by Vawn Himmelsbach

Are You ‘Too Canadian’ to Be a CIO?

Nov 05, 2009

Canadian companies are increasingly asking headhunters to look outside its borders -- specifically to the U.S. -- for new IT leaders.

For headhunter firms, CIOs like Joseph Cooper are a catch.

The executive vice-president and CIO of Manulife Financial since 2007, Cooper is originally from Toronto and worked 27 years at IBM. More than half of that time had him based internationally, including a five-year stint in the U.S. “I have Canada in my roots and was thrilled to come back and be the global CIO for a large Canadian multinational,” he said. “One of the key benefits of my past experience coming into this job was the international knowledge I had. When I was at IBM, I had the opportunity to work with insurers in all parts of the world, so I got to see how insurers delivered technology and services related to that.”

That skill set is becoming increasingly relevant in a global economy. Especially since some of the top CIO jobs that have recently come available in Canada have gone to Americans. Headhunter firms say they are increasingly asked to look beyond our borders for IT talent. Companies as diverse as TD Bank, Loblaws and Rogers have all recently hired American CIOs. BMO recently conducted a search that took it to the U.S. Although it ended up going with an internal candidate, RBC also looked to the States for a leader.

With the rising loonie and relative stability of the financial market in Canada compared to the U.S. and U.K., the attraction of Canadian opportunities to candidates outside of Canada has become much higher — and has resonated with recent hires. The concern, according to some in the industry, is that in two years when the economy picks up, those CIOs will get homesick and leave.

And unfortunately, the reverse may not be true. Right now it may be more difficult for Canadians to work in the U.S. than it is for Americans to work in Canada, said Andrew Dillane, group CIO of Randstad Canada Companies and president of the CIO Association of Canada. Aside from immigration challenges, the tumultuous state of the U.S. economy has resulted in a high unemployment rate, and organizations there will be more apt to look for Americans to fill those roles.

It also means Americans may be more likely to look for job opportunities in other countries, even though there are some differences in the two markets, such as a requirement for bilingualism in some Canadian organizations. But the U.S. is a much bigger market, he said, so they’re more likely to have experience working with much larger organizations with much larger IT infrastructures.

But it’s naïve to believe that large Canadian organizations — many of which are global in nature — won’t look across the border, or around the world, to find the best candidate for the job. International experience, whether U.S. or abroad, is becoming increasingly important in an IT capacity. Without that experience, are Canadians missing out? If so, what can they do?

While there are no statistics to prove hiring American CIOs is becoming a trend, it’s safe to say clients are looking for the best-in-class candidate, no matter where that candidate happens to be located. And that means they’re conducting more North American searches, even if they end up hiring a Canadian or internal candidate, said John Mealia, senior client partner for technology with Korn/Ferry’s Toronto office. “Canada has some outstanding technology execs and could compete — and do compete — very well for senior roles, but clients absolutely want the screen across North America now.”

Part of the reason is because American CIOs can bring a unique skill set to the table. The banks in the U.S., for example, operate on a much larger scale, with thousands of retail locations. Many American CIOs have also had exposure to mergers and acquisitions, particularly in the financial services industry, where they’ve had to integrate retail systems, wealth management systems and client information files. We have six big banks in Canada, and we’ve only seen one merger — the union of TD-Canada Trust several years ago.

For Canadian firms looking to expand their operations into the U.S. or beyond, that can be seen as a valuable opportunity. In Canada, three of the big banks — TD, RBC and BMO — have U.S. strategies. TD owns Banknorth (serving the northeast U.S.), RBC owns RBC Bank, formerly known as RBC Centura (serving southeast U.S.) and BMO owns Harris Bank (headquartered in Chicago), which grew through acquiring community banks. “If that was something they wanted to pursue more aggressively, then the experience the U.S. CIO would bring to the table would be an asset,” said Mealia.

think globally

While many line-of-business execs get the opportunity to work outside of Canada and gain that skill set, that doesn’t seem to happen as often in IT. And that, Mealia said, might handicap an internal candidate when the CIO role opens up.

