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LEADERSHIP -Rules Of The Road For Turnaround CIOs

By Allan Holmes

August 01, 2005 — CIO —

Wanted: CIO for the number-three office supply company in a three-company industry. Company being investigated for inappropriate promotional payments and falsifying documents. Executive in charge of retail and CFO both resigned in January. CEO resigned in February. In March, company announced a fourth-quarter loss of more than $24 million before the sale of major assets. Company still digesting an acquisition concluded more than a year ago.

Sound like the ultimate nightmare job? Not for Randy Burdick, who took the CIO post at OfficeMax in March. "Turnaround situations attract me when I think there is a chance for success," he says. "The opportunity to be on the ground floor of a new team was exciting, and I believed that the challenges at OfficeMax were solvable."

Burdick isn’t some masochistic executive looking for a short trip to the unemployment line. He’s part of a band of technology chiefs who call themselves, or find themselves called, turnaround CIOs. They are brought in when Something Big has, is or will go down at a company. The Something Big could be financial problems or even malfeasance, consistently bad performance in IT or the broader business, or a merger or major shift in strategy or operations.

The need for turnaround CIOs may seem the exception rather than the rule. But with many companies still struggling in an up-and-down economy and the federal government’s closer scrutiny of corporate finances because of Sarbanes-Oxley, a large portion of corporations are looking for these hired guns to fulfill three roles: firefighter for a business beset with numerous problems, drill sergeant for an out-of-order IT department, or guide for an organization embarking on a transformation. That means somewhere between 30 percent and 50 percent of companies in the market for a CIO need the turnaround variety, estimates Brad Brown, director of the business technology office for the McKinsey & Co. consultancy.

While the turnaround IT methodology isn’t carved in stone, there is a common set of steps that these CIOs employ. Some of these actions are common sense but are frequently overlooked, such as open communication with IT employees. Some are difficult decisions that the CIO must gut out for the good of the company, such as firing a large portion of senior IT managers. All require quick results, or the CIO will soon join his staffers on the street. Turnarounds are all about performance. "More than anything, you have to expect change," says Jeff Chasney, CIO and executive vice president of strategic planning for CKE Restaurants, which operates the hamburger franchises Hardee’s and Carl’s Jr. As a turnaround CIO, "you haven’t been called in because things are running well; they’re broken, and things have to change—a lot."

 

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