If you know where to look and you take a strategic approach to creating a pipeline of IT talent, you will have many options for filling your management bench.
The next generation of IT leadership is hiding right in front of you. Do you know how to tap into it?
An often-debated but never-resolved question in the world of IT outsourcing is “where will our next generation of leaders come from?” Strangely enough, it’s usually the very executives who are now outsourcing in record numbers who ask the question. And they have a point. It’s difficult to see how enterprises are building management bench strength to lead the corporate IT departments of the future.
The issue, in my view, is framed the wrong way. While outsourcing is part of the talent problem for corporations, it is also part of the solution. And, yet, the talent problem is very real; there isn’t a single CIO in my network of clients who doesn’t wish for greater access to talent.
Why is this happening? Three reasons:
- Corporate IT is not sexy. In my generation, IT was an attractive career. We knew the Internet would shake things up, and corporations had big appetites—and big dollars—for people who could implement and manage corporate systems. Today, few young people get excited about a career in corporate IT. For one thing, they know it is a job they could lose to outsourcing—they might as well work for the service provider and have more job security. The truth is most won’t even do that. Young people with technology skills want to be with Google, Uber, Amazon or the next Facebook. Not only do these employers offer fun, millennial-friendly work environments, they also offer jobs that are quite lucrative, and their employees can enjoy knowing they really are changing the world.
- Experienced people are expensive, often unwilling to change and about to retire. Most enterprises today are facing a serious brain drain due to the retirement of so many baby boomers. The average age of IT employees in many large industries is in the 50s. Many companies, therefore, are looking to outsourcing as a business continuity strategy. The odds are small that someone who is close to retirement and who has not yet been in management will suddenly become a great manager. And the odds are smaller still that someone close to retirement will invest in learning emerging technologies. Add exceptionally high salary and benefits costs for these experts, and it is not hard to understand why industries such as utilities, oil and gas, automotive and many others have leveraged outsourcing just to make sure they can keep the lights on.
- IT changes too often. It doesn’t make sense anymore for corporations to invest in developing an employee’s career as they might have in the past. To prepare someone to be a deep specialist in mainframe or client server, for example, is to equip that person with obsolete information. While an IT career yesterday might have undergone one generational technology shift, today’s workforce undergoes a major technological change about every five years. To keep up, an enterprise needs scale. And even the largest corporate IT department can’t match the scale of service providers that, in many cases, have more than 200,000 employees specializing in IT services. With this kind of scale, outsourcers are much better prepared to absorb generational technology changes while they mitigate risk for their clients. And even at their gargantuan size, service providers still receive complaints from their customers about a lack of access to top talent.
So we know some of the reasons why the talent is scarce. But we still haven’t answered the question “where will the next generation of IT leaders come from?” I believe we are asking the wrong question. Will we even need a CIO 20 years from now? Or will we need someone who manages a portfolio of relationships in order to deliver business services? And if so, where will this person be trained?
Assuming IT remains a separate function within the corporate structure, the IT leaders of tomorrow are likely to come from the service providers themselves. Perhaps outsourcing buyers should consider their outsourcing contract as a chance to audition thousands of skilled people for future leadership roles. If they choose to see it this way, they will need to change how they treat those employees, how they engage with them, how they develop them, and how they contract with their current employer. The bench is there, and it’s stronger than ever. It is up to corporations to learn how to take advantage of it.