“Clients are increasingly asking us to look outside the border,” said Rose Baker, a partner with Heidrick & Struggles. “The depth of talent within the market as organizations are trying to expand doesn’t necessarily exist in Canada, so we’ve seen a number of companies quite specifically ask us to conduct searches and look into talent in the U.S. and sometimes the U.K. As a global firm we do that in every search, but organizations are being more vocal about that interest.”

Valerie Spriet, a partner with Egon Zehnder who works in the global CIO practice, says about 90 per cent of searches for large publicly traded companies are multi-market — not just the U.S. “We’ve brought people from Europe and Asia-Pac to Canada,” she said. “Large Canadian banks and insurance companies are increasingly looking international in their business plans and therefore have a desire to have that skill set internally.”

Almost all searches are now looking for a certain kind of candidate: one that is Canadian, but happens to be working abroad and has an interest in moving back long-term. While it’s much smaller than the general talent pool, it’s not insignificant, and there are enough people to make it a relevant consideration, said Rashid Wastie, a partner with Egon Zehnder. Often these candidates have started their career in Canada working for a multinational company and within a few years relocated with that company to another part of the world to seek broader opportunities. Manulife Financial’s Cooper is one such candidate, but if they can’t find someone like him, many organizations will consider bringing in an American.

If a company has global operations, then understanding how to work across an international footprint is highly relevant, said Kelvin Cantafio, who worked in some 60 countries as IT director and CIO with Plan International, one of the world’s largest child-centred development organizations, and is now vice-chair of NetHope and president of the Ontario chapter of the CIO Association of Canada.

“The entire economy has changed,” he said. “While most of our trade used to go north-south, that’s changing. If we’re looking at new markets, we have to think in a new way, we have to look around the world, not north-south.” But there’s a big difference between hiring someone based in the U.S. who works with people in other countries and someone who actually lives and works abroad in order to understand the cultures in those countries and ultimately create new markets for Canada.

“I wonder sometimes whether there’s a perception that because someone is coming from the U.S. they have more global experience than Canada,” said Cantafio. Regardless of what that perception might be, companies are looking for that experience in their search for a new CIO: If they want to expand in, say, Africa or China, they want someone with relevant exposure to or knowledge of those cultures and markets. And the CIO has to understand the rules of those cultures and markets, he said, not just those imposed by the organization.

He sees a need to forge alliances and work more closely with Europe and other regions. “Perhaps having people in Canadian companies that are more aware of the international community will help us to expand and not have all our eggs in one basket.”

know your vertical

Spriet said sector experience is also becoming increasingly important. If you’re a large retailer in Canada, for example, the talent pool is limited, because there are only so many CIOs of large Canadian retailers. In one case, the firm did a search for a major Canadian retailer to find a CIO and ended up recruiting someone from Europe — not for international experience, but for deep retail experience.

Ian Banks, vice-president of global IT at PMC-Sierra and president of the Vancouver chapter of the CIO Association of Canada, pointed out that the CIO role is less technical in nature now, and there’s a tighter alignment with business and strategy, which means the CIO needs to be able to contribute around the executive table. As a result, many companies are hiring CIOs based more on industry experience and less on senior technical skills. “We have a small number of large Canadian organizations and they’re trying to hire a different type of CIO — someone who has more industry experience,” said Banks. “They look across Canada and there are very few peers here, so they have to look to the U.S. or other larger markets.” And with the Canadian dollar appreciating in value, it’s a lot easier to recruit top talent from the U.S. “With the 70-cent dollar, it was totally different.”

Get moving

Another draw to hiring Americans, especially during a recession (since talent is available that normally wouldn’t be) is that they’re simply more moveable. “I’ve been at this since 1993 and it’s amazing how Americans just move — it’s part of their DNA,” said Mealia. “They recognize the need to do that for their career, both within IT and outside of IT.” Because of the rising loonie and positive reputation of the Canadian banking system, jobs north of the border are looking pretty attractive right now.

