by Stephanie Overby

Forging Good Leaders in Bad Times

May 03, 200917 mins

Leadership development doesn't stop when the going gets tough. If anything, investing in the next generation matters now more than ever.

If there was ever a more difficult time to make leadership development a priority, you’d have a hard time convincing most IT executives of it. In the aftermath of the global economic meltdown, CIOs face a long list of challenges—from cost cutting and customer demands to strategic planning and successful innovation—and the resources available to accomplish them continue to contract.


Forging Good Leaders in Hard Times

Growing Gen Y Leaders

2009 Ones to Watch Winners

2009 Ones to Watch Judges

Executives across the board are downgrading their concern about the pipeline of top talent in their organizations. Corporate leaders ranked pressure to cut costs (83 percent) as their toughest business challenge, according to recent research from Personnel Decisions International, an HR consultancy. Talent management fell to dead last, with just five percent of survey respondents citing loss of leaders in key areas or insufficient talent as a concern.

Indeed, it would be easy for CIOs to shift into autopilot when it comes to developing the next generation of IT leaders. Problem is, say management experts, that without a guiding force, leaders will self select—and they may not be qualified for senior roles.

“Leaders are developing whether you want them to or not. The question is: Do we want to be aware of that and guide that in a conscious way?” says Karen Sobel-Lojeski, visiting assistant professor at Stony Brook University’s department of technology and society. “We need to pay more, not less, attention to leader development because leaders are coming up anyway.”

“The trick,” says F. Warren McFarlan, professor of business administration at Harvard Business School and author of numerous books on IT management and strategy, “is to be able to identify the remarkable people in the organization while getting the work of the business portfolio done. You’ve still gotta get the laundry out.”

The CIOs who identified, mentored and groomed CIO magazine’s 2009 Ones to Watch honorees (Read “Tomorrow’s Leaders“) are flat-out focused on developing the next generation of leaders (and the generation after that) while still meeting the myriad challenges of the modern-day IT department. And while there’s a lot of buzz about how to bring up Gen X or Gen Y (Read “Bringing Up Gen Y“), the IT leaders we spoke to believe that leadership development is leadership development and that focusing on age or any other differentiating factor is not productive.

“It’s simply a matter of priority,” says Amtrak CIO Ed Trainor, whose staff includes a Ones to Watch honoree. “You must make the investment or else you will lose the good people.”

CIOs should heed Trainor’s advice. Many aspiring CIOs are dissatisfied with their CIO’s approach to developing talent, according to an exclusive new survey by CIO magazine.

Fewer than half of respondents believe their CIO is “very committed” to developing internal leaders while 34 percent say their CIO is “somewhat committed.” In addition, more than half gave their IT bench a weak rating, which suggests a need for more leadership development by the CIO. The survey polled 90 aspiring IT leaders, 80 percent of whom are Gen Xers now working their way to the top.

Clearly, CIOs should carve out time to devote specifically to leadership development throughout their organization. “But there’s also a mind-set that has to change,” says Sobel-Lojeski, whose book, Leading the Virtual Workforce: How Great Leaders Transform Organizations in the 21st Century, publishes in August. “You must always be in leadership-development mode. You never know who may turn out to be the next leader.”

Smart CIOs see leadership development moments in even the mundane. “I try to take advantage of everyday events—problems or personnel issues—and turn them into real-time learning opportunities,” says Toyota CIO Barbra Cooper, who has two Ones to Watch honorees as direct reports. “I just never stop trying to be a leadership developer. I am thinking about it all the time.” Such coaching by senior staff is seen as a “very effective” form of training by 61 percent of would-be CIOs, according to our survey.

IT executives who make the effort to cultivate their up-and-comers reap results not just in the future but in the harried here and now. “Balancing competing demands is an important part of the job of any IT leader in a complex environment. I do everything I can to avoid the tyranny of the or,’ like you can have either peak productivity or learning and growth,” agrees American Red Cross SVP and CIO Mark Weischedel, whose organization also claims a Ones to Watch honoree. “I firmly believe that—on the whole and over time—you can have both. If people like and believe in what they’re doing, and are stimulated by new challenges, they’ll perform better.”

