Author: Yogi Schulz
CIOs have one of the highest turnover rates of any executive profession. According to Deloitte Consulting’s 1998 Global Survey of Chief Information Executives, almost 18% of the CIOs leave their jobs every year. That’s nearly twice as often as the people in the organizations CIOs manage.
While the numbers are indeed frightening, most of the time they can be lessened by dealing with the symptoms before the disease becomes terminal.
Gregg Schmidtetter, senior manager of IT services in Deloitte Consulting’s Pittsburgh office, says CIOs can follow industry best practices to avoid the common pitfalls of this dangerous job. Some of these practices include managing expectations from inception to implementation, getting end-users and high-level executives involved in the design and training, and running the IT department like a business unto itself – with all of its particular staffing funding quirks.
But every once in a while, something foes wrong and the unthinkable happens. The business changes, the market shifts, the technology doesn’t deliver. Someone, eventually has to take the fall. Says Schmidtetter, “The business may have just spent manymillions of dollars implementing a specific technology solution and they may have inflated expectations about how quickly it was going to return results.” The CIO is a sitting duck.”They are not going to go back and pull out the technology and give the CIO a big high-five.” More often than not, the technology stays, the CIO’s head rolls and someone new is brought in. It’s a process some call the Death March.
The Death March begins long before anyone realizes it’s underway. Frequently the start occurs in an organization that wants to pursue an ambitious business plan for growth. Often the business plan is highly dependent on a new product roll-out that in turn is heavily dependent on successful IT projects. Typically, the supporting IT projects include some mix of web-based order entry, ERP, call center and technical design systems.
In its enthusiasm, the organization approves spending for major IT projects. The approved amount is invariably more than the IS department can intelligently spend given available staff and skills. No one notices this problem in the midst of the euphoria.
Sometime later, the bean counters review the financial forecast. The revised projected net income for the year is embarrassingly less than what the CEO has promised Bay Street. Panic races through the organization.
Now the cost overrun on product roll-out must be made up somewhere else. Selected staff are laid off (right-sized in more politically acceptable parlance). The right-sized staff are the first casualties of the Death March.
The IT projects are the most visible parts of the spending plan. Slashing these projects offer the most promising opportunity to bring the net income forecast back into line. The IS department is pummeled to cut its cost estimates. There’s no mention of the fact that risks have increased significantly as a result of the cuts.
Denial of Resources
With reduced cost estimates, the IS department can no longer afford to hire the contract staff needed to complete the projects reasonably on schedule. The right-sized business departments, who were heavily involved in analysis and testing, can no longer meet their resource commitments to the projects.
Work slows but everyone maintains an optimistic demeanor. The Death March accelerates.
The net income projection is still wobbly. Management institutes a salary cut. Morale deteriorates. Work slows a little more. Smiles are less frequent. Many of the IS staff are now listening to phone calls from headhunters that were previously ignored.
The headhunters bag a few techies with promises of Java, more money and lower taxes in the U. S. They become the next casualties of the Death March. News of the resignations spreads like wildfire. Now the headhunters are receiving inquiries. Smiles are non-existent.
The under-staffed IS department can’t fix the cracks in the infrastructure fast enough. System availability goes down. With the absence of key staff members, progress on the projects is almost imperceptible.
The Roof Caves In
The strain builds until the roof caves in. A major IT project is pronounced dead and is canceled. The canceled project is the next victim of the Death March.
Looking for a Scapegoat
Someone has to take the blame for this fiasco. The competent, but politically inept CIO is seen as the ideal candidate by the other members of the management team. Even though the blame is probably quite evenly distributed, the CIO is conveniently anointed the scapegoat. The others would just as soon keep their cushy positions, thank you very much. The CIO is the next casualty of the Death March.
Grasping for any Solution
It feels good to have sent the nerdy CIO packing. Wait a minute. The good feeling lasted but a moment. The fundamental problem is still very much alive and may be growing. What to do now? The remaining management team looks at each other with bewilderment.
How about hiring a headhunter to find a new CIO? Is there anyone out there who could be enticed to take the job?
How about outsourcing? Wasn’t there an enRoute article extolling the virtues of outsourcing on the flight home to Toronto? Who wrote that article? Was it DMR, IBM, IRM, ISM, SHL or Andersen Consulting?
The New World
The meeting to review the outsourcing proposal goes very badly. The realistic cost associated with operating the IT infrastructure and delivering the projects chokes up the management team. The potential outsourcer is the next casualty of the Death March.
A headhunter is engaged. The headhunter positions the role as a turnaround opportunity that would look good on anyone’s resume. A new CIO is enticed to join the organization with a hefty salary, an attractive bonus and lucrative stock options.
A few months later, the new CIO approaches management with the unwelcome message that you can’t get there from here without significant additional resources. By now the management team has heard the message from enough independent sources that it gives the go-ahead to spend the money on a reduced set of projects with a cautious schedule.
If you’re an unwilling participant in a Death March, you had better spruce up your resume and accelerate your networking now.