Can CIOs Make Good CEOs?

From the Jul 26, 1999 Sound Off Column

Last Friday, everyone who read the New York Times business section discovered how little faith the world has in the ability of a CIO to lead a large corporation.

The reaction, in the Times and other major newspapers, to Compaq’s appointment of Michael Capellas as its new CEO, was anything but encouraging. Analysts, the papers reported, were “skeptical” and “disappointed.” They bemoaned Capellas’s “lack of star power,” and they speculated that with Compaq’s executive turmoil, declining market position, and Chairman Ben Rosen’s reputation for back-seat driving, the board couldn’t find anyone else for the job. Desperate, reporters suggested, Rosen turned to a CIO. Even Wall Street offered up a lackluster reception to the news with a one dollar dip in Compaq stock.

Are the analysts right? Is a CIO the wrong choice to lead a company? Or can CIOs become masterful CEOs?

Capellas may well be the perfect pick for the job. With nearly twenty years in IT management–most recently as Compaq’s own CIO–Capellas certainly has a grasp of IT issues that escape most CEOs. He may even have the know-how to bring Compaq out of the ailing PC market and into enterprise computing. His predecessor, Eckhard Pfeiffer, had a more traditional marketing background, yet was ousted in April for failing to capitalize on the new business and distribution models that are all the rage in the Internet Economy. It is arguable that a CIO would not make that mistake.

In a market where technology is transforming distribution channels, sales models, and customer service, technological sophistication separates the wheat from the chaff. CEOs who don’t get IT aren’t up to the challenge. How hard is it to see the wisdom of hiring a CEO who appreciates the power of information technology, and knows how to use it? Judging from last Friday’s paper, too hard for the analysts, and too hard for the mainstream press.

What do you think? Can CIOs make good CEOs?