On the other hand, from what he’s seen, Canadians are less apt to move south of the border to take on a CIO role. “There are great opportunities for Canadian IT execs south of the border — the Canadian banks have lines of businesses and they’re big and they’re complex, so that skill set would be coveted south of the border,” said Mealia. “But I don’t think Canadians want to move. I’ve talked to a number of senior execs here that would ideally like to make a career move but they don’t want to move south.” That means if you’re a senior IT exec at a bank, there are precious few places for you to climb the corporate ladder.

act locally

There are still plenty of advantages to hiring locally. Some Canadian organizations are good at growing talent from within, so many senior positions are occupied by people who’ve grown up in that organization. But when an organization is not accustomed to bringing in senior people from the outside, that poses its own challenges. That person offers different experiences and a different way of thinking, but on the other hand there may soft arrangements going on in the background as to how decisions are made. That can be a challenge for a new person coming into an organization that has its own culture.

There is also a downside to recruiting from outside of Canada, and that’s the long-term stickiness of the candidate. “Quite often they may be looking at the CIO stint as a stepping stone on a broader career path because they don’t have inherent connections to Canada,” said Spriet. “So it’s harder to maintain them as part of your talent pool over the long-term.” Some clients have tried recruiting Americans but lost them after three to five years, so are now specifically looking for Canadian candidates.

Banks is an example of a Canadian who runs the IT department of an American company. He’s lived in B.C. all his life and continues to have a thriving career, since PMC has significant operations in Canada. It also has offices around the world, including India, Israel and China, and part of the reason he joined the company was to gain international experience that he didn’t have previously.

“We have to recognize in Canada, our economy is fairly small — it’s the size of California,” he said. “When you look at the number of larger companies that would qualify as Fortune 500 by American standards, that number gets very small in Canada.”

But are there the same opportunities for Canadians in the U.S.? “In my experience the U.S. seems to have a perception of Canada that it’s small potatoes and moves at a different pace than they would like,” he said. “Usually it’s a misconception, but that does exist, and for some companies, when they’re recruiting, they’ll discount Canadians pretty quickly because of that.” He would argue the opposite is true, that European and Asian companies look at Canadian candidates favourably because they see them as being more culturally sensitive.

Canadian CIOs have a lot to bring to the table, according to the recruiters. The cultural style of Canadian leaders tends to be more adaptable and collaborative, and that’s how they’re perceived in global firms, said David Boehmer, a partner with Heidrick & Struggles. But while there’s an appreciation for the potential of Canadian leadership, the one gap is that a lot of these individuals have been in one organization — typically domestic — most of their career. And global firms are looking for on-the-ground global experience.

That means if you’re a Canadian CIO, you’re not just competing with people in your own city or province anymore. Especially in large, complex organizations, the net is being cast wider for potential candidates. “If we aren’t getting [that global experience] in Canada, then we need to start casting our net wider in terms of managing our own careers, looking at getting experience with a multinational that has headquarters in the U.S. or maybe in Europe,” said Banks. That’s something he’s managed to do with his own career, while basing himself in Vancouver — a city that doesn’t have a huge CIO community.

Cooper believes what we’re seeing now is the result of a North American employment market. “We just hired a global chief technology officer,” he said. “We ended up hiring a Canadian, but our search took us to the U.S. where we interviewed people from New York and Chicago. Here at Manulife, because of our international footprint, it’s core to what we want to do.” Within IT he expects to see much more movement across divisions and geographies — in fact, this is becoming part of the firm’s formal talent management program, allowing employees to get that international experience. All recent hires of senior IT execs have had some degree of international experience. Other Canadian enterprises should consider doing the same thing.

“With the U.S. economy being 10 times larger than ours, we’ll start to see perhaps more U.S.-based CIOs placed in jobs in Canada, but it doesn’t mean that Canadians won’t be placed in the U.S.,” said Cooper.

Even if Canadians are being pitted against Americans for jobs, it’s a fundamentally different job market — they’re different cultures, with different service-delivery platforms. Ultimately, to stay competitive in this expanding talent pool, it may mean learning how to navigate both worlds.