by Kim S. Nash

One in Four CIOs Fired for Performance

Mar 11, 20092 mins

Poor performance puts the CIO's job on the line, says a new survey. But there are ways to avoid that fate.

Perhaps we can’t retire the old saw that “CIO” stands for “career is over” just yet.

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What It Takes to Succeed Now as a CIO

Nearly one in four CIOs gets let go for poor performance, according to a new survey by CIO and Human Resource Executive. When asked why their companies’ previous IT leader left, 23 percent of the 265 human resources managers polled said it was involuntary for performance reasons. The dismissal rate matched that for CFOs but was higher than that for HR managers (19 percent) and sales managers (18 percent), the survey found.

Reason Top IT Executive Left Company by Function

IT heads are the most likely among business leaders to leave their positions on their own terms to pursue career opportunities elsewhere.

IS (148) HR (168) FINANCE (183) MFTG. (40) SALES (90)
Left voluntarily to pursue career opportunities elsewhere 40% 33% 29% 22% 35%
Left involuntarily due to performance 23% 19% 23% 8% 18%
Retired 11% 23% 20% 32% 16%
Promoted internally 10% 8% 12% 22% 16%
Left involuntarily due to restructuring / downsizing 5% 4% 3% 5% 3%
Left involuntarily due to misconduct 1% 3% 4% 0% 2%
Other 9% 11% 8% 10% 10%

And the bigger the company, the more likely the CIO will be dismissed—either fired or a victim of downsizing: 43 percent of IT heads at companies over $1 billion or more in sales left involuntarily, versus 29 percent at mid-market companies of $100 million to $1 billion and 23 percent at small companies of less than $100 million in sales. Of course, “poor performance” is open to interpretation, notes Greg Ambrose, president of Catalyst Search Group. “What a new CEO defines as poor might be exactly what the old CEO wanted,” he says. The larger the organization, the more complex the issues, systems and politics, he adds.

One Out of Four CIOs Fired For Performance

Twenty-three per cent of IT heads are fired for poor performance, according to the HR executives we surveyed. CIOs at large companies are more likely to be fired or to become victims of downsizing; 43 percent of large company IT heads left involuntarily, versus 23 percent of small company CIOs and 29 percent of mid-market CIOs. Small and mid-market IT heads are more likely than their large company counterparts to leave in pursuit of other opportunities.

Reason Top IT Executive Left Company by Revenue Total (148) $100 Mil-$999.9 Mil (69) $1 Billion+ (37)
Left voluntarily to pursue career opportunities elsewhere 40% 47% 45% 24%
Left involuntarily due to performance 23% 23% 23% 30%
Left voluntarily to pursue career opportunities elsewhere 40% 47% 45% 24%
Left involuntarily due to performance 23% 23% 23% 30%
Left voluntarily to pursue career opportunities elsewhere 40% 47% 45% 24%
Left involuntarily due to misconduct 1% 0% 0% 5%
Other 9% 7% 10% 8%

Taking into account the many reasons someone leaves a job—including taking a new position or retiring—the turnover rate among CIOs is about the same as for other senior executives, the survey says. CIO tenure is six years and three months, the same as for heads of sales but less than HR heads (six years, four months) and CFOs (seven years).

Delta Dental parted with its CIO three years ago when he “left to pursue other interests,” says Ed Zobeck, executive vice president of HR, operations, integration and facilities at the $2.3 billion dental plan group. Now the position has been eliminated. Then-CFO Laura Czelada took over IT while Delta sought a replacement, says Zobeck. She “did such a good job she retained the responsibility,” he says. “We promoted someone to a vice president of IT position and they report to her.” Delta Dental’s former CIO could not be reached for comment. But still: Replaced by a CFO? We shudder on behalf of CIOs everywhere.

CIO Job Security Shows Some Cracks

While CIOs have been in their current jobs an average of 6 years, 4 months, almost a quarter of CIOs will be fired for performance reasons.

Tenure of Current Dept. Head by Company Size (in years) All Companies $100 Mil-$999.9 Mil $1 Billion+
Human Resources 6.4 6.9 6.7 5.0
Information Systems 6.3 6.5 6.5 6.2
Finance 7.0 8.1 6.4 6.7
Manufacturing 6.6 n/a n/a n/a
Sales 6.3 6.3 6.2 6.1

It’s not that CIOs are easily expended, says Jeff Shuman, vice president of HR and corporate relations at Harris, a $5.3 billion government contractor. But sometimes, the position evolves and the executive doesn’t, he says. To avoid this fate, know what kind of CIO your company expects you to be, he says. “When you shift IT from a cost center or service function to more of a business focus with a profit and loss responsibility, it takes very different skills,” he says. “Depending on the individual, their interest and success could change.” Harris CIO William Miller has been in the job for nearly a decade.

“He’s been able to grow with the position,” Shuman says.

One way to longevity is to continually educate yourself and gather new ideas from outside business leaders, says Will Kuchta, vice president of organizational development at Paychex. Vice president of IT Dan Canzano has held the post for 16 years. Kuchta says managers tend to do well at the $2 billion payroll and HR administrative services company if they display fresh thinking and a positive attitude. “We’re a service company,” he says. “We hire for attitude.”