruption, lack of direction and loss of institutional knowledge.
A good succession plan can adapt to the organization’s changing needs and should work in tandem with Human Resources (but should remain the responsibility of the CIO).
The first step is to perform a needs analysis by evaluating the current and future needs of the company and by identifying the talent and skills required for the position. Be sure to evaluate the level of leadership the company needs from the IT department as well.
The next step is to identify talent and groom from within the firm. In today’s environment the role of the CIO has evolved from a more technology-focused caretaker to an essential business strategist. Consequently, the CIO needs to thoroughly understand the company’s product/services and internal structure, and must play a variety of important roles both within the company and while working with clients. Having excellent technical skills is not enough. In addition to the high-level of technical knowledge, CIO’s must have business acumen, leadership and relationship management skills to be successful. They must be good communicators and be astute to the politics of the company. By defining competencies you can evaluate and classify employees. Identify employees with potential to assume greater responsibilities. Once you have identified your management needs, determine who can fill them now and in the future. A great place to start is with employee performance evaluations. Make sure they include an examination of individual goals for growth and link employee and leadership development to the current and future needs of the business.
Now it is time to begin developing the talent. Work with Human Resources to develop a strategic plan. Evaluate the skills, performance and growth of employees you have targeted as part of the succession plan. Start mentoring and coaching and developing formalized feedback. Provide critical developmental experiences to those who can move into key roles. Hands-on experience is essential so put those emerging leaders to the test. Give them the lead on a new project, let them sit in on management meetings, designate them as alternates when you are out. It is important to give them experience in decision-making so delegate important decisions and the responsibility for those decisions (i.e. the responsibility to sell the idea/project, to defend, to fix if things go wrong, etc.). This experience will not only be invaluable to the employee, the exposure will give others within the organization a chance to see the employee in a leadership role. This not only gives the employee the opportunity to be prepared before the job opens us, it also allows the organization to accept the employee as a trusted partner from day one, ensuring a smooth transition into the leadership role.
It is important to remember to evaluate the success of your succession management efforts. Are you successful in developing the leadership qualities of those you mentor? The CIO should work with the Human Resources Department to annually evaluate the performance reviews as well as the overall progress of the succession plan program. Fill in any identified gaps by providing potential managers appropriate training, education and mentoring.
Knowing what leadership teams you need in place for the future will drive your succession planning strategy.
This article appeared in the May/June issue of New Jersey CPA magazine.