Washington, D.C.
October 14-16, 1998

Confronting the Challenges of the Digital Era

Challenges in Recruiting for a Chief Information Officer
Jerry Baker, Partner
Baker, Parker and Associates

Good afternoon, ladies and gentlemen. I am delighted to have the chance to visit with you and to share some thoughts from the executive recruitment perspective on the issues that face all of you in the days that lie ahead. When your representative called to ask if I would participate, I was quick to point out that I have had no experience, zero, recruiting directors of libraries. I have been in and around the function and ran a book store once, if that counted. But it had acid paper, and it all disappeared.

(Laughter.)

But I did point out that I have had some good experience in recent years of working in the academic community and specifically in representing a number of institutions in recruiting what we have come to call the Chief Information Officer. As Paul said, I’ve now done a 175 searches in higher education. I was pleased to look at your membership list and see that 27 of your institutions are clients of mine, and I have done the CIO search at nine of your institutions.

The perspective I bring, therefore, is that of an executive search consultant who has devoted a good bit of time and energy in recent years to the world of higher education, with a subset of that being information technology. Let me make an opening comment that the information management activities that all of you are in are some of the most critical leadership positions we are facing today.

You are absolutely central and essential to all that is going on whether it be the research, the teaching or the service mission, those of you who are involved in information are critical to all that we do. I will also say that we think about the difficulties of recruiting the information executive and the information technology leader as the most difficult arena of executive recruitment today.

Whether that be for the corporate community or the academic community, this field stands alone as the one causing most of us sleepless nights and worrying about how to go forward. The searches are taking longer. The number of candidates are very few. Compensations are skyrocketing, and once on the job, the people don’t stay very long. We’re finding that those in information technology positions at the junior level are often gone in 12 to 18 months.

Even the CIO is often gone in three to four years. I want to talk about who you are and what you do. And I want to share several issues with you that I find on the campuses around the country where I spend a good bit of time. First, is a definition. What is a chief information officer? What is a chief information technology officer? This is a debate that I find going on all over the country. Who is responsible for information at your university?

Indeed, what is information? I’m finding some of the most lively debates, arguments and disagreements coming around the issue of the relationship between the director of libraries, the vice provost of libraries and this other position called vice president, vice provost or director of information technology. Is this one position or is it two separate and distinct positions? As the director of libraries, are you responsible for information?

I would say yes, you are, and I would even suggest that we change the title of your other position on the campus to call him or her the chief technology officer.

(Applause.)

Thank you. I think it’s obvious, and it really is extraordinarily sensitive that the working relationship between those of you who are directors of libraries and the director of technology, the chief technology officer, must intensify. I am seeing extraordinary cultural difference. I am seeing significant turf issues evolving, and I am seeing presidents, provosts and chief financial officers having to be referees as they stand in the middle and attempt to get the two sides to talk to each other.

A critical issue facing you has to do with budget and staffing. One of our large universities in this country represented in your body now has in its information technology organization 1,000 employees and a budget this year of $120 million dollars. Do any of you have a $120 million dollar budget as directors of libraries? That is what we’re facing, and that’s a very real number, because I placed a CIO at that university.

The budgets are not going to get smaller. The number of employees is not going to be reduced. Therefore, you find yourself competing for those employees and for those budgetary amounts. I point out what is obvious to those of you who live this day-to-day, but one of the issues I am encouraging presidents, provosts and boards to think about is this issue of budgetary wealth that has to be shared but is being shared perhaps a bit too generously with those on the technology side.

Another issue that we are finding on many campuses in our search work is that of the reporting relationship. To whom should these positions report? One could argue that the chief information officer is closer aligned with the academic and scholarly mission of any university. Therefore, it should obviously report to the provost, the chief academic officer. One could also say that this position is responsible for financial and administrative systems.

Therefore, perhaps it should report to the chief financial officer. There are those who would say that this position, these positions, affect everything that goes on, so why not report to the president? What we are finding is that this position of chief technology officer continues on most campuses to report to the provost. I finished a search recently, though, for one of our distinguished ivy league schools where the position does report jointly to the provost and the chief financial officer, driving him crazy, I can assure you.

And there are those cases where the position now does report to the president. What we are finding, and I am sure many of you are facing this on your own campus, is the question of is it now time to think more seriously about combining these two positions into one? Should we have someone who is a chief information and chief technology officer who would be an officer of the university reporting directly to the president, sitting as an executive officer and being involved in cabinet-wide issues?

I’m sure each of you has a fairly strong reaction to that, one way or the other. But, as I will mention in a moment, that is an issue that I suspect we are going to have to address in a very clear way fairly quickly. Another issue we are facing which will not surprise you is that of the skyrocketing compensation of those in information technology, particularly the chief technology officer position.

