The CIO at the acquiring company, no matter what, is at the due diligence table, analyzing the target company's technology infrastructure, assessing its value and putting a price tag and timetable on integration. As the deal gets done, other decisions surface about organizational structure and whether the IT systems will be fully or partially integrated. The IT process is important to the deal and can even yield information that proves material, but assessing technology is not anything CIOs haven't done many times before, Heller said. Opportunity, she said, lies elsewhere.
"When I look at the backgrounds of CIOs who have moved on, either to become strategic CIOs at big companies where they are right at the executive table leading the ship, or they have moved on to COO roles or CEO roles, and I look at the gap between the skill sets they have and what other CIOs have, it is financial. Real mastery of financials," Heller said.
"If you're going to be on the due diligence team for technology anyway, this is a great opportunity to kind of look up from that and really understand the finances of the merger and acquisition," Heller said. "You could go off and take an executive finance course or you could take the course right there, in your own company, as it is happening."
On-the-job tutorials in high finance are not the only way to benefit during a major acquisition. Units across the company, from human resources to marketing, are undergoing big changes, Heller said. Milk it.
"If you raise your hand and take on some of those changes that are not clearly earmarked to an existing executive, this is a way to get out of that IT silo you may have been in and show senior management that you are an enterprise-wide leader who can take on many other opportunities," Heller said.
"It doesn't really matter where you intend this experience to take you," she said. "The point is, milk it for every piece of knowledge and experience and relationships that you can, and it will bear fruit down the line, not to mention make the job more interesting."
Making a career of M&A
Shawn Banerji, managing director of technology and business services at Russell Reynolds Associates Inc. in New York, said that even just mastering the technology operations side of an M&A deal can pay career dividends. As the stewards of so much critical business information, business processes and regulation, CIOs play a critical role in M&As by giving executives, board members and other investors the transparency required to make sound business decisions.
"You see CIOs sitting on the front lines of these deals doing business diligence. You have a company A that's looking at company B, and they have assessed the integration of the cumulative assets is going to be $50 million and take 18 months. A CIO who's doing diligence might corroborate that, or they may say, 'Whoa, in fact, this is going to take $100 million and three years,'" Banerji said. The information is material either way.
"We've actually seen CIOs build a reputation for being transaction or M&A experts, and they are highly sought out and desirable in the marketplace because of that experience," he said.
A prominent example is Austin Adams, former CIO at JPMorgan Chase & Co., who oversaw technology operations at various banks during the industry's last period of dramatic consolidation. "His ability to do due diligence and effectively integrate these disparate assets -- the guy made a career of doing stuff like that," Banerji said.
CIOs can monetize these skills over the course of their careers, not just as practicing CIOs but also as advisors or board members in their post-operating careers, Banerji said.
Losers can be winners, too
In most M&As, only one CIO survives. For CIOs whose companies are targeted for acquisition, sometimes the best move is to get their resumés in order at the first whiff of a deal. But according to ZRG's Heller, running for the nearest exit may not be the best way to go.
Sometimes, the acquirer's IT organization is not as good as the acquiree's. Rather than shutting doors, have a "proactive conversation," Heller said. "You need to make sure you market yourself and your organization to the acquiring company."
Let it be known that if you can't have the corporate job, you are open to roles other than corporate CIO, she said. Many large companies, for example, have trouble finding talented CIOs to head up their global markets. Next to financial acumen, global experience is another good thing to have on a CIO resumé.
This all assumes you want to stay at the company, Heller stressed.
Executives often choose a company for its management philosophy and mores. If the acquiring company doesn't prove to be your cup of tea, fighting to stay on may be the wrong thing to do. As you are being interviewed by the new management team, Heller said, "In the back of your mind, you should be interviewing them. And the question you should be asking is, can you stomach them?"
Let us know what you think about the story; email: Linda Tucci, Senior News Writer