CIOs on the Go

t's been less than three years since Congress directed major federal agencies to appoint chief information officers, but already more than half of the original CIOs have left their jobs and have been replaced. The Navy-to cite an extreme example-went through four CIOs in one year. The high rate of change is not surprising for a new high-level job, many observers say. But in the view of others, the turnover symbolizes the continuing management challenges associated with federal information technology.

"That first batch [of federal CIOs] was pretty bad," says a former congressional aide who kept a close eye on implementation of the 1996 Clinger-Cohen Act, which mandated CIOs. Several Cabinet departments resisted creating the new posts, assigning the CIO title to an existing official who kept his or her original job-the assistant secretary for management and administration, perhaps, or the chief financial officer. That frustrated the intent of the law, which was to make a single, senior-level official the focal point for IT.

Now a new batch of CIOs is in place, but many people expect turnover to continue. They point to the short tenures of private-sector CIOs and the increasingly political nature of the federal CIO's job. The transition to the year 2000 could mark the end of some CIOs' federal careers if their agencies experience failures of information systems and infrastructures.

Turnover can stymie progress. "The troubling thing," says Alan P. Balutis, deputy CIO at the Commerce Department, "is that IT issues usually are long-term issues." It takes years and years to straighten out the antiquated tax processing systems at the IRS or to build a modern system for improving weather forecasts. These huge projects require substantial backing from Congress and the administration. Obtaining and maintaining that support is one important part of a CIO's job.

Big projects also demand visionary leadership, and too often the person with the vision is gone before the project is very far along. A September 1998 General Accounting Office report on IT problems at the State Department cited managerial turnover as one cause of the problems. "Since March 1996, State has had two undersecretaries for management, one acting chief information officer and two chief information officers," said the report (NSIAD-98-242), which added that two major reorganizations of the Office of Information Resources Management occurred during the same period. State officials said the department lacked "a clear sense of technical direction and operational requirements," the auditors reported.

Some experts say turnover among CIOs is no bigger a problem in government than it is in the private sector. Surveys have found that the average corporate CIO lasts less than three years--giving them about as much staying power as the average political appointee in government. "Is [CIO turnover] extraordinary? I don't think so," says G. Edward DeSeve, the Office of Management and Budget official who heads the governmentwide CIO Council.

Other observers argue that the turnover among federal CIOs doesn't much matter, because they are failing to make a real difference in how their agencies plan for and use IT. These critics view the CIOs as trapped in limbo between the political appointees who make policy and the career federal employees who execute it.

Most CIOs are career members of the Senior Executive Service, and most of the non-career incumbents have spent years in proximity to the government. For example, John J. Callahan, the assistant secretary for management and budget at the Department of Health and Human Services, who also serves as the department's CIO, worked on Senate staffs before joining the Clinton administration in 1995. Arthur L. Money, the Defense Department CIO who has other duties as well, spent 33 years with TRW and other defense electronics and intelligence contractors before taking a senior Air Force job, then moving into the Pentagon hierarchy.

More typical is the resume of Agriculture's widely respected Anne Thomson Reed, who spent 12 years in financial management at the Navy before being appointed deputy assistant secretary of Agriculture for administration. She became CIO at USDA in 1996 after enactment of the Clinger-Cohen Act, also known as the Information Technology Management Reform Act. As required by the law, managing IT is her primary responsibility.

Clinger-Cohen also requires that the CIO report to the department Secretary, but Reed reports to Deputy Secretary Richard E. Rominger. Such reporting arrangements are very much the norm. The situation suggests that organization charts, like morality, can't always be legislated. But under pressure from OMB and sometimes from Congress, more departments are now conforming to the law.

In one such case, former Veterans Affairs Secretary Jesse Brown designated D. Mark Catlett, a career SES member, as VA's first CIO. But Catlett also was the department's assistant secretary for management, CFO and deputy assistant secretary for budget. Pressed from both ends of Pennsylvania Avenue to strengthen IT management, Brown's successor, Togo West, last July created a full-time CIO job, the assistant secretary for information and technology. But six months later, West had not filled the new slot. A savvy career manager, Harold F. Gracey Jr., was acting in the post. When a new assistant secretary is confirmed, Gracey will have the No. 2 job in the CIO office.

The CIO controls a relatively small portion of the Veterans Affairs IT budget. VA will spend close to $1 billion on hardware, software, services and IT staff salaries this year, but the bulk of that spending is controlled by the department's two major business units, the Veterans Health Administration and the Veterans Benefits Administration--not by the CIO.

