How to Hire a CIO

CU360
April 21, 2010 | COMMENTS

Hiring a chief information officer may be among the most important decisions a company makes, and it's a decision that concerns the CFO. Unlike the head of sales or a business-line leader, the CIO will touch every part of the business, end to end. How that executive performs over the long term will likely have a tangible influence on financial results.

But there are different kinds of CIOs, and which would suit a company best depends on the type of company and its life-cycle position. That's something CFOs don't always grasp, says Martha Heller, president of Heller Search Associates, a specialist in CIO recruiting.

Most CIOs, Heller tells CFO.com, can be grouped into one of three buckets:

• Operationally oriented candidates are strong in service delivery, project management, and cost control, but likely won't be good for spearheading a technology-driven company transformation.
• Business-oriented CIOs are relationship builders, strong on information-technology governance, probably experienced in an industry, but short on technical know-how. They're a good choice only if there's a strong IT operations team in place or an ability to build one.
• Innovators create customer-facing products that generate revenue. They're best for companies in sectors such as financial services that plan to invest heavily in IT and whose products are data oriented.

What a company really needs may be a blend of skills from more than one of those groups. But it is pointless to seek a CIO who can do all three flawlessly. "There's no one like that," says Heller.

Instead, a company should focus on the two or three things it most needs IT's help with. Stick to business goals such as "increase our market share" or "learn more about our customer base." That allows you to identify the best-qualified candidates, says Heller, and the CIO will be properly directed from the start.

To hone the requirements and develop interview questions, Heller recommends first meeting with business-line and functional leaders to learn their pain points around IT, which likely will be different from those that directly affect finance leaders. Then, before interviews begin, make sure everyone on the hiring committee knows what the goals are for the new CIO, so that candidates don't get mixed messages.

The interview questions should probe how candidates would address common business problems related to IT, says Heller, such as:

Problem: The IT organization has a culture of entitlement and acting as order takers.
Question: "How have you changed the culture of your current IT organization?"
Listen for: Terms such as client focus, business focus, and accountability.

Problem: Most users are dissatisfied with some aspects of their IT services.
Question: "On a scale of 1 to 10, how would your current business users rate your IT organization? How do you know that?"
Listen for: An answer that cites a rigorous, methodical user-satisfaction survey process.

Problem: The CIO gets overwhelmed with delivery responsibilities at the expense of building relationships.
Question: "What are your most important relationships in your current role, and how do you maintain them?"
Listen for: Something other than "my vendors."

Problem: The CIO champions the latest available technologies without thinking through the return on investment.
Question: "What's the most exciting technology advancement you have made?"
Listen for: A business-focused answer, such as "increased market share in a key demographic by 10% by consolidating data centers and doing business-intelligence testing."

Problem: Technology leaders use arcane terminology and acronyms.
Question: "Tell us about your views on services-oriented architecture."
Listen for: Whether the candidate can discuss such a complicated subject entirely in straightforward business language.

Problem: Outsourcing IT services, if managed poorly, can wreak havoc on a company's balance sheet.
Question: "What are your thoughts about outsourcing?" The key is asking this as an open-ended question.
Listen for: Answers that are too positive or negative—they're red flags. The right answer is that there are pros and cons, and it depends on what you want to achieve and how outsourcing relationships are managed.

"Many CFOs look to hire a technologist to be the CIO," sums up Heller. "But that's not what they need. You want them to say as little as possible about technology, and you want to feel as if you're talking to a businessperson."

This article was orginally published online by CU360, an online portal for benchmarking tools, market insights, industry data, and analytical information at cu360.cuna.org. Reprinted with permission.