How Stars Are Made

ING Insurance Americas CIO David Gutierrez needs little prodding to talk about the qualities of Raymond Karrenbauer, who is the company’s CTO and a rising IT leader. “First off, he’s brilliant,” Gutierrez says. He then launches into how Karrenbauer came up with a new architectural framework for ING’s systems in the United States, which was adopted by other ING CIOs across the Americas and in the Asia-Pacific group. But while Karrenbauer’s IT skills shine bright, Gutierrez is quick to note that his leadership skills are equally strong. “A lot of people want to work with him,” Gutierrez says. “He attracts a lot of people who want to excel.”

If you aren’t blessed with IT managers such as Karrenbauer—up-and-comers who are doing great things for IT in the here and now—where do you find them? The answer might be right outside your office door. Future leaders in information technology aren’t born like that; they are made. By you. Karrenbauer’s abilities didn’t develop in a vacuum; he’s the beneficiary of ING’s and Gutierrez’s longtime emphasis on leadership development.

The honorees of our inaugural Ones to Watch awards, including Karrenbauer and others whom we feature in “What Leadership Looks Like” (Page 40), have spent many years developing and honing their skills. Often, they were identified early on. They were challenged relentlessly, their weaknesses targeted for improvement, and only then, were they promoted. Most likely, a great boss or two has shown them plenty of attention—mentoring, guiding, pushing. “People aren’t accidental leaders,” says Keri Pearlson, director of the Senior IT Leadership Development Program at The Concours Group consultancy. “The truth is that leaders can be made.”

The elements of leadership development plans vary by company and CIO. Some CIOs rely on mentoring programs or classroom courses; others challenge their high-potential employees with cross-departmental assignments or fast-tracking through the ranks. In a larger sense, though, the differences between the programs are inconsequential. What matters most is that CIOs have made talent-building a top priority.

The pedigree resulting from all this grooming has its costs. For CIOs, a leadership development program takes time, flexibility, forethought and patience. In short, it takes leadership from you. “You can’t do leadership development half- heartedly,” says MetLife CIO Steve Sheinheit, a judge of the Ones to Watch awards. Even ING’s Karrenbauer isn’t perfect, which is why leadership development never stops. “He still needs some grooming on how he addresses the business community,” CIO Gutierrez says.

But leadership development programs are demonstrably worth the effort, say CIOs who have implemented them. They end up with a staff of highly skilled employees who are steeped in the inner workings of both IT and the business. These respected IT managers extend the influence of the CIO, as they go about getting buy-in from the business side of the organization. And because they know what the business needs, these up-and-comers are poised to churn out the next killer application or product.

Sheinheit, for one, scoffs at CIOs who are sitting on the sidelines, hoping leaders will emerge without any guidance or planning. “What else would you do?”

So, what are you doing?

The Building Blocks of Successful Leadership Development

Here are a few foundation stones necessary for any leadership development program. First things first: You can’t have leadership development without support from Mahogany Row. As Cindy McCauley, a senior fellow at The Center for Creative Leadership, puts it, many effective leadership programs start at the top and cascade down. If your CEO or CFO thinks leadership development is a waste of time and money, chances are your leadership development plans will be sunk. “Senior management support is so powerful,” says McCauley, who was trained as an industrial and organizational psychologist. When the support is there, “people’s bosses have had the same experiences and are using the same language,” she says. And then leadership development is infectious, spreading out into the halls, cubes and conference rooms of the organization.

At the same time, CIOs must have just as much skin in the game as their CEOs. CIOs need to be role models, affirming that participating in leadership development is the only way to move ahead. According to Jay Conger, professor of leadership studies at Claremont McKenna College, CIOs have to say explicitly what leadership behaviors are important. Rather than just lauding “teamwork,” for example, CIOs should say, “The ability to surface conflict with a group and constructively resolve it” is an expected behavior, he says. Equally important is that CIOs identify which leadership behaviors are not acceptable and make personnel decisions based on those guidelines. “You don’t promote people who have bad behaviors,” Conger says, such as a tendency to overwork their direct reports to the point of burnout. “They might get results, but they don’t have appropriate behaviors.” Finally, CIOs should highlight the positive behaviors of high-potentials as often as possible at meetings and IT department functions. “If CIOs do it once a year, then people will think that it’s not that important,” Conger says.

