Analysis: How does the CIO become the CEO?

A CIO or IT manager who dreams of becoming chief executive has a better shot than was the case five years ago, says Andy McCue. But moving up the corporate ladder won't necessarily be easy.

The appointment of IT guy David Yu as CEO of online betting exchange Betfair is evidence that CIOs are becoming equipped with the right skills and commercial savvy to challenge the finance and sales directors for the top job in the company.

That's not to say the image of the IT boss as a commercially naive, sandal-wearing nerd doesn't still exist in many boardrooms but there are signs the old joke of CIO standing for 'career is over' is slowly disappearing.

A study of UK blue chip corporations five years ago by Robina Chatham, then a Cranfield School of Management expert, found that just 11 IT executives had progressed beyond the server room to either a wider general management or CEO position at their company.

That statistic represented something of a low point in the evolution of the IT director and CIO role, a time when boardrooms lost faith in IT after spending vast amounts on Y2K and anything preceded by an 'e' during the dot-com boom.

But things have been slowly changing since then with more CIOs progressing further up the corporate ladder, according to Cathy Holley, partner at headhunting firm Boyden UK.

She told silicon.com: "More recently that number has increased significantly and we're talking proper blue-chip organisations not diddly-squat software companies."

One of the factors Holley points to that has tipped the balance of power in favour of CIOs is the increasing dependency of businesses on technology.

She said: "The demands on CIOs are exactly similar to what is required as a CEO. Boards think it is unusual to promote a CIO to CEO but it shouldn't be. CIOs are the only ones with a helicopter view of the business and they have a great deal of operational experience of the business."

Commercial savvy has always been an issue for CIOs but Holley argues that IT execs are better at this than many of their boardroom colleagues because of their experience managing the IT budget - usually the largest in the company - which requires negotiating and dealing with a wide range of partners and suppliers.

She said: "The CFO, who is most likely to become your CEO, knows bugger-all about sales and marketing or anything about innovation and creativity."

This isn't to say that boardrooms are lining up to appoint the CIO as a successor to the CEO, and there are skills and attributes that IT execs still need to work hard at acquiring and improving.

Betfair's Yu, speaking to silicon.com in an interview last year on the transition from the technology-focused CTO position to a wider operating COO role, said the "soft skills" are one of the biggest challenges.

He said: "It was harder than I thought. It's much harder to provide a great customer service than I would have ever realised. It's much more art than science in some of these other areas and not just about the facts but about how you are conveying them. It's the softer skills in dealing with other groups."

Yu also warned of the dangers of automatically pushing good IT people into senior management positions.

He said: "Actually by promoting them into a management position you have two negatives - you have a less skilled manager and you've lost a great engineer."

Boyden's Holley also said CIOs sometimes have a slightly over-inflated view of themselves in terms of sales and marketing skills.

She said: "Often when they leave their post they join vendors in a sales or marketing role and they think it's going to be easy but they rarely last more than five minutes."

Skills she believes CIOs need to work on if they have any ambitions of progressing to CEO are influencing, stakeholder management, "real" leadership - not just managing people - and strategic thinking and commercial intuition.

But Holley said the good CIOs she now interviews are the equal, if not better, of many of their boardroom colleagues in terms of leadership and their knowledge of the business.

Plus: Read our leader on whether CIOs are ready to run the company.