The key reasons why CIOs get fired (and what to do about them) – Part 1

You’re now CIO – welcome to the hot seat!

The CIO is probably the hottest seat on the “C” suite in terms of pressure and demands and that gets reflected in terms of a short tenure in the job. As individuals, they are typically bright, intelligent, hard-working and committed – and yet when you visit the offices of their colleagues frequently they are demanding that their CIO needs to go and go soon.

How long does a CIO last?

In the bad old days around the turn of the millenium – in the times of the dot-com crazy years of explosion growth and sudden collapse the accepted wisdom (or should I say urban myth) a typical CIO could expect to last 18-24 months in the job. These days, they get a while longer at the helm some say around 3-4 years (Forrester poll) and others 4-5 years (Gartner poll).

You’ve got to keep the lights on!

The most obvious requirement for any CIO is to keep the core IT systems and basic infrastructure working. If they stop and the organisation ceases to function properly, then they are not going to stay around long. I guess in over 25 years of business experience, I’ve only seen these catastrophic failures happen 2 or 3 times and the CIO incumbent pay the price of failure. Business users and customers expect IT to work and by and large it does. I suspect expectations of reliability increase year-on-year and most CIOs are on top of this fundemental part of their game. Perhaps the big downside, is that the substantial time & efforts typical CIOs and their staffs spend “keeping the lights on” puts them under pressure in othe key strategic areas that can ultimately cost them their jobs.

So why do senior executive colleagues want to fire their CIOs so much?

I often reflect on a number of the CIOs I know well personally. I often struggle with the paradox that despite they are great people, dedicated to their jobs and achieve great things for their organisation with the frequent situation that many of their colleagues want to see them fired? How can such an uncomfortable situation arise?

Perhaps at the heart of it is the relentless increase in the demand for IT to help a modern large-scale organisation function successfully with the constraints of time, resources and most of all money to fulfill these expectations. We all know that the units costs of technology is falling year-on-year, the problem is that the demand is increasing even faster. This means that left unchecked, the costs for IT would explode year-on-year – and if this happens every CIO knows that they will be out-the-door before the kickoff budget planning round has even finished.

So every decent CIO attempts to control this ballooning budget overspend monster and it’s here that is perhaps the root cause of the difficulties they experience. In the case of large organisations (particularly financial institutions) one endures a long drawn out and intensive budget setting process. At the end of which the overall budget for IT is determined and then the costs allocated (with different degrees of science depending on the organisation) to the individual business units and functions. The spending is based on a whole series of assumptions – which in practice turn out to be over optimistic. Business demand nearly always exceeds the assumptions in the budget (whether for infrastructure, desktop & communications or applications & projects – or all of them together) – the CIO is then sucked into a policing issue trying to enforce standardise solutions (to keep unit costs down), seek out and destroy skunkwork initiatives or suppress & defer and demand.

You can’t keep the spending tide back

Despite your best efforts in putting in place control systems to control spending, many CIOs ultimately fail to keep the overall IT costs under control. You might be able to keep those costs you have direct control over, but user departments find a way to fund the spending you try to suppress regardless. Eventually the CIO and Finance catch you out when they get around to aggregating all of the IT related spend going on in the organisation, that can be 50% to 100% higher than you think it is. You may have not been responsible, but you are judged to be accountable for this overspend 🙁

Business users hate the words NO & WAIT! All to frequently, the CIO and their teams are involved in saying no or never to business demands for more IT (from Blackberries to new CRM systems). Much of the demand can be simply status driven (I must have a Blackberry too as all the other senior managers have one). The CIO may try and put in prioritisation and approved processes in place – but to the business user these can seem to be bureaucratic roadblocks deliberately put in place to stop them getting what they want.

Nobody loves you anymore 🙁

If you are not careful, as CIO you end up with a personal reputation as obstructive (insisting on standards), a conehead (asking colleagues to invest in major infrastructure investments they don’t understand), ineffective (as new projects never get delivered fast enough) and pretty isolated. Setting aside the business & technology challenges, long tenured CIOs make a big effort to build their personal relationships with key colleagues outside of Technology.

The service sucks!

Sometimes the service just sucks. The root cause can be over aggressive negotiation and bidding of an outsourcing contract that forces the other party into dysfunctional behaviour in order to try and recoup their losses on the contract they signed with you. Sometimes it’s down to an offshoring exercise (internal or external party) that doesn’t work out to well. The cost savings turn out to be less than expected – but worst of all the delivered service is appalling. If poor service screws up the revenue numbers and increases customer churn for a key division of the company – then you are toast.

The silver bullet doesn’t work Many organisations end up signing up for a huge “Transformation Programme” and these of course can take years (3-5 years to see through). You may of course have signed up a very convincing multi-billion partner organisation to help you through this journey. At the outset, you can enjoy a lot of support from your CEO and the whole IT organisation (and much of the business community too) can become heavily involved. The seasons come & go and slowly but surely the doubts begin to grow whether the Transformation programme will ever be completed – or that the benefits so confidently predicted will ever be realised. I guess you should start to worry if you get to see the leaves falling from the trees a couple of times and the Transformation programme is still running. The CFO and their team start to show ever closer interest in your budget spend and forecast – your outside partner tells you to have courage and keep going. The business senior executives start to jump ship and stop attending the key governance meetings, you know when your sponsor tells you that they feel someone else is better suited to take the helm that your time is up!

So what do long tenured CIOs do differently to be successful?

OK – if you want to learn the secrets of successful, respected CIOs and how they got to become one of the most respected members of their management teams. Then you can:

– Ask one of them – they can be found 😉

– Read Part 2 of this article series

Good luck and remember, being a great CIO is the best job in the world.

Copyright (c) 2007 Close Quarter Limited