McCauley emphasizes that companies should first do an assessment of the business need behind any proposed leadership development program. For example, some companies may feel that they don’t have enough high-potential people in their pipeline, or that their leadership needs have changed—for instance, they are expanding globally and need more managers to work cross-culturally. “The more that the content of the program is focused on the business issues that they’re currently facing,” she says, “then the more they can see the business imperative [for creating such a program].”

Making sure you have the right people in your program is also essential. Talent development usually takes a long time—years, in fact. But leadership development takes even more effort than simply picking out someone who is technically proficient and sending them to a management class. “Initially, when you come into IT at a lower level, you are rewarded for your technical skills on a somewhat individual level,” says MetLife’s Sheinheit. “But as you move up, you are rewarded for your influence skills and your capability to understand complex issues.”

A person’s ability to stand out—first on his own, then among a peer group—is one of the ways that ING’s Gutierrez spots future leaders. “You cannot really go into a group and point out the leaders; they have to show that leadership side,” he says. “And we watch for those things: who is hungry to move ahead and be a leader.” Gutierrez even goes so far as to send high-potentials for psychological evaluations if he thinks a person has the technical skills but may not have all of the managerial and leadership skills. “It’s expensive for the company, but we are trying to create a population of good leaders here,” he says.

Choosing the Right Leadership Development Program

Here are more options for leadership development than any one CIO could ever need. Therefore, it’s critical that CIOs choose carefully and implement programs that are best suited to the holes in their staff’s skill sets and the overall company direction.

A leadership development program doesn’t have to break your back, nor your training budget. “Not everything has to be a big, formal program,” says McCauley.

Stretch assignments. One of the top leadership development methods among the 33 Ones to Watch honorees is stretch assignments—when an up-and-comer’s mettle is tested in a task beyond his abilities. Their stories are wide-ranging: working in a developing country; having sole responsibility for large, highly visible and strategic programs; making a white-knuckle, $150 million presentation to the CEO; having P&L responsibility while running an outsourcing deal; making corporate purchases for more than $1 million; and consolidating three separate infrastructure departments into one organization.

At ING, you need a world map to keep up with Gutierrez as he ticks off the global assignments and the changing positions for all of his leaders in training. The current CIO in Chile (one of 12 ING Insurance Americas CIOs) first gained notice for his work in Canada. An IT star from Mexico is now in the Hartford, Conn., office and shows a lot of promise. A former Chilean staffer is now in the Atlanta headquarters. An Argentinean up-and-comer is also being moved to Atlanta. “We try to make room for them, because we don’t want to lose them,” Gutierrez says. In a global company of 120,000 employees (12,000 of whom are in IT), he is not shy about moving his players to far-flung places where complex IT opportunities arise and stars are forged. If high-potentials can’t be moved, then CIOs should look for ways to challenge them where they are.

Cross-training. At Sun Microsystems, CIO Bill Vass has designated three areas in which all of Sun’s IT up-and-comers need to spend one to two years working: operations, business systems development and architecture. “They all know how to get ahead, and they gain that breadth of experience while doing it,” Vass says. Every one of his 1,200 staffers moves into one of two tracks: general management or technical. In the general management track, which potentially points staffers toward CIO positions, they will have three jobs in Sun IT. One of Vass’s protigis, Leslie Lambert, is a Ones to Watch honoree and has moved through all the tracks.

First comes an operations assignment. Vass describes it this way: “This is where you give up your life and carry a pager. And when things break, it’s always not your fault. And the network will go down. And everyone is your boss and customer. And everything is an emergency.” The desired outcome for staffers is that they will learn a service mentality. “It’s high-adrenaline, but it’s very important in IT to have that background,” Vass says.

Second is a business systems development role, in which staffers get to know the users in the business and how to build the necessary systems. “They figure out what people in a business do for a living,” Vass says. High-potentials learn how to automate a process or build a system, but in a way that will not keep the operations people up all night. The thinking goes, they won’t want to do that because they know the operations role and its headaches.

Third, up-and-comers work in an IT process and architecture role, ensuring a consistent architecture when designing systems or processes. They draw on their previous roles in operations and business development to think about architecture decisions that won’t drive the operations people crazy or slow down the delivery from the business development folks. “Can you look forward and understand what the architecture is going to be?” Vass asks of his staffers.

