Hiring and retaining talent is a big part of a CIO's job. Equally important is grooming successors, or IT leaders with the tech chops and management skills to keep the business humming in the event the CIO departs.
As a matter of sound practice, CIOs groom one or two high potentials who can replace them. But even the most well run IT organizations fail to cultivate digital leaders two or even three levels down in the organization, says Gartner analyst Diane Berry.
Fifty-two percent of 2,500-plus HR professionals surveyed by Development Dimensions International, The Conference Board and EY said they weren't sure of the current status of their leadership talent capability across the organization. This poses a problem at a time when tech talent turnover is rampant.
"Where we do see issues with succession planning is in the nature of the reactive versus being strategic," Berry says. "They reserve it to the leadership layer and aren't building the pipeline for more critical roles."
Honing an outside-in perspective
Roadside assistance provider Agero is one enterprise where succession planning runs two levels deep. Chief Digital Officer Bernie Gracy works closely with direct reports, who in turn mentor their direct reports. IT managers are designated as ready now, ready in 12 to 24 months and those who will have leadership potential 2 years and beyond.
Gracy expects high potentials and their lieutenants to master leadership in a world where digital tools, including cloud, mobile, artificial intelligence and machine learning, drive the business. Gracy also enables high potentials to "drive the business strategy" by working with senior leaders across the business, gaining a more holistic enterprise view. "They had to have swam in the deep end," learning how to work with both their IT and business peers to solve problems, Gracy says.
Another crucial step in training successors is encouraging them to work with counterparts at Agero's customer organizations. An Agero VP will meet with an IT VP at, for example, Liberty Mutual. The idea is that the Agero VP gets to know the customer, and gains insight into how an insurer operates. "I want them to know who they are," and learn how to advocate from the clients' perspective, Gracy says.
This meeting of the minds, essentially an outside-in rather than an inside-out perspective so common in IT shops, allows Agero and its customers to cultivate crucial relationships and share best practices. In this "stakeholder-centered" vein, Agero becomes better prepared to serve its customers, while customers learn how to work with their supplier.
Gracy also recommends high potentials speak in his stead at industry events hosted by Amazon Web Services and other tech companies or organizations. This affords the VP "ample opportunity to tell their story and the company's story," ideally honing their speaking skills, Gracy says. "Ultimately, CIOs and CTOs have to be storytellers, and translate the tech to the business," he says.
Finally, Gracy encourages his staff to learn and refine their "emotional intelligence" capacity, including the ability to read the audience and respond in kind. This helps high potentials move beyond the introverted IT view to broader, business- and customer-centric outlooks. Gracy calls emotional intelligence a "critical X factor" for IT leaders.
Testing IT leadership mettle
As the CIO of apparel retailer Carhartt, John Hill is grooming direct reports to fill his shoes, or eventually take a similar a role at another organization. He sees it as his duty to prepare high potentials, even at the risk of them jumping ship for a CIO role somewhere else. "My job is to help anyone who wants to be a CIO," Hill says.
Hill brings high potentials along by ensuring they get face time with other senior business executives without him. This is critical in helping the potential CIOs learn how Carhartt's business works. Hill also encourages high potentials to reach out and work directly with the CFO and COO on cross-functional projects that are not necessarily tech-based. This lets them see how other C-level executives do their jobs, he says. "They don't need to go through me to have those conversations," Hill says. "In my experience, that's the best way to help test" their IT leadership mettle.
Hill also sits down with his direct reports twice a year to discuss how they build a strategy and vision for their departments. These high potentials also receive 360-degree reviews in which peers, subordinates and other senior executives provide feedback, which helps them understand how their leadership is viewed.
"Are they a great teammate?" Hill says of the prevailing question such reviews are intended to answer. "A lot of people spend a lot of time on themselves, but I want to know: Is this person seen as a great person by the people around them?"
Hill's high potentials possess high integrity, sound ethics and passion for their work, as well as the ability to "multithread," including anything from facilitating the career development of subordinates to achieving promised outcomes. At a high level, CIOs must demonstrate strategic vision in addition to possessing the business and financial acumen that are the keys to the seat at the executive table.
Many of those traits can be coached as long as the high potential brings a life-long learning mentality to the role. Hill says the difference between a good versus great IT leader is the ability to track the ongoing status of dozens of initiatives and understand their impact at all times. "That's where you see if somebody has that talent — it's a key differentiator," Hill says.
Kroger restocks its top tech talent
The nation's largest grocery chain may have provided the playbook for how to succession plan in the digital era.
Kroger in January announced that Chief Digital Officer Yael Cosset would take the IT leadership reins from CIO Chris Hjelm, effective May 1. He will also retain responsibility for Kroger Digital, a key driver of the company's Restock Kroger growth strategy.
In elevating the CDO to the CIO role, Kroger is underscoring the strategic importance of blending digital and technology initiatives.
"Yael and Chris have worked collaboratively to support Kroger's technology evolution," said Kroger CEO Rodney McMullen in a press release. "Chris and Yael have a deliberate transition plan to ensure continuity while successfully delivering on our Restock Kroger technology initiatives to redefine the grocery customer experience."
Cosset inherits from Hjelm innovations such as the Scan, Bag, Go mobile checkout system; QueVision, a sensor-based solution that speeds up checkout wait times; and the digital EDGE Shelf technology. No stranger to innovation, Cosset became Kroger's CDO in 2017 after serving as chief commercial officer and CIO of 84.51°, Kroger's data analytics software subsidiary.
"Yael has the qualifications, skills and strategic mindset to ensure technology and digital are key accelerators of Kroger's future success," McMullen said.
To wit, there is no yellow-brick road for succession planning. CIOs take many paths to prepare for their absence, from pairing high potentials with business executives, to working with the human resources to craft a future leadership matrix.
Succession planning tips
For CIOs grappling with how to tackle succession planning in the digital era, Gartner's Berry offers the following advice.
Immediately loop in HR. CIOs should huddle with their HR heads on ways to bolster talent, including leadership coaching and other ways of boosting role readiness.
Consider the following questions: What leadership, business and technical skills are required in our talent portfolios to fulfill strategic objectives? How do they map to critical roles we need now and in the future for growing and sustaining our digital business?
Build your bench. Define leadership skills and digital competencies required to align with and support strategic goals and objectives. Use the "nine-box grid" approach to assess performance and potential for high potentials.
Assess talent. Develop methods to evaluate potential and assess readiness. Ask: Where do we have critical skills and competency gaps in the current leadership team? "Cast a wide net, go deep into the organization and beyond IT to identify and assess high-potential talent," Berry says. Bring high potentials along through targeted learning and experiential development activities.
Continuous assessment. Revisit metrics for assessing talent every 12 to 18 months to identify opportunities and determine where they might need to shift to align with business needs. Finally: Hold leaders accountable for achieving them.