News Feature

Being the First CIO Can Be Dangerous

By Eric Berkman

October 15, 2001 — CIO — Opinder Bawa faced a crossroads in his career last October. As the head of professional services at a successful software company, he was ensconced in a comfortable IT position. Still, Bawa was intrigued when Netro, a broadband wireless access company in San Jose, Calif., was looking for its first CIO. The challenge of being a CIO and Netro’s predictions that the $100 million company would be a $1 billion company in two years proved too compelling to resist. He accepted the job.

One year later, Bawa is another victim of the tech wreck. After routinely turning in $25 million to $30 million a quarter, Netro closed last quarter at slightly more than $2 million. Despite Bawa’s efforts to establish the CIO role and develop organized IT processes, his position was eliminated in the carnage. The lesson Bawa, who has since started his own IT consultancy, has taken away: Tread carefully.

He admits there were several red flags he should have paid more attention to when he considered the position. First was the tiny backlog of orders Netro had in hand when he joined the company, and second was the growing amount of Netro inventory stuck in its distributor channels. "It’s embarrassing to admit, but I got caught up in the standard story of how their stock would go from $100 to $700," Bawa says. "Had I paid attention to the signs, they would have clearly shown me that this would have been one of the hardest hit markets in the downturn."

Even under the best circumstances, the day-to-day reality of being a company-first CIO can be brutal. There is resentment from people loyal to the previous IT administration, suspicion from people skeptical of the new position, and resistance from departments and business units used to doing things their own way. Even when a company-first CIO does all the right things to solidify the role, there’s the risk that the company won’t be committed to the position in the long run.

Ray Causey is a good example of that situation. He took over as CIO of San Diego-based Mail Boxes Etc. (MBE) in 1999 and went to great lengths to establish his role among management and IT staff.

Two years later, Causey’s pet project?a $25 million satellite link between 3,500 domestic franchises and corporate systems, an Internet-enabled point-of-sale system and an Internet-based shipping system?has faced harsh public criticism and franchisee revolt (see "P.O.’d," Darwin, www.cio.com/printlinks), but that’s not the worst of it. Since Causey spoke with CIO for this story in July, MBE eliminated his position. He was not available for comment after leaving. MBE spokespeople say his position was eliminated as part of a corporate restructuring that followed MBE’s merger with UPS this summer and that his decision to accept "early retirement" was not performance-related. Still, before leaving MBE, Causey acknowledged that being a company-first CIO "can be a huge headache."