The power of cross-training lies in the multiple perspectives gained. “People who only do development or people who only do architecture don’t have a clue about production,” Vass says. After his staffers go through the three roles, they understand the responsibilities of everyone they interact with in IT.

Another part of Sun’s leadership development program is a business rotation that usually lasts three months to six months. In an interesting twist, the high-potential employees become business customers of IT. “They get to see what it is like when you can’t book an order on an ERP system—what it’s like to experience that from a business perspective,” Vass says. They also see the other side of customizations, process changes and standards debates. Afterward, Vass says, they can come back to IS and say: I’ve done this job, I understand what the business is going through. In addition, they have forged business relationships and credibility.

The technology track is for Sun staffers who want to specialize in a specific technology area. These are the people who are stars in technical roles but just can’t make it in the business role or can’t work well with customers. “But you need those people who can fix anything,” Vass says. “And even though they failed [in one of the non-IT environments], they’ve learned a lot.”

Action-learning programs. McCauley, of The Center for Creative Leadership, says a trend in leadership development is what she terms action-learning programs. These combine the classroom with cross-functional teams that take on a demanding project and use it as a learning vehicle, while at the same time creating a tangible benefit for the organization.

Not far from ING’s global headquarters in Amsterdam, a chateau houses the ING Business School. Here, promising IT and business workers are sent for weeks or months at a time to immerse themselves in the inner workings of the company and its businesses. The assignments begin before the staffers touch down in Europe and continue well after they have left. ING also offers online and classroom-based classes that address leadership on many levels. What’s key, Gutierrez says, is that there is a lot of prework for every course so that staffers come to the sessions focused and ready for discussion. “We don’t just read through the slides,” he says. “We already have questions for the presenter.”

Direct application. Other trends in leadership development include seminars in networking, presentation skills and expanding the influence of IT leaders. These kinds of courses arise from a desire to “leverage IT within the organization,” says Claremont McKenna College’s Conger. What they have in common is teaching immediately applicable skills. “It’s more like, Here’s what we’ve learned, now let’s go put it in use today,” he notes. (Conger says the funky outdoor experiences that were so popular several years ago, such as group tree-climbing, are less in use today.)

Sustaining the Enthusiasm

Once CIOs have decided on a leadership development direction, they need to actively manage the program to make sure the right people are getting into it and that it fulfills their intentions. McCauley advises collecting ongoing evaluations of the program to build up evidence that it is delivering value. Otherwise, training funds can disappear in a down economy, or a major emergency project can take away staffers.

Elements that prove value include: Peers and subordinates view program participants as more effective leaders; a majority of the hires for high-level positions are internal promotions; and ROI calculations prove the link between leaders and better business results (though McCauley says that can be difficult). CIOs need to track how much money and time they have invested, she says, and then see what changes people who have been through the program make when they go back to the workplace.

“People have to see results from” leadership development, Vass says. He relates a story of a high-potential who approached him about becoming a CIO. Vass was able to plot out what the employee needed to do and the three areas he would have to work in. Though the person had some concerns about what he considered a slower career progression, Vass was able to convince him and guide him through each step. After the staffer completed the assignments, he was ready and quite happy to take a new role when a high-level position opened up. “You tell people, If you’re successful in the three roles [operations, business systems development and architecture], you’ll be promoted,” Vass says. “And everyone in the organization saw him work these roles and saw him get promoted.”

Not all rising stars stick around, waiting for that high-level job, of course. Inevitably, some leave for richer pastures or personal reasons. There’s not much CIOs can do to stop an employee who is determined to depart.

There are, however, practical and crucial ways to lessen the exodus. Conger says research shows that an employee’s boss is the single best determinant of whether a person will stay or leave. “So you have to assign your high-potentials to the best bosses,” he says. McCauley cites research from The Center for Creative Leadership and the American Productivity & Quality Center on the retention strategies used by five best-practice companies: compensation (both competitive pay and long-term incentives), opportunities for development and advancement, flexible working arrangements, and opportunities to take on significant responsibilities.

Above all, CIOs who have embraced leadership development say their programs aren’t just an IT thing; they are an outgrowth of company philosophies that are aligned with IT department priorities. “The company overall makes a very strong statement that having leaders is important for our company,” Gutierrez says. And when leadership development works, the Raymond Karrenbauers and other next-generation leaders of the world will give all that investment back to their companies with new systems and new ways of thinking that will make their CIOs very happy.