The Management Vacuum
When it comes to People and Organizational Development, from the CEO on down, C-level executives are relatively poor performers. Rajinder “Raj” Gupta, adjunct professor and executive director of the CEO Perspective Program at Northwestern’s Kellogg School of Management, has interviewed more than a dozen CEOs from companies including Walgreen’s, AON and Northern Trust about the competencies data. “In general, I found that the premium for CEOs as they rise through the ranks is a deep understanding of the business and customers, not necessarily on how they manage their people. The CEOs I spoke with are definitely aware of the need to focus more of their attention on people development,” says Gupta.
There’s opportunity here if CIOs can rise to the challenge. Michael Pilkington, managing director of corporate technology at Euroclear SA in Belgium, believes CIOs, like CEOs, have not focused enough on this area. “As executives, we are tasked with spending a lot of our time focusing on how to serve our clients; I think we should spend just as much time thinking about ways to motivate and develop our people,” he says.
When Pilkington took over IT at Euroclear, he made it a priority to respond to the general corporate feeling that the IT department was insensitive to users. He believed his team needed to work on its awareness of its internal customers’ needs, and not just those in customer-facing positions. Each member of his non-customer-facing team went through a half-day customer-focus training session (customer-facing staff went for a full day) to drive home the importance of customer awareness. Pilkington also ran a number of sessions to educate business users about IT.
What Do CEOs Want?
According to Gupta, CEOs want strategic-minded CIOs. The biggest deficits CEOs see in the current crop of IT chiefs are the lack of a deep understanding of business opportunities and the inability to communicate strategically with high-level internal and external stakeholders. Market Knowledge, Commercial Orientation and Customer Focus plug in there. “In industries where business is closely entwined with technology, or where it can be used as a competitive advantage, that’s where CEOs are looking for CIOs with high EQ,” says Reynold Lewke, Egon Zehnder’s North American CIO practice leader.
This trend is personified by Kumad Kalia, CIO of Direct Energy, and his CEO, Deryk King. King specifically recruited Kalia for his EQ. “I took great care to recruit someone with a good track record of operational excellence, strategic thinking, experience in customer service and a diverse career background,” King told the audience at the spring CIO Leadership Conference. (For more on this session, see "The CIO-CEO Relationship at Direct Energy".) “I expect a much broader contribution from my CIO; he has to be prepared to talk about issues outside of his immediate responsibility.” Kalia concurred: “The role of the CIO is more than just keeping things running,” he said. “We’ve had to acquire a lot of the skills of a traditional general manager.”
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