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by Clint Boulton

ÍæÅ¼½ã½ã succession planning critical as IT drives business growth

Feature
Aug 26, 2015
ÍæÅ¼½ã½ãCareersIT Strategy

ÍæÅ¼½ã½ãs say proper succession planning is a crucial part of their responsibilities. But it's not an easy job at a time when talented IT staff can rake in big salaries working on innovative projects, without putting themselves under the C-suite microscope.

picking a successor

As technology becomes increasingly woven throughout the fabric of business, it’s incumbent on ÍæÅ¼½ã½ãs to build a deep bench of IT leaders that includes one or more candidates who can step into should they move to a different position or retire.

Ideally, these ÍæÅ¼½ã½ãs-in-training will make the organization stronger, helping companies meet their fiduciary responsibilities to shareholders. But ÍæÅ¼½ã½ãs say identifying candidates can be challenging at a time when talented professionals can make good money using technology to drive innovation without the hassle of the board looking over their shoulders.

“It’s every leader’s responsibility to plan for his or her eventual departure,” says Jay Ferro, ÍæÅ¼½ã½ã of the American Cancer Society.

Succession planning may seem like common business sense but it wasn’t always a requirement for corporate IT departments, historically tasked to make sure the computers worked. More organizations now look to technology as an engine for business growth and must have a succession plan for the ÍæÅ¼½ã½ã. “IT used to just keep the lights on, but now they’re using IT to create a competitive advantage,” John Reed, senior executive director at Robert Half Technology, says. “In many organizations today, the IT group sits with the business group and is very involved in strategic decisions.”

Ferro, who joined ACS in 2012, says that he has about five candidates who will be capable of doing his job in one to two years, with proper mentoring. Preparing the company in the event something happens to him is good corporate responsibility. “It mitigates the risk to the organization that if I get hit by a bus or win the lottery we’ll be in good shape,” Ferro says. That might create a sort of tension for some leaders but Ferro says that ÍæÅ¼½ã½ãs who feel threatened by talented subordinates might not be the leaders their companies need. “A players hire A players,” he says. “B players hire C players because they feel threatened.” He also says he challenges his direct reports to identify three people that can take their role, further buttressing the company’s IT ranks.

Succession planning starts at the top

Succession planning is often driven by the board of directors and CEO. Ferro says that while he learned about succession planning while working at insurance company AIG, ACS’ board is “very keen” on the work because it mitigates risk. But, generally, he says a good succession plan is vital for ÍæÅ¼½ã½ãs who want to cultivate a good legacy for when they leave. “You don’t want to disrupt a company that is meaningful to you,” he says.

[Related: Are You Ready to Replace Yourself? ]

Owens Corning ÍæÅ¼½ã½ã Steven Zerby, whose succession plan includes both external and internal candidates, says the work requires the delicate balancing act of finding time for candidates who typically have “big jobs” as heads of infrastructure or application development to learn the ÍæÅ¼½ã½ã role while still performing their daily duties. For example, a ÍæÅ¼½ã½ã might invite his mentee into a weekly meeting with a CISO to learn how ÍæÅ¼½ã½ãs interact with other business partners. He says it’s crucial that ÍæÅ¼½ã½ãs make the time to let candidates see what they do so they can learn how to prioritize tasks, and when to purchase technology or build solutions internally. “The trick is carving off time for them to be watching and learning,” he says.

[Related: ÍæÅ¼½ã½ã Succession is a Double-Edge Sword ]

Not every organization looks inward for ÍæÅ¼½ã½ãs. In fact, a quick perusal at ÍæÅ¼½ã½ã hires of Fortune 500 and larger organizations over the last few years suggests companies simply went out and bought a ÍæÅ¼½ã½ã. Marc Cecere, a Forrester Research analyst who has helped the likes of Disney, Capital Group and NASA redesign their IT departments, says that some companies look at external candidates when they don’t feel they have the staff on hand to accomplish a crucial project. Cecere says knows of one company that hired an external candidate to consolidate seven application groups into one. “They needed someone who could manage the applications, as well as work with the business leaders, so they targeted someone from outside the organization to take over the group,” he says.

Most organizations don’t have succession plans at all, says Reed. Of 1,400 IT leaders Robert Half Technology surveyed in 2012, only 20 percent had such plans in place. He says that one reason is that most companies simply don’t have time to cultivate understudies in the IT department because they’re so focused on growing the business. It’s a battle everyday just to keep pressing forward, they don’t have the time, strategically, to think that one day someone will take their place,” Reed says.

Another reason is that most ÍæÅ¼½ã½ãs don’t want to feel as though they have to look over their shoulders at someone who could take their job one day. “Most ÍæÅ¼½ã½ãs are not real comfortable developing somebody who can come in and take their jobs,” he says. The problem with this thinking, he says, is that it encourages talent to leave because they feel as though there is no path forward for them. He urges ÍæÅ¼½ã½ãs to cultivate potential successors. “People see movement and progression so they don’t need to leave to achieve their goals,” he says.

The ÍæÅ¼½ã½ã-mentor paradox

Regardless of whether ÍæÅ¼½ã½ãs groom within or their CEOs go ÍæÅ¼½ã½ã hunting, succession planning can be difficult, particularly at large companies, where there is a shortage of ÍæÅ¼½ã½ãs who are prepared to manage IT for multi-billion-dollar corporations.

Why are ÍæÅ¼½ã½ãs for Fortune 500 and larger organizations so hard to come by? One reason is that technology has diversified so much in the last 20 years that that candidates who may be talented enough to be ÍæÅ¼½ã½ãs may not want the jobs because they can forge high-paying careers in IT without the administrative responsibilities required of the ÍæÅ¼½ã½ã role. “Unless you’re deeply motivated by crafting an organization and running an organization” other IT positions may be more liberating because you can work “under the radar” without the watchful gaze of the board or other senior managers, Zerby says. “I kind of get it.”

Ferro agrees, noting that the proverbial “seat at the table” ÍæÅ¼½ã½ãs at large companies earn today comes with a strong focus on operations and administrative overheard that may not appeal to technical people who want to live on the “bleeding edge” and would rather lead an innovation hub versus sitting in performance reviews, board meetings and audit committee meetings. Even so, he says, it’s important for ÍæÅ¼½ã½ãs to try to cultivate the best talent they can to step into their shoes. Not just for the welfare of the company, but for the rank-and-file staff whose livelihoods depend on a strong IT leader. “They’re working their butts [off] and you owe it to them to minimize the disruption in their lives.”