Asked about trying to manage the IT architecture at the VA without much budget responsibility, Gracey endorses the '90s management philosophy of consensus-building. "We [in IT] sometimes have been described as bureaucrats' bureaucrats--you know, kind of in the control business," he says. "I'm trying to move that more to convince, cajole and cooperate. ... I came here in the control environment [of the early 1980s], and pure control doesn't work either, in an organization this big with such powerful components as VHA and VBA. You have to work together in order to get great things done." He notes that the CIO has review power over the department's IT spending.

Some people describe the CIO's job as one of advising, influencing and leading, rather than managing in the conventional sense. For example, CIOs are supposed to work with their peers on reengineering and streamlining business practices. Often this involves making cultural changes in rule-bound and hierarchical federal organizations. "I'm sorry, but I can't think of a group that's less prepared to lead cultural changes" than CIOs, snorts George Lindamood, a Gartner Group consultant who works with government CIOs. He speaks from experience. Lindamood is a former Washington state CIO.

Power of the Purse

Others involved with federal information technology issues are not so sure that mere influence will suffice. "If you are not given the money and the management of the money, you don't have the authority," says Stephen J. Rohleder, a partner in Andersen Consulting who works with many federal agencies. "You need the capacity to allocate resources across the enterprise," says Agriculture's Reed. A bill sponsored by Sen. Richard Lugar, R-Ind., to give Reed the authority to spend the IT funds appropriated to USDA bureaus has languished in the Senate.

The Association for Federal Information Resources Management conducts an annual survey of federal CIOs' on-the-job challenges and concerns. In 1998, for the first time, the need to control IT budgets showed up among the top 10 challenges. It was in 21st place the year before.

There's a long tradition of giving bureaus of Cabinet departments their own IT budgets. Here's how Lugar described the situation when he introduced his bill: "Historically, USDA's administration has failed to exercise the authority to control the IT expenditures of its 30 agencies. These agencies' independent IT purchases have led to systems that are unable to communicate across the department. This has impeded program delivery and resulted in a labyrinth of duplicative and incompatible systems that has wasted hundreds of millions of dollars. ... To be successful, the CIO must have significant legal and budgetary authorities. The CIO at USDA has neither. Individual agencies, which control their own budgets, can ignore the CIO. Currently, USDA's CIO has the responsibility to coordinate IT investments across agencies, but lacks the planning and budgeting authority to meet this responsibility."

Lugar blamed a series of Agriculture secretaries for letting bureau IT spending go uncontrolled. People in the executive branch often blame Congress for similar situations across government. Only in DoD do CIOs control the IT purse strings. In other departments, lawmakers sometimes take more interest in the bureaus and their specific programs or projects than in the umbrella departmental organization. The fact is that both Congress and departmental executives have done little to give CIOs the power of the purse and related authority. The upshot is what Thomas L. Hewitt, who monitors the federal IT market as chairman of Federal Sources Inc. in McLean, Va., calls "questionable clout" for CIOs.

Why They Go

Clinger-Cohen "was obviously intended to change the power equation," says Lindamood. "It's been watered down, as you would obviously expect the bureaucracy to do." Does this weakness contribute to CIO turnover? There's evidence that job frustration is a factor in some departures, but interviews with former federal CIOs and two that were soon to depart revealed other reasons, including readiness to retire, family obligations and--most notably--compensation.

Federal CIOs must work under a $125,900 ceiling on executive pay in the Washington area. By contrast, private-sector CIOs often earn $250,000 or more--especially in the Fortune 500 corporations that are comparable in size to Cabinet agencies.

Neil J. Stillman, deputy CIO at HHS and the true CIO of the department in most respects, will retire in April after 34 years in government. He says the chief advantage of working for government is having a higher level of responsibility throughout one's career than in a corporate environment. "But in most cases that doesn't make up for a lack of money" when younger people are weighing career paths, he says. Many CIOs could double their salaries by moving to the private sector, but some, like Stillman, have stayed on because of incentives built into the old Civil Service Retirement System. The newer Federal Employee Retirement System won't have the same power to retain federal employees, he says.

"There is nothing more challenging and rewarding than public service," says Mark Boster, former deputy CIO at Justice. "But you're now getting to the point where those [pay] differentials are substantial, and they're not as easy to ignore." Like Stillman at HHS, Boster had been his department's CIO in most respects. He took a private-sector job after retiring in February.

On the other hand, Roger W. Baker, Commerce CIO for little more than six months, came to the department after stints with an IT consulting firm and at Visa International, where he created and managed the credit card company's online banking system. At Visa, he was making about four times as much as he's earning now. So why would he go to Commerce? He's lucky he can afford to do so, Baker replies, because he's finding satisfaction in his job. But he adds that the scope of IT at the Commerce Department, which is spending close to $1 billion on technology this year, is beyond any in his experience. It's equivalent to being CIO at one of America's top 50 companies.

