J.P. Morgan Chase and Bank One. FedEx and Kinko’s. Maybe Comcast and Disney. Mergers are in fashion again, in what some observers suggest is a sign of a strengthening economy?or at least investor confidence. For CIOs caught up in mergers, it’s a time to answer crucial career questions. Will they lead the combined IT group? Be part of postmerger plans? Or be kicked to the curb? Answering those questions doesn’t have to be a tea-leaves reading.
Stephen Mader, CEO of executive recruiter Christian & Timbers, which has helped CIOs transition to new jobs following M&As, identifies four factors that executives?including CIOs?can use to help them determine whether to jump ship ASAP or stick things out.
Where does your company stand? If your company will operate as a separate entity after the merger is complete, you have a better chance of keeping your job. If the merger is a consolidation strategy where businesses will be blended to obtain efficiencies, your odds for staying on don’t look as good. One example from the CEO ranks: Michael Capellas, Compaq’s one-time CIO who became its CEO, stayed for about a year after announcing a merger with Hewlett-Packard. He now heads MCI.
Where’s your boss? Mader says the boss’s fate is an indicator of what will happen to the CIO. “If two companies are merging in a total absorption and consolidation strategy where you only need one CIO when it’s over, rest assured that 95 chances out of 100 that the prevailing CEO in that merger will have his own prevailing CIO remain in charge,” Mader says. (If the CEO is unhappy with the CIO, it’s a different story, he adds.) Similarly, if a CIO’s CEO gets a subservient role after a merger, that CIO may want to start looking for a job. That former boss probably isn’t going to remain for very long.
How much integration work is there? If the acquiring company doesn’t intend to consolidate post-merger operations, there may not be a lot of integration work. If the merger is going to require massive integration, that should help to sway a CIO’s career decision one way or the other depending on his work preferences.
Where’s the opportunity? If a CIO sees a lot of work ahead to make the merger a success and thinks he has the skills and resources to do it, the merger could be an opportunity to showcase his leadership and management abilities. Says Mader, “He’ll be in a high-visibility spot that will be easy to recognize and reward once they’re complete.”
One CIO’s Merger Story
When John Mariano, the former CIO of Academic Management Services, learned last year that Sallie Mae would be acquiring his company, he didn’t know how the deal would work. He says he figured that Sallie Mae “would want to find some place for me.” He felt similarly about his IT team.
Mariano, 36, found reason to worry when he learned that Sallie Mae was planning on centralizing IT in one location. To keep a job, he’d have to relocate to its Virginia headquarters. Meanwhile, Mariano’s mother was suffering with a terminal illness. He was caught between wanting to care for her and for his IT department (some of whom stayed to work for Sallie Mae).
Mariano says he asked Sallie Mae executives if they saw a long-term plan for him. “At one point they said there was something, then they said they weren’t sure,” he says of Sallie Mae. “I think they were looking and trying [to find something for me], but I was not willing to relocate. I wanted to stay in New England.” He decided to leave AMS on Dec. 31, 2003, before the merger was complete. (Sallie Mae declined to comment on Mariano’s departure.)
In February, Mariano was freelance consulting, daunted by the task of looking for a stable job. “I don’t even know where to begin,” he says of the process. “My strength is yielding value through technology. Whether it’s as a technical architect or a CIO doesn’t matter as long as I’m in that function. Title doesn’t matter. That’s what I love to do.”
Photo of Mariano By Furnald/Gray
News of other moves
Terry Prether, former VP for IT and corporate services at Attachmate, was named CIO of Shurgard Storage Centers, a self-storage real-estate investment trust. Andrew G. Platt was promoted from director of business technology to VP for information services and CIO at J.M. Smucker. He reports to the food company’s controller. Keith Satterfield, former director of management information services at Eastman Kodak subsidiary Kodak Versamark, was named CIO. He reports to Nachum Shamir, Kodak Versamark president and a VP of the parent company. Joseph Joy was appointed VP and CIO of Health Management Systems, a provider of cost containment services for public health-care programs.