CIOs for Tomorrow

Today’s CIOs have to be a little clairvoyant, not only transforming their best and brightest managers into leaders, but also preparing them for challenges to come. The one bright spot in the torrent of bad economic news today is that it’s made reading those tea leaves a little easier.

Ones to Watch honoree Risa Fogel was former vice president of business relationship management at Realogy, the $4.7 billion parent company of real estate franchises Century 21 and Coldwell Banker whose revenues have sunk 27 percent since 2006. But Fogel, now senior managing director of business relationship management at Cushman & Wakefield, has a good handle on what she’ll face as a CIO in the next few years. Everything that today’s IT executives are confronted with—squared.

“Future CIOs will be challenged with many of the issues facing today’s leaders, but in the context of how to guide their business to recovery,” she says. “They will be particularly challenged with driving innovation. [But] encouraging new investment and risk taking will need to be carefully couched in terms of how it will deliver short- and long-term growth.” The successful 21st century CIO will deliver on multiple dimensions. “The CIO’s role will be to appropriately deliver innovative services that align with corporate strategy and to balance—in a cost- and risk-sensitive way—the work of inside staff and outside staff,” says McFarlan.

That’s just part of what CIOs must accomplish to make it today, says Weischedel, who took on the top IT job at the Red Cross last year. “Surviving and prospering as a CIO will require anticipation and agility like never before. Experience working in a diverse set of responsibilities, organizations, structures and situations is the best preparation,” says Weischedel, whose own career spans a half-dozen industries and situations ranging from aggressive growth to downsizing and divestiture. “Especially in times like these, drawing on past experiences makes a huge difference.”

Old-Fashioned Leadership Training

For all IT management’s increased complexity, some of the most rewarding leadership development experiences cited by tomorrow’s CIOs are tried and true.

Ones to Watch honoree Jeffrey Modell values his time at the Center for Creative Leadership. He took a CCL class, “The Looking Glass Experience,” which involved taking various assessment tests (e.g. Myers-Briggs, 360-degree reviews), a six-hour simulation of a stressful corporate situation and tons of feedback. Modell, who served as interim vice president of IT infrastructure at the Red Cross before moving to the International Monetary Fund as division chief of IT client services in April, used to avoid feedback for fear of a bad review. “I gained an appreciation of the value of feedback and introspection,” he says. Today he solicits feedback from his manager, employees and peers, provides feedback regularly to his own staff and coaches others on how to give and accept feedback. He has even sent his own staff to CCL classes.

Ones to Watch honoree Dee Waddell credits personal and business experiences along with management education (he has an MBA in strategic management and is working on a management doctorate) with helping him overcome his own weaknesses. “I have had deep experience in many of the areas I am leading, so I have no issues in rolling up the sleeves and taking action. The biggest challenge I have is sometimes I can move too fast and not ensure everyone is on the same page before moving forward,” says Waddell, Amtrak’s group information officer for marketing, sales and customer service. He learned the importance of collaborating with others through formal and informal meetings and regular check-ins as well as by following up with key constituents, even when his impulse is to barrel ahead.

At Toyota, Cooper encourages enrollment in executive MBA programs and has a career development plan for her staff that requires certain courses, conferences, speaking engagements and position rotations. She tailors the activities to the employee. Toyota honoree Zack Hicks came from the business side, so his focus was on gaining confidence and expertise with technology and technical staff. Toyota’s other honoree, Karen Nocket, had a solid IT background but needed to shed her geek image and get more business exposure.

Not all traditional leadership training must be bought and paid for—thankfully. Fogel attended executive management programs and the Society for Information Management’s regional leadership forum, which provided a strong foundation for working with the business. “Developing the ability to effectively communicate across all levels of the organization has been crucial to my success and is something I try to encourage for my staff,” she says.

While at Realogy, Fogel says she offered her staff “the ability to step into unfamiliar situations, using a lot of one-on-one coaching and immediate feedback.” She also used the company’s business challenges to talk about “the difficult decisions leaders must make to adjust to a changing environment.”