The low pay doesn't mean he can coast, Baker adds. "This job is certainly just as hectic as any of the private-sector jobs I've had," he says. "It's much harder to move things in the government." Entrenched interests and the lack of a profit motive mean that public-sector organizations have less incentive to change, he says.

The Need for Speed

In the private sector, an institution's inability to keep pace with peers can doom it; the effects of government sluggishness are less immediately apparent. In fact, students of government argue that our system of governance is designed to fend off sudden change, in the interest of centrism and stability. Agencies' failure to zig and zag in response to the latest trends has served them well for two centuries.

But technology is speeding up the pace of change. Companies used to take an average of three years to develop new products, but now they get products to market in about two years. 3M earns 30 percent of its revenues from products introduced during the past four years. Enterprises such as Netscape Communications Corp. can burst upon the commercial scene, create a market by commercializing a new kind of product--the Web browser--and fade away in less than five years.

In this accelerated environment, federal agencies risk a loss of credibility and political support if they plod along at their customary pace. Agencies must deliver the benefits of current technology, such as greater responsiveness to individuals' needs and wider availability of information.

"People and companies want to leverage their single most constrained resource--time--through the use of technology," writes Michael J. Walsh, Canadian marketing director for Sun Microsystems. "They want to do so on their terms--anytime, anywhere, on any type of device. If you don't give them that option, they will simply leave you."

Public expectations of what technology can do for consumers have been raised by private-sector examples repeated so often in CIO circles that they've become a kind of mantra: FedEx. Amazon.com. Dell Computer Corp. American Express. These companies use IT to strengthen relationships with customers and deliver dynamic customer services that seem the opposite of the 9-to-5, please-take-a-number bureaucratic model. Government should be using IT in ways comparable to the leading companies, say observers such as Robert D. Atkinson of the Progressive Policy Institute, a Washington think tank affiliated with centrist Democrats.

"We're in the very early stages of moving to digital government," says Atkinson, author of a forthcoming study of this topic. One of the reasons, he says, is that strategic use of technology has been viewed largely as a technical issue within agencies. "Digital government requires the leadership for IT to shift from the IT staff to elected officials and agency heads," he adds.

The need for high-level attention is the reason the Clinger-Cohen Act requires that CIOs report directly to department heads--but that's one of the most consistently ignored portions of the law. OMB's DeSeve says his oversight staff is encouraging agencies to comply as opportunities arise, during reorganizations and when there's CIO turnover. "We're trying not to be one-size-fits-all with the agencies," he says.

In 1997, when then-Interior Department CIO Donald R. Lasher was gearing up to tackle year 2000 remediation, he issued some memos in the name of Bonnie Cohen, the assistant secretary for policy, management and budget. But the issue got little attention from department managers until Secretary Bruce Babbitt got involved and said it was important, Lasher recalls. That's why he thinks the CIO needs to be able to work with the Secretary.

Lasher, Interior's first CIO, was with the department less than a year. He joined Interior in 1997 at the age of 65 after retiring as de facto CIO of the United Services Automobile Association (USAA), a leading insurer and financial services company. Earlier, Lasher had retired from the Army as a major general.

Although Lasher's tenure at Interior was brief, he recruited his successor, Darryl W. White, a career Army employee. Lasher contends it would have been difficult to recruit a CIO from the private sector. "The salary is not going to attract them," he says. Besides, he argues, many private-sector candidates would be reluctant to move to Washington and would not be happy without big budgets and staffs. The federal government is "a tough environment," he says, and without his Army experience, he would have been at a loss in working within the bureaucracy.

Not everyone subscribes to Lasher's views. When the Federal Aviation Administration named its first CIO this year, its choice was Daniel J. Mehan, an international vice president of AT&T Corp., where his specialty is quality and process management. Those qualifications will stand Mehan in good stead at FAA, where air traffic control modernization programs have suffered from delays and other management problems.

Outside the Inner Circle

If CIOs are career government employees, they may not be taken seriously by political appointees. More than one CIO mentions the instinctive distrust between newly arrived appointees and the longtime agency managers. "There are meetings that are held where the CIOs are being left out," says Gloria Parker, CIO at the Housing and Urban Development Department.

On the other hand, Parker believes that the prevailing situation has not made a major dent in CIOs' effectiveness. "The CIO has been able, generally speaking, to initiate IT reform across the federal government," she says. In Parker's view, CIOs should be career managers. "Technology is not a political issue," she says. "It can't afford to change every time a political [appointee] comes in."

Parker is the only person to have worked at the top of CIO organizations in two Cabinet departments. After a number of years in IT companies she joined the Education Department, became deputy CIO and moved last year to HUD as its CIO. At Education, she was for all intents and purposes the CIO. Donald Rappaport, the Education CIO for the last couple of years, is also the chief financial officer. Earlier this year, the department was trying to recruit a CIO who would have IT as his or her primary responsibility.

