When the CIO at the Forzani Group left, the CEO decided to try the job on for size.
In July 2006, Debbie Gillis walked into Bob Sartor's office at The Forzani Group Ltd. and told her boss that she was leaving the company for another job. Gillis had been the CIO at the company, Canada's largest chain of sporting goods stores, for almost five years. Forzani had just finished rolling out several new systems, and Gillis told CEO Sartor that she was moving on.
Sartor told her to leave right away. "Anybody who has access to sensitive data or numbers has to go out that day," he says.
But when it came to replacing Gillis, the CEO was less decisive. His first instinct was to promote someone from the IT department to the job, but Sartor soon realized that he wasn't familiar enough with the tech team. "I had placed a lot of faith in my CIO and didn't know the organization," he says. "I dealt exclusively with her."
Sartor needed to get closer to the IT organization and get a sense of how it understood the business. He also wanted to move a member of the team into the top role but felt this would be unfair because he didn't yet have a sense of each member's business acumen. "Headhunting would be the easy way out," Sartor says. "I wanted to evaluate my key players."
So Sartor decided to take the job himself and become the interim CIO.
Dan Gingras, a partner at Tatum Consulting LLC who is both a former CIO and CEO, says he is somewhat skeptical of the idea. "On one hand, it's fantastic," he says. "It's the first time I've seen a CEO really delve into what the CIO domain looks like except when there's a disaster. But I worry about people who think anyone can do IT. It's like do-it-yourself heart surgery: I wouldn't recommend it."
Sartor's board raised questions as well; the directors were prodding him to fill the position. "I was under pressure from the board to hire a CIO," Sartor recalls. "They said, 'You need a CIO.' I said, 'I know I do. Let me see who the natural business leaders are.'" This investigation would take some time. When Sartor drew up the budget for 2007, he didn't include a CIO salary. He was in no hurry.
A Sporting BusinessDrive through Calgary's sprawling expanse, and you'll see Help Wanted signs everywhere, along with some distinctly Canadian oddities, including a company called Boston Pizza.
Oil and additional extractive industries are fueling Calgary's boom, but other natural resources are also in great supply. Head west into the Rockies, and in a couple of hours you'll hit Banff, a world-class capital of snow sports. Combine lots of disposable income with the region's ample recreation opportunities, and that's good news -- but also a challenge -- for Forzani. "The economies of British Columbia and Alberta are absolutely on fire," Sartor says. "It's the tightest labor market I've ever experienced. Our single biggest challenge is finding people."
A former footballer named John M. Forzani, who was an offensive guard with the Calgary Stampeders, founded the company with three former teammates. In 1974 they opened an athletic shoe store called Forzani's Locker Room in Calgary, which eventually became the Forzani Group Ltd., Canada's largest sporting goods chain.
In 2003, Forzani retired as CEO and, later, became the owner of his former football team. Bob Sartor, who joined the company as CFO and then became president, took over as CEO. A former hockey player known for stopping pucks with his head, Sartor is an avid outdoorsman himself, with a weekend house in Canmore, near Banff, and a passion for reaching formidable summits such as Mount Rainier.
Forzani, too, has risen to the top of its industry. The company is a billion-dollar business, running more than 200 stores under four different brands: Sport Chek, Sport Mart, Coast Mountain and National Sports. The company also franchises 200 stores under several different brands. In total, Forzani commands 20% of its market.
"We're the 800-pound gorilla," Sartor says. "Ten years ago, 61% of the market was made up of independents and regionals. Now that's 51%, and we've taken most of that growth. Our target is 30% of the market. I'm shooting for $2 billion in sales in four years."
Forzani is the only national sporting goods chain in the country. And for good reason. Canada presents national retailers with daunting logistical challenges. Most of the country's population is scattered across a zone that stretches along more than 3,000 miles of the U.S.-Canadian border. Winter weather is often brutal, gumming up shipping.
"Companies in the New York-Philadelphia corridor can probably do the same volume of business as we do in the whole country," Sartor says. "The only way to win is to be the best you can be. Supply chain is absolutely critical to our success. Moving stuff around is key. It's all about right product, right time, right store."
That hasn't been easy. In 1999, when Keith Lambert joined the company as director of supply chain, technology was primitive. "IT was not a major driver of the business," he says. "The warehouse was using a paper-based picking system."
In 2000, Forzani deployed a warehouse management system (WMS), but the company soon outgrew it. The challenge was a dizzying array of branded stores totaling more than 5 million square feet of retail space that needed to be stocked from the distribution centers in Calgary and Toronto.
In 2001, desperately needing a technology overhaul, Forzani hired Gillis as CIO, who at the time ran IT for Staples Inc.'s Canadian operations. Working with Sartor, she devised a plan to replace Forzani's major IT systems, including the warehouse management system, along with merchandise management and point of sale (POS). On top of that, there were five acquisitions to integrate.
"The key business objectives of this project," as Gillis once articulated them, "are to optimize sales in our stores by more effectively and flexibly allocating products and to increase the responsiveness of our distribution centers to our stores through faster dock-to-stock times."
