Executive Search Firm Consultant Talks about Tough Market for Senior IT Talent

Jack be nimble, Jack be quick, Jack jumped over the candlestick. You might ask: “What does a children’s nursery rhyme have to do with IT.” It sums up what companies now look for in senior IT talent. Shawn Banerji, managing director of Russell Reynolds Associates’ global technology sector, says, “Today’s CIOs have to be agile enough to react to unexpected situations or challenges without getting burnt.” Banerji’s firm is one of the oldest executive search firms specializing in recruiting CIOs for clients such as General Motors, Hewlett-Packard, and Toyota. He says, “We have done several hundred CIO searches. In 1996, we recruited Ralph Szygenda away from Bell Atlantic to become global CIO of General Motors.”

While at the MIT Sloan CIO Symposium 2009, enterpriseleadership.org sat down with Banerji, a speaker at this venue, to talk about job prospects for CIOs and their direct reports. Banerji has been with Russell Reynolds since 1999. Here is what he had to say:

EL. Can you explain how your firm works?

SB. We are one of the oldest retained (contingency) executive search firms in the country. Client companies pay us to help them identify, assess, recruit, and retain qualified talent. About two-thirds of the candidates we source currently hold executive management positions. Their employers recognize

the value they provide to the organization. We use our network to go after these candidates and then introduce them to our clients’ opportunities. About one-third of the candidates we source are proactively looking for positions and have reached us through their own network. If these people meet our clients’ criteria, we will engage with them about our recruitment process. Unlike some firms, we don’t shop candidates’ resumes around to multiple companies. We recruit for specific positions and get paid if the client company hires one of our candidates.

We operate with the C-suite. For technology, we recruit mostly CIOs, CTOs, and their direct reports, such as a vice president of applications, a vice president of infrastructure, a chief enterprise architecture, or a chief security officer. We don’t touch the layer below these executives.

We deal with some of the largest companies in the world. We also recruit for privately held companies with anywhere from $100 million to $400 million in revenues.

EL. What is the corporate attitude right toward IT?

SB. We see two schools of thought evolving. Some organizations value IT more so than ever for two reasons: governance and efficiency. These companies say, ‘I need to do more with automation and efficiency in my business. How do I drive my operating model to a shared service model? How do I automate all of these manual processes so I can cut some of my staff?’ When it comes to governance, organizations need to have a more transparent view of what is happening inside the company, especially within the critical business lines, such as finance. It is not enough for the right hand to know what the left hand is going. The fingers on each hand must work in concert. Companies need to have strong IT leaders who know how to upgrade and will continue to invest in the existing environment.

EL. So, what kinds of IT leaders are companies looking for at this time?

SB. Companies are looking to turn people over and go after transformational leaders who can demonstrate the business impact of IT. Companies don’t want IT managers of the status quo. For example, CIOs have historically measured themselves by two primary criteria: head count and budget. How many people work for me and how many dollars do I control? Those metrics determined the importance of the CIO’s role and contribution to the company. Companies have turned this around by creating a new paradigm of the business information officer. This individual aligns better with the commercial interests of the business. This individual focuses on governance, as well as operational efficiency, and knows how to drive that kind of change in a meaningful, substantive measure. That individual does not look at headcount, but focuses on business contribution. He or she looks at their role in setting the company’s governance policy. Creating business value by leveraging existing resources is another key area for a transformational leader focuses. How do I do a better job of selecting and managing key vendors? How do I free myself up from running the daily operational aspect of IT and contribute more to the senior leadership teams? A transformational leader strives to answer these questions.

EL. Are there reasons why a company might turnover its IT leadership for new players?

SB. I don’t want to sound harsh, but some companies look for a new CIO because of return on investment. Not all companies value IT in terms of governance and efficiency. Many companies value IT as it relates to what the IT spend contributes to the organization. For example, if the largest line item on the balance sheet is technology, then the return on that technology investment better yield ways to increase revenues or to attract new customers. Some times, companies might replace a highly paid CIO with someone who makes far less. It’s not worth paying something an exorbitant amount if they can’t produce the kind of results the company expects.

EL. Are you dealing with many new CIO positions?

SB. We have a number of them in the pipeline. We went through a period where we did many new assignments for brand-name companies.