For all the formal management training Hicks has under his belt, he credits his one-on-one time with Toyota CIO Cooper as perhaps his most educational. “My strongest mentor and teacher has been Barbra. She’s got laser-beam-like insight into performance and corporate cultures, and she cuts through the B.S. with a machete. She gives strong, immediate and actionable feedback and insight,” says Hicks. “I try to do the same with my staff.”

Business Boot Camp

Amtrak’s Trainor is 65 years old. He’s been a CIO for 25 years at four companies in four different industries. He’s got an MBA with a specialty in information technology. But the best thing he ever did for his career, he says, was getting out of IT to spend some time in the business ranks.

It’s no secret that an understanding of and ability to work with the business is a key success factor for IT leaders. In fact, aspiring CIOs say they consider strategic and business-focused skills to be key in getting to the next level, according to our survey.

“[The lack of] a deep ability to understand, relate to and communicate with senior people outside of IT is where a lot of IT professionals have gotten themselves in trouble,” says McFarlan. But letting go of your best employees isn’t easy. After all, there’s a very real chance they may never return. But “the business” remains one of the best training grounds for IT leaders.

Ones to Watch honoree Kevin Cooke joined the Department of Energy right out of school, rising to associate CIO during a potentially contentious IT centralization effort. Communication and collaboration with the business units has led him to some early success. Naturally, Cooke wants to instill those same skills in his team. So he created an organizational development program with a budget for professional training, a focus on team- and communication-building exercises, and—most importantly—opportunities to cross-train in other departments. Dubbed “details,” these six-month to one-year assignments send IT employees to another DOE office or program temporarily.

During lean times, it can be difficult to give up even one prized employee for six months. But shorter-term business-IT exchanges can have lasting effects. “Earlier in my career at Realogy I had the opportunity to travel with my business customers, which helped me understand their business strategy and challenges,” says Cushman & Wakefield’s Fogel. “It [also] helped them develop confidence in my ability to help solve business problems.”

When Amtrak CIO Trainor brought Waddell in to interview for his role to help Trainor rehabilitate the department, he knew he needed someone capable of more than making the IT trains run on time. Waddell had been responsible for a business unit with revenues of nearly $3 billion and had held senior business and IT leadership positions, but Trainor wanted to check his business credentials with Waddell’s business partners, which was not unusual to do with a new hire. “He was very wise in having me interview with most of the senior business leaders I would be working with and supporting,” says Waddell. Since he hired Waddell, Trainor has asked him to work closely with the business, giving him the opportunity, as part of a combined marketing and IT team, to present to the board of directors in March.

When the Red Cross’s Modell was employed by the Washington Post, he worked closely with a vice president he was charged with supporting. She asked him to develop an IT road map for the business. But both quickly realized there was no clear business strategy on which to pin a technology plan. So together they built an IT-business strategy and a supporting IT road map. “I had always been a bit skeptical about the actual impact that the development of a vision could have,” admits Modell. “By seeing the entire team rally around the direction and by participating in decisions to adjust priorities and kill projects, I gained an appreciation for their value.”

At the Red Cross, he led his own leadership team with developing a mission, vision and road map. And while at the Post, he insisted on at least a full day each year in a business role. “There is great advantage to requiring all IT staff to [work] side-by-side with someone in the business,” says Modell, who once spent a night distributing newspapers to understand part of the Post’s business model.

Freedom to Fail

Some future leaders are easy to recognize. Amtrak’s Waddell achieved the rank of Eagle Scout by 13. He helped to set up an Internet-like computer messaging system when he was 14. He earned his real estate license at 18. And at 19, he licensed designs from his T-shirt business to a national, multimillion dollar company.

Still, Waddell insists he is a business and IT leader made, not born. And his most formative experiences have been, by most measures, failures.

