The Importance of an MBA

By Jodi Mardesich

The career path to becoming a CIO used to begin with an undergraduate degree in computer science and work experience in the technology trenches. Now, with technology a critical competitive weapon in corporations, and growing concerns about security from the boardroom, a higher education business background is increasingly essential.

For Lisa Johnson, chief security officer at Nike, an MBA was critical to succeeding in her technology management position. At the recent RSA Conference 2005 in San Francisco, Johnson said that by learning the language of business, she could understand and communicate better with other senior executives. "When I went to speak to the business team, I could talk in their language," Johnson told conference attendees. Her recommendation to those in IT? "You need to make sure you understand what's important to your business, not just your IT systems."

CIOs are at a crossroads, according to Marianne Broadbent and Ellen Kitzis, authors of The New CIO Leader. "Two paths lie ahead of today's CIOs. One leads to becoming a trusted senior executive leader of the enterprise; the other leads to a technical management, 'just keep the lights on and do it cheap' role," they write. In an interview with CIO Insight magazine, Kitzis said she is seeing a paradigm shift in CIOs' backgrounds. As an example, she noted that 30 to 40 percent of the Gartner Executive Program's clientele -- a membership-based organization of 2,000 CIOs -- have a business background rather than a traditional IT background.

The trend toward the MBA CIO is spreading. About 25 percent of the members of The Working Council for CIOs have MBAs, according to Optimize magazine. In its "Defining the CIO" survey of 600 CIOs, Optimize found that technology leaders spent the largest percentage of their time -- 35 percent -- in a technology role, but they also spent significant portions of their time on non-technical tasks: 28 percent contribute input as an operational executive, 18 percent as a business innovator, 17 percent as a corporate strategist, and 11 percent as a financial analyst.

Indeed, even though most CIOs start out in IT, many cite experience in non-technology fields. In CIO magazine's "The State of the CIO 2004" survey, 70 percent of the 540 respondents said their primary job experience leading to the CIO spot was in IT, followed by 7 percent who said their primary experience was consulting, and 5 percent from finance/accounting. However, many of these respondents had job experience in other fields as well, suggesting that a variety of experience prepared them for their CIO jobs. Sixty-two percent had experience in consulting; 45 percent had experience in non-IT business operations; 34 percent came from administration; and 25 percent had worked in customer service, engineering, and finance or accounting.

Education trends

Another sign of the times: Some schools are changing their curriculum to address market needs. Kenneth B. Dunn, dean of Carnegie Mellon University's Tepper School of Business, which is highly ranked for its IT focus, says many MBA programs are similar, and don't focus enough on using technology for analytical decision making. "In most companies, senior management looks at IT as just a huge cost. They want MBAs who are trained and able to get a return from the IT investments and make good IT investment decisions," Dunn told CIO Insight. "We try to equip our students with an understanding of what the real power of technology is and how they can turn that cost into strategic advantage."

According to a CIO Insight survey last year, CIOs see a disconnect between education and the reality of IT jobs. More than 61 percent of the respondents said college graduates are unprepared for the real world of business IT. Seventy-four percent said their young hires lack project management acumen; 71 percent lack skills in business operations; and 71 percent of new hires are lacking in interpersonal skills.

The increased interest in formal business education may be affecting another trend: In recent years, enrollment in computer science graduate programs has decreased. The most recent Taulbee Survey, which polls 177 computer departments in North America, found enrollment down five percent in PhD programs in 2003, and fewer PhD graduates since 1991. The number of bachelor degrees fell 3 percent in 2003, and was projected to drop another 7 percent in 2004. The number of undergraduate majors dropped 23 percent.

CIOs don't have to have an MBA to do their jobs effectively, however. Instead, one simple way to stay business-savvy, recommended by Nike's Johnson, is to read business magazines to keep an eye on trends, such as supply chain changes, that can affect their business.

The most effective CIOs -- need to keep an eye on the horizon, not just on projects in front of them.

"New CIO leaders will identify, ahead of their business colleagues, where the opportunities exist for their specific enterprise and will position themselves and the enterprise to move to the next level of performance," Broadbent and Kitzis write in their book. "To do that, however, the CIO must take a real leadership role as an enterprise executive, coaching and coaxing business colleagues about the potential business use of particular technologies while also unlocking the information and business intelligence trapped inside business processes." 

Jodi Mardesich writes about business and is a former staff writer for Fortune.