I ask every CIO I talk to the same question: Do you want your next job to be another CIO role or do you want to move out of IT? Roughly 40 percent, I find, want out. While many in this group yearn to start their own company or move directly into a CEO role, the majority see future happiness as a COO. They know that the role bears some similarity to their current job but has a broader scope of influence and presents a meaty new set of challenges.
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There are a number of career paths from CIO to COO. One of the most promising involves managing the supply chain. “The move from IT to supply chain leadership is beginning to happen on a broader spectrum,” says Mike Hugos, former CIO of Network Services Company and author of Essentials of Supply Chain Management. “Traditional IT, as we’ve known it for the last few decades, is being outsourced and CIOs are being downgraded to reporting to COOs and CFOs. With technology as a leading concern for supply chain leaders, CIOs are poised to step into the role and report directly to the CEO. The move gets the CIO a highly visible role and a seat at the boardroom table.”
With their experience automating the supply chain, managing a slew of vendors and negotiating a complex set of contracts, CIOs can make compelling candidates for chief supply chain officer. Four CIOs who have made the move share their experiences and offer advice for those interested in making the transition.
George Chappelle, Chief Supply Chain Officer, Sara Lee
In 2005, George Chappelle left his role as CIO of H.J. Heinz to join Sara Lee as its new CIO. Nearly three years later, he became chief supply chain officer of Sara Lee’s North American operations. “I had some previous experience in supply chain before coming to Sara Lee as CIO,” he says. “As we implemented SAP, we touched parts of supply chain, like inventory control, so I had gotten to know the supply chain through that project, as well.”
What to Expect
All operations, all the time. “Ninety-five percent of what I do now is operations,” says Chappelle. “Outside of an annual operating and long-range plan, we’re plotting the future in days and weeks and following an awful lot of numbers.” While transaction processing and the data center have exposed CIOs to their share of operations, “the supply chain role is completely different; success is no longer measured in 12- to 18-month intervals,” he says.
A smaller geographical footprint. While most large-company CIOs run a global organization, many chief supply chain officers do not. “Food companies do not lend themselves to a corporate chief supply chain officer because food is sold by regions,” says Chappelle. “As CIO you have the opportunity to interact with every geography; now my focus is North America.”
Keith Kaczanowski, VP of Supply Chain Management, Brady Corp.
In 2005, Keith Kaczanowski was CIO of Brady Corp. when the company needed someone to spec out a plan to source products from Asia. Kaczanowski was ready for a change, so he took on the role of VP of supply chain management; he now runs global sourcing for a group of newly acquired businesses.
What to Expect
One step closer to the action. “IT is an enabler to the rest of the business; it impacts results but at a step removed from the P&L,” says Kaczanowski. “In my supply chain role, I am measured on specific cost-reduction targets, working-capital improvements, inventory improvements and new-product introductions. I like having accountability for targeted operating results and being closer to the action.”
One step farther from the action. While supply chain leaders may be closer to the company’s P&L, in some ways, they are farther away from what takes place in the enterprise. “I find that I know more about the part of the business I’m in but less about the parts that I’m not,” says Kaczanowski. “When I was in IT, I enjoyed knowing a lot about the entire company.”
Mason Rotelli, VP of Supply Chain Management, Communications Supply Corp.
When Wesco International acquired Communications Supply Corp. in 2006, Mason Rotelli, who had been CIO for eight years, added supply chain to his role. Two years later, as the parent company was absorbing portions of IT, Rotelli moved out of the CIO role completely and became VP of supply chain management. “I was excited about the opportunity to be more deeply involved in the company’s P&L,” he says. “Considering our cost of goods sold is 80% of what we sell, supervising our spend is pretty important.”
What to Expect
All vendors, all the time. “I spend most of my time developing relationships with hundreds of suppliers, learning to position them in the marketplace, understanding their ability to be successful, establishing performance-based contracts and negotiating terms,” says Rotelli. “CIOs who do not enjoy their time with suppliers will probably not enjoy this job.”
More execution, less design. While as CIO “execution” has to be your middle name, you still spend plenty of time on strategy and design. “I now manage purchasing and inventory management people, who are more execution-focused,” says Rotelli. “If you love the creative side of IT, you may miss that in supply chain.”
Allen Dickason, former SVP of Supply Chain, Brach’s Confections
In 1991, Allen Dickason, then IT director at Frito Lay, took advantage of PepsiCo’s leadership program and accepted an assignment as VP of distribution for Frito Lay. After returning to the IT organization, and after CIO roles at Dean Foods and Kinko’s, he became SVP of supply chain for Brach’s Confections in 2004.
What to Expect
Your CIO background is an advantage. While CIOs will have a steeper learning curve when it comes to the weights and measures of raw materials, they will also have an advantage. “As a supply chain leader with a CIO background, you have a broader and more complete understanding of how your business and its systems work,” says Dickason, who left Brach’s in 2008 to do IT and supply chain strategy consulting. “When my suppliers struggle with their own technology issues, my systems background is a help to them. It allows for a better partner relationship and a smoother-running supply chain.”
Executive committee credibility. CIOs who deliver quality IT services will certainly earn the respect of the executive committee. But move into a supply chain role and “the general managers and presidents see a different side of you,” says Dickason. “The fact that you are multifunctional increases your value to the organization dramatically and matures you as an executive.”
Martha Heller is managing director of the IT Leadership Practice at the ZRG, an executive recruiting firm in Boston. Reach her at email@example.com.