After getting his MBA, he jumped at the chance to work with an Internet start-up at a Midwestern venture capital firm that went through an IPO, but eventually went out of business. “I find myself fortunate that I escaped without much harm, while learning that business is about bottom-line financial results—not the euphoria of high-growth website clicks,” Waddell says. He joined Motorola, leading the development of a Web-based product that would enable the equipment manufacturer to bypass wireless carriers and sell to consumers directly. That never happened. But Waddell racked up significant experience as a corporate director for a Fortune 50 company. Then it was on to United Airlines, where he helped lead development of a new joint venture in the customer loyalty space. But after less than a year, the venture’s partner panicked. United filed for Chapter 11 protection later that year. Waddell eventually left, but not before taking over the P&L for and developing a reputation for driving strong product strategy and delivering projects with significant benefits amid company turmoil.

Corporate failures were leadership-building exercises that helped Waddell deal with his current challenge—turning around an IT department at Amtrak, where the business loathed IT and had built up the shadow IT organizations to prove it. He credits his success in rebuilding the broken business-IT relationship partly to his boss. “A key factor is that [CIO] Ed [Trainor] has created a safe environment where I am not afraid to take calculated risks,” Waddell says. “When issues arise, he and I work together and focus on how to address and resolve them.”

Trainor manages the risk of giving key assignments to Waddell and his other top leaders through “training and mentoring, and moving them judiciously into more responsibility,” he says.

Hicks wasn’t the logical choice to turn around a Toyota dealer extranet project that was years late, millions of dollars over budget and lacked a business sponsor. But Hicks, since elevated to vice president of administrative services, turned out to be the man for a floundering project. CIO Barbra Cooper didn’t want just another IT project manager to take the wheel, so she took a chance on Hicks.

“Barbra liked that I didn’t approach this challenge with the technological solutions first. I approached it from a more management-science perspective—financials, people and process—versus relying on what the current Gantt chart said.” Hicks turned the project around with high satisfaction rates at headquarters.

Indeed, McFarlan says, giving budding leaders project management control of ever-larger programs is critical in preparing them to take over the top IT spot. Heading an enterprisewide project was cited by 77 percent of survey respondents as a “very effective” form of leadership training.

That can be trickier on the infrastructure side. Before Modell took on the customer support role at Red Cross, he focused solely on project management, strategy and software development. Two years ago, he decided to challenge himself and applied for an infrastructure role for which he had no experience. To his surprise, they gave him the reins of the 245-person group with a $30 million budget. “I appreciate that Mark [Weischedel] and the previous CIO took a risk and gave me this opportunity,” Modell says.

“In this position, I’ve been able to pull together all of my learnings and try them out on a larger scale.” Modell transformed the department from geographically to competency-based, drove a 66 percent reduction in average IT case closure time and a 96 percent decrease in case backlog, and led the development of an Information Technology Infrastructure Library (ITIL) incident-management process.

Weischedel says he can’t take a chance on just anyone. “There is a balance between show’ and grow’ in an assignment. Overextending someone’s responsibilities beyond their performance capabilities is risky and can be a setup for failure,” he says. “I don’t ever want to put someone in a job they can’t succeed in doing, so it’s always a judgment call.” Modell applied the experience to his own group at Red Cross. “As I’ve gained an understanding of my staff’s talents, I’ve looked for opportunities to stretch them,” he says.

That’s an area of difficulty for the DOE’s Cooke who knows his staff needs stretch assignments to grow. “In the past, I’ve been guilty of taking on too much personally and not delegating enough to my direct reports,” Cooke says. “While it may take more time initially to delegate to staff and guide them, in the long run it’s a win for all involved.” As his boss, Department of Energy CIO Tom Pyke says, “There is always a risk when delegating work, especially when stretching individuals beyond their past experience. [But] this is a key part of learning to be a manager in any area, including being a CIO.”

Pyke is trying to practice what he preaches with all of his staff, not just the standouts. “It’s always important to challenge individuals—all employees, not just those who have significant potential as future leaders,” says Pyke. “As these individuals grow, they learn to apply a similar model as they mentor others who are more junior than themselves.”

Stephanie Overby is a freelance writer based in Boston.