by Martha Heller

Running Your Own Technology Company

Oct 21, 20086 mins
IT Leadership

CIO to CEO: How to transition to tech company honcho

How many times have you thought, after listening to an awful technology vendor presentation or watching your software partner miss deadline after deadline, “If I ran that company, things would be different.”

It may be time to act on that impulse, if you have the right background and a good deal of drive. CIOs who want to run the show as CEO are finding that technology companies are a natural fit. As longtime customers of IT vendors, they know the products and the development process, they know the business—from the customer view—and they’ve sat through enough presentations to know how (or how not) to sell. And if they’ve been networking with their peers, they should have a good customer target list as well.

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These experiences are your price of entry to running a technology company. But as three CIOs who followed this path explain below, you must also decide that this is your career goal and set in place a strategy to make it happen.

Get Cross-Functional Experience

“In 1985, I had an epiphany,” says Mike Kistner, CEO of Pegasus Solutions, a provider of reservation and distribution technology, and financial and marketing services in the hospitality industry. “I was a senior developer at Super 8 Motels working on a general ledger program, and I realized that the date fields had two digits. I thought, ‘this will be a nightmare in 2000’ and I vowed to get out of IT before Y2K.”

This epiphany led to another one for Kistner, that the pursuit of management roles outside of IT could be a critical step on the road to CEO, if he managed his career correctly. Kistner began to build relationships that would pave the way into new areas of the business. As Super 8 was acquired by HFS and then by Cendant, Kistner kept a hand in IT but he also accrued cross-functional leadership experience. At different times, he held responsibility for IT, reservations, guest services, convention planning and other operational areas.

During his tenure from 2000 to 2005 at Best Western, he led IT but picked up distribution as well. In 2005, he joined Pegasus Solutions as VP of operations and technology, and then became CEO in June 2008.

His advice: “If your goal is to run a company, you need to get out of IT and into other parts of the business. My old boss, David McNicholas [former CIO of Avis] used to say, ‘to a man with a hammer, everything looks like a nail.’ You need to put down the IT hammer once in a while and pick up tools from other parts of the business.”

Fill in Your Skills Gaps

Sean O’Neill is CEO of Newmarket International, a sales and catering solutions provider for the hospitality industry. He was the CIO of ITT Sheraton when he realized that he wanted to broaden his aspirations. “I was creating a ceiling for myself as CIO. I wanted to have broader influence over decision making and decided to pursue a different path.”

During interviews with his next employer, travel vendor Grand Circle, O’Neill talked about “how we had transformed information technology at ITT Sheraton into a business function that was integrated with the business. They knew that while I was coming to them as a CIO, my motivation was to be on the business side.”

Grand Circle hired O’Neill as a CIO with the understanding that he would soon add EVP of operations to his role. Several years later, in 2001, he joined Newmarket as CEO. “I chose a technology provider strategically,” says O’Neill. “I wanted to stay close to what I knew best. I had the experience of being a consumer of these products and could get up to speed very quickly.”

His advice: “Become a student of the skill sets required to run a business,” says O’Neill. “As CIO, you have access to a wide variety of leaders both inside your company and out. Interact with those people and start to understand where the gaps are in your own skills.”

He found, for example, that while he had a good grasp of functions like accounting, human resources and sales, he needed a better understanding of the financials. “I would risk looking like someone who doesn’t get it by raising my hand in a meeting and asking, ‘Why did we use this debt structure?'” he says. “I would anticipate my next meeting with our CFO and prepare questions.”

Engage Your Customers

In 2006, Trent Gavazzi was a business-line CIO with the capital markets division of the Bank of Montreal in the U.S. He was implementing risk and compliance systems and realized that he had no way of providing executives with a way to monitor systems and be alerted to urgent events. Gavazzi started looking in the marketplace for what he needed but found that there was no solution that fit his problem.

He started floating the idea of a risk-monitoring system to people in his professional networks and received enough enthusiasm that in 2008 he launched QuickWaters Software, a consolidated risk management alert software provider. Having come from a family of entrepreneurs, Gavazzi knew he would wind up launching a business at some point, but found that his CIO background was critical for this venture.

“My CIO background helped me reduce the barriers to entry,” says Gavazzi. “I knew all of the hot buttons of a large financial services organization and what slows down projects. My years of installing systems taught me to reduce the complexity of the product and do the right documentation up front. As a CIO-turned-software-company-CEO, you have to learn from the way you tortured your vendors so that you don’t make the same mistakes they made,” he says.

His advice: “Running your own software company is not for everybody. You have to be able to engage your network, let people know what you’re doing, be passionate and believable and creative about how you get attention. When you’re CIO, people are calling you. When you’re running a software company, you are the one making the calls.”

Martha Heller is managing director of the IT Leadership Practice at the ZRG, an executive recruiting firm in Boston. Reach her at