Building Technology Leadership in an Outsourcing Environment

January 10, 2013

The technology profession is at an interesting crossroads. More and more technology functions are being outsourced to either “nearshore” or offshore resources and this means that more and more of the junior management development roles for IT are moving outside of corporations. When companies had teams of developers inside the organization, there were often several choices when it came to selecting management talent for development and advancement. Now, most companies have relatively few internal resources to choose from and the depth of talent may not be as apparent. At the same time there are increasing demands put on IT staff to be strategic and to develop business focused application services that provide measurable value to the business.
 
So what is a CIO to do when looking to develop a succession plan and a stable technology leadership team?
 
  1. Recruit carefully. With fewer position available for development roles inside the organization it is imperative that CIO’s recruit individuals that have the talent to progress in the organization.
  2. Pay attention to business skills. Many IT roles are recruited on the basis of technical skills and this whole concept needs to be challenged. While an elegant technical solution to the problem may be great, unless it has value for the business it is a waste of resources. Many companies still insist on some detailed technical skills often at the cost of effective business skills and this is to the detriment of the organization.  Technical skills can be harnessed externally but the business skills need to be internal.
  3. Ramp up the development processes. Coaching and developing managers is hard to fit in, when everyone is doing their utmost to deliver to a critical deadline but it is critical.  Without the mentoring and training, both inside the organization and outside, any talent you have recruited may be squandered.
  4. Pay attention to outsourcing agreements. Many of the agreements may have “no recruit” clauses but those blanket agreements may not be the best for all concerned. This is sometimes the best talent pool for organizations to recruit from; the people understand the business and the dynamics that drive the decisions. It is best to create an exception clause for recruiting talent from outsourcing suppliers, particularly when that may be over 50% of your headcount.
  5. Use an “Up or Out” philosophy. If people in key roles are not developing and not stepping up to the leadership challenge then it is time to make changes. Frank discussions are hard but need to occur. You have precious few development roles so use them wisely and don’t allow deadwood to take up valuable development resources when you know the outcome.
 
If the technology function is to continue to produce strong senior executives it will take more and more effort in an environment that increasingly relies on outsourcing. 

About the Author.

Paul Hudson is a Partner with StoneWood Group Inc. a leading Canadian executive search firm. Over the past 16 years he has helped organizations identify and select senior managers.

Contact Paul by email at phudson@stonewoodgroup.com or call 416-365-9494 x 222