EL. Some CIOs leave positions with Fortune 1,000 companies to start their own consulting firms or to go work for a startup. They don’t seem to rebound to where they once where. Is it hard for some CIOs to get back on the Fortune 1000 saddle again?

Some of these executives are in transition. Perhaps, they left on their own or were asked to resign. Many of these CIOs will have a hard time regaining the stature they once had for several reasons. Many of them are viewed as the archetype of that legacy paradigm of the CIO. Like the great generals of yester year, they commanded troops across large and complex global businesses. Today’s organizations don’t perceive these executives as nimble, fast-moving CIOs who can drive change through influence rather than by direct edict or mandate. Legacy CIOs have been empowered to drive change or to tell people in the organization what to do. Today’s paradigm stresses collaboration and collegiality. CIOs need to lead by the carrot, not the stick. They have to convince and persuade business line managers and divisional CIOs who now report directly to business units, instead of the corporate CIO.

Some CIOs in transition didn’t fall into the company’s succession planning continuum. If someone has 30 or 40 years of IT experience, perhaps he or she did not mesh well with people coming up the ranks. On the other hand, some companies might want a well seasoned or a retired CIO who doesn’t mind staying for a few years, grooming a successor, and then leaving. This happened at Chubb Insurance. Last year, a bank asked us to find a retired or a semi-retired CIO to sort out the current technology situation and create a succession plan.

EL. Do you see any consistencies with the backgrounds your CIO candidates possess?

SB. In the past 10 years, we have seen more diversified backgrounds, with a greater emphasis on business. We don’t necessarily look for people who have a computational, engineering, or mathematical background. Instead, we look for people who are superlative business and process executives. These individuals know how to look at a business and understand where the opportunities exist and where to apply technology to create business value. For example, if a company manages technology more for cost than innovation, it will hire a CIO who understands finance. The CTO has become the be-all and end-all global technical executive who understands things like service-oriented architecture.

EL. Can you be specific about the competencies that companies want in a CIO today?

SB. Companies want someone who can apply technology to create more broad-based business value, but who also has expertise in another area such as sales or marketing. This individual might have an MBA or be someone who has run an operational business unit.

The majority of candidates we see have spent some time in areas outside IT of during their career. At some point, they decided to return to IT, either to head up a project management office or to do strategic planning. These roles provide a segue to take on broader IT operational responsibilities.

Ten years ago, we got more requests for consultants from McKinsey or Accenture. That has changed. Organizations want people who have owned the business processes and have accepted accountability for the results. Consultants don’t operate that way. On the other hand, candidates who have been in consulting during their career usually have strong strategic planning skills, good project management skills, and good client relationship skills. We would consider candidates who have married this experience with corporate IT experience.

EL. What is your firm’s formal process for screening candidates and what similar process do client companies follow?

SB. We use a very specific methodology called competency-based interviewing. It causes people to relive their professional experiences. It’s analogous to drilling a well. For example, we might ask a person this question: Tell me about the time that you had to drive change across an enterprise and you got pushback from key stakeholders? Someone can easily give a theoretical answer to that question. Based on the answer, we might then ask: Who gave you the most pushback and why? How did you bring order to the governance process to win over this stakeholder? What concessions did both parties make to bring about a compromise? How were you able to demonstrate the business value of IT?

The more we drill through the answer, the more we learn about how the person handled the situation. If someone hasn’t done what we ask about, then he or she is usually lost for words. You can’t make this stuff up.

Our cadre of industrial and organizational psychologists helps us to evaluate candidates. Working with each client, we create an index of specific competencies, which we force rank. We interview against those specific competencies to develop a candidate assessment. The client company also interviews against the same set of criteria.

EL. Do you screen for whether or not the candidate fits the client’s corporate culture?

SB. Yes, cultural assessment is very important to us. In fact, we recently rolled out a new tool called a cultural analyst. There is a rigor and a discipline in the science of assessing the competency of people to do the job. We marry these things into a very scientific rigorous process that provides a holistic view of this person. Although a candidate might have great skills, he or she might be a disaster because of the cultural fit. Conversely, a candidate might have most of the skills and competencies, but be a better culture fit than candidates with better qualifications.

EL. Is there any reason why you won’t work with a qualified candidate?

SB. We’ve seen a number of candidates who have lied on their resumes. For example, some candidates will turn a one-week executive leadership course into an MBA.