As I am sure you see and read, the person who holds this position is now generally among the highest paid on many campuses, at least those campuses without medical schools. These positions aren’t quite up to the cardio thoracic surgeons, but they’re getting close. I did a search recently for a position at one of our public universities in the mid-west, a mid- to modest sized institution, but a good one. They had concluded that they would make it a vice presidency reporting to the president, and the compensation they offered was right below the combined salary of the president and the provost. That’s what we are facing.

What does that really mean? The chief technology officer at many of our major universities now has compensations generally in the $250- to $300,000 range, and it’s going up as we speak. The vice president of information technology at a Fortune 500 company has a compensation three to four times that. We are involved in a search for a Fortune 500 company for that very job. We are offering over a million dollars, and we are having a very difficult time finding candidates.

The other piece to the competitive issue of compensation has to do with the large consulting firms. As many of you are aware, the McKenzie and Andersen Consulting and other large firms intensely recruit young MBA’s. McKenzie and Company happens to be a client of mine, and they are now starting young MBA’s with any understanding of information technology at $150,000 right off the campus.

So when we talk about recruiting at the junior level or the senior level, you can see the environment in which we now find ourselves. Therefore, the poignant question is how do we identify, recruit and keep information technology professionals? What does higher education need to do to be competitive, to name some depth of strength and competitiveness in the area.

My conclusion as one who has done this for a while is that we are at a point of extraordinary shortage—actually approaching a crisis level—of qualified men and women to be the chief information technology officer from within higher education. There is a very small cadre of men and women who are technically competent, managerially qualified and interested in doing this job. All three of those are critical, and the last one probably the most important.

We are finding that those who have the technical competency, the managerial strength want to stay away from the broad activities of being responsible for the vision of a university. I find that in many of my searches in higher education. One reaches a certain point of recognition and stature because of teaching and research. Why do I want to mess that up and go be a dean or go be a provost.

We’re finding the same thing in information technology, those who enjoy taking computers apart and writing software have no interest in thinking strategically about the vision of the future. We have had to come to a conclusion in my firm, and I know many of my colleagues and other search firms are doing the same thing, being very cautious about even beginning searches for a CIO position based on the reality of the marketplace.

And in the past weeks, we have declined several, because the client could not be competitive from a compensation point of view and was unrealistic in expectations. When we start a CIO search, we tell a college president, we will do our best to present three candidates. I do a dean of arts and science search as I did at Johns Hopkins, and we present 40 candidates. But in the information technology world, it’s very narrow. It’s very focused, and that will not change. I have one client who said if you can bring me two candidates, that will be acceptable. We know the marketplace is that traumatic.

I want to ask you in closing to think about who you are. As I have shared with several presidents recently, I really do believe that those of you who are responsible for information are going to be called upon to expand your accountabilities within your university.

I see that the director of libraries is a position that is going to have a definition that can, will and perhaps should expand over the future. I see the opportunity for those of you here again, if interested, to move into broader positions of responsibility to become to some extent partially information and technology.

You may be allergic to the word “technology.” It may be the extent of your vocabulary, but I think part of what we’re going to have to think about is the expansion of responsibilities of those of you in these positions to include some broader technology activities. The other suggestion I am making to you is that we are going to have to be more open to going outside higher education and into the corporate community for leadership.

I have only a few searches in my academic work where we have brought someone from the corporate environment to the academic community. All have worked well in transition from someone who has spent an entire career in the corporate environment. I think I have become convinced that a corporate executive’s definition of shared governance is that I will share the decision with those governed after I make it.

(Laughter.)

There is, indeed, a cultural transition that will have to occur, but I see one of our obligations and indeed necessity is to look more carefully at those from the corporate environment. The other observation I make is not surprising, and this will affect those involved in Human Resource. We are going to have to restructure compensation programs for those of you in information and information management. I am seeing this happening generally but specifically in these kinds of searches. We're going to need to think about hiring bonuses. We’re going to need to think seriously about significant annual increases in compensation, not three or four percent, but ten or twelve percent. We’re going to need to think carefully about annual incentive programs.

We’re going to need to encourage and allow external consulting time, and we’re going to need to build a long term incentive program. That’s all very corporate. I know that. But I don’t know any other way that we’re going to address the problem. I spent the weekend negotiating the final package for a presidential search I’m doing. In addition to some very aggressive ingredients, we put in a clause that if he stays five years, we will give him an additional $100,000 at the end of five years just to keep presidents in place. So we are going to need to do some things that are unheard of in higher education. What I am seeing which will perhaps help this happen is that more and more governing boards, boards of trustees, boards of regents are actively involved and very interested in information technology.

That will facilitate and perhaps encourage your president, your provost and your deans to understand what we face in this terribly critical time. I applaud what you do. I encourage you to begin to think more expansively. Think about what it means to be a chief information officer, and think about what it means to be a chief technology officer. Perhaps never the two shall meet. I don’t know, but I think that is one strategy we must think about.

I’m delighted to have the chance to share my thoughts with you. Thank you.

(Applause.)

MR. KOBULNICKY: Now, we’ll have Mary Opperman talk a little bit about the jobs that we have in our institutions. Mary.