The model Education has followed thus far, although not in full compliance with the Clinger-Cohen law, seems to work for some agencies. Where the person with the CIO title has broader responsibilities and delegates the CIO responsibilities to a deputy, the result has been CIO stability in agencies such as HHS and Justice.

Credibility Concerns

Some observers, however, say stability is not really the issue. That's the view of a team of PricewaterhouseCoopers consultants who compiled a recent book, Information Leadership: A Government Executive's Guide. They say what's most essential is that a CIO gain credibility early in his or her tenure. Someone with little or no federal government experience will fight an uphill battle to get credibility, and newcomers by no means arrive with a supply of it. Instead, they're often struggling to overcome a history of deficiencies in the agency's IT performance.

"In the end, CIOs gain the influence they need to lead by showing they add value to the executive team," reported the Pricewaterhouse Coopers team, which included Therese L. Morin, Ken Devansky, Gard L. Little and Craig Petrun. One way to do this is by helping many different parts of the organization develop a common vision of how the agency can use IT to its strategic advantage. The CIO can interpret program needs in IT terms for the technical staff and help the program people understand the possibilities and the limits of technology.

The cultural divide between "techies" and program staffs seems to be growing wider by the day, and an increasing number of knowledgeable observers say the divide is holding back organizations. The Progressive Policy Institute's Atkinson says IT professionals have done a poor job of communicating with policy and program officials. Atkinson says that when he attends technical meetings and IT expos, he is struck by all the acronyms in use. "If you don't speak acronym," he says, "you really have no idea of what's going on."

Decision-makers in both the administration and Congress "don't think about investments in digital government," he adds. "They think about it as expenditures." It's the CIO's job to change that attitude, in the view of many, but it will be a struggle. Atkinson suggests that the CIO's natural allies, the big IT companies that do much of the nuts-and-bolts work on the government's IT projects, could do more to help bridge this divide. The IT industry has much to gain, he points out. And in Atkinson's view, political pressure is one key to opening policy-makers' eyes to the benefits of electronic government.

The year 2000 problem has a two-edged effect in this regard. It has forced agency executives to assess the role of information systems in their operations. When agencies tallied up their mission-critical systems, the degree to which computer and communications technologies enable the government to get its work done came as an eye-opener to some executives. The pervasiveness of technology made non-IT executives understand they needed to pay more attention to it, says Marvin Langston, deputy CIO of the Defense Department.

On the other hand, if year 2000 failures are widespread and it becomes apparent that the IT staff was unable to manage remediation programs or report accurately on the situation, IT credibility will take another hit. Getting rid of the technology is not an option for agencies, of course, but they can replace the CIOs and IT managers and outsource much of the IT work.

Paul Wohlleben, a former Environmental Protection Agency and General Services Administration IT executive, calls Y2K "a high-reward, high-risk situation." Wohlleben, who now works for the Grant Thornton professional services firm, says "how it turns out is going to have a whole lot to do with whether CIOs can capitalize on their new visibility." Federal Sources' Hewitt predicts CIOs "will become a lot stronger" in the aftermath of Y2K. OMB's DeSeve agrees, calling the systematic remediation effort a success story.

Next-Century Government

Over the past couple of decades, federal IT successes have tended to be overshadowed by very visible failures--Medicare, air traffic control and IRS upgrades, the much-delayed weather systems modernization and others. Meanwhile, agencies were installing office networks and putting a PC on every desk without much fanfare as routine document preparation and other tasks were automated.

Now the government may be ready to move to the next phase, where important business is done online and paper need never be created. "If government doesn't deliver services to the desktop, there's going to be some major pressure from the general population," says Andersen Consulting's Rohleder. Downsizing and the trend toward eliminating the middleman also have pushed agencies toward IT-enabled services. The technology has reached the point where it's more reliable and accessible to a substantial portion of the population, and it can save the government money instead of always being a cost item.

For example, when the Education Department gets a student financial aid application submitted on paper, the department spends $2.55 to process it. If the aid applicant fills out the application on the World Wide Web (at www.fafsa.ed.gov), the processing cost drops to 90 cents. Other agencies have similar successes to relate, and there will be more.

As DoD's Langston sees it, the CIO should be a catalyst for much of this. In a November speech, he recalled having worked in defense electronics acquisition programs a few years ago, when that was regarded as one of the most important areas to be involved with. Now, he said, the CIO is "a significant emerging power base." He predicted that "the CIO will continue to emerge as important because of our dependence" on information networks and their contents.

If federal CIOs do indeed gain in influence, more of them may stick with their jobs. But it's more likely that past will be prologue where this job is concerned, and the revolving door will keep spinning.