In 2005, Forzani launched a bold plan to replace four of its key IT systems -- all during the same 18-month period -- with a target go-live date of June 2006. Called Project Gemini, it was an ambitious undertaking, to say the least. It involved simultaneously deploying Manhattan Associates Inc.'s WMS as well as the vendor's pack optimization system, JDA Software Group Inc.'s allocation software, with Tibco Software Inc.'s middleware tying everything together.
Consultant Retail Process Engineering LLC based in Tampa, Fla., dispatched a team of consultants to help Forzani with the rollout. Q4 Logistics (now Fortna Inc.) oversaw project management and testing. In total an army of 80 internal and external people worked on the project, with a number of consultants staying on afterward.
"We like to bring in consultants for deployments and hire them afterwards," Sartor says. "We get a chance to try them before we buy them. Why not keep them on board? We're a known commodity to them, and them to us." In order for Forzani to be able to use the technology in time for the back-to-school and Christmas seasons, meeting the deadline was crucial. "We had to have it deployed by the key buying season," says Richard Hannah, senior director, business solutions. "If we didn't do it by June, we'd have to wait until next June."
Ultimately, the project met its deadline. "Within 24 hours [of going live], we were at our existing productivity levels," Lambert says. Before long, the new system was moving more items through both distribution centers at a faster clip, improving product availability and decreasing labor requirements.
The results were substantial: The number of units moved per dollar increased by 5%, while cost decreased by the same amount. Sales increased 7%. "IT has helped us enormously, increasing our margins and inventory turns," Sartor says.
And then Gillis moved on, joining Home Depot's Canada operation. "A CIO life span is only two years or so, and Debbie was here for five," Hannah says. "Under Debbie's leadership, we've replaced a lot of the technology that runs this company. From an IT standpoint, we're in an optimization and stabilization period. We have all this technology; let's make sure we're using it."
Lambert adds, "Five years ago, we couldn't have done without a CIO. Now we have a strong IT team in place." Hannah says he was concerned that Sartor might be wearing too many hats. "Can Bob do both from just a bandwidth perspective?" he wondered.
Going the Other Way
| It may be rare for a CEO to act as CIO, but going the other way isn't exactly common either. Ask Tatum partner Dan Gingras, who moved from CTO to CEO after the Internet startup he worked for lost its chief executive.
"I had spent lots of time over the prior year or two meeting with the board, going over the e-commerce statistics, including margin, marketing efforts, etc.," he recalls. "The board felt comfortable with me, so it wasn't much of a stretch."
Unfortunately, he notes, most CIOs don't get to present to the board -- and certainly not on a regular basis -- so there's almost zero chance that they'll get the opportunity to be considered for a CEO slot. Moreover, many CEOs are picked by search firms, which usually look for candidates who have already been chief executives.
"A search firm would never in a million recommend someone who never held the job before for an opening, much less a move from CIO to CEO," he observes. "The odds of someone making the leap are very, very slim. Too bad really, but I understand why a search firm would be reticent to recommend a CIO for a CEO slot. It takes a leap of imagination and the right person."
An All-Business CIO
Every week, acting CIO Sartor holds a meeting with his IT directors, and for the next couple of hours they talk about the business. "How's the business doing?" he says. "That's what it's all about." Sartor had two reasons for not immediately replacing his CIO: He wanted to get to know his IT team members better, and he wanted them to learn more about the business.
"Our IT group is very talented," Sartor says, "certainly the strongest IT group I've worked with in my career. The one thing they need to improve on is the knowledge of the business, where they fit and the shedding of any belief they might have that they are a self-sustaining entity. We're not here to install fancy systems; we're here to make a profit. It's very important for me that IT understands its role."
After 20 years in IT, Hannah joined the company last year. He says the idea is to make the department more strategic. "The group is a little rough around the edges," he says. "A lot of times, IT takes more of a back-office, keep-the-lights-on role. Tech guys love the next whiz-bang product, but there needs to be an underlying business reason to deploy any new technology. Bob spends a lot of time mentoring us. We're getting a great education on the business. We very rarely talk technology." A CIO, he adds, should have a good grasp of the business as much as technology. "I'd argue that the CIO should be a business person first," Hannah says.
Sartor notes that he's also learning a lot about the team, although he never considered himself a stranger to IT since the department has reported to him for most of his 10 years at the company. "I had too narrow a view of our IT group," he says. "A single entry point really limited my ability to understand the team's capability. There are interrelationships in the IT team that are important."
And the CEO hopes that in turn the department is learning what its place in the organization should be. "When you're in a role that's not front-line operations, you need to live vicariously and revel in their victories," Sartor says. "That takes a lot of ego check. IT has to understand that when the retail organization wins, they win. We tend to get siloed in support functions, and it's important not to do that."
From an IT standpoint, Sartor says he expects the team to spend the next few years optimizing business processes involving project management and software delivery. And unlike some CEOs who don't understand why acquisition integration can take so long, Sartor has an appreciation of the difficulties his IT team faces. "IT has been really busy," Sartor says. "The pace and growth has really been a challenge. We still have a couple of acquisitions to integrate. We're going to need to replace our POS. And we have several other acquisitions we're eyeing that will make life difficult for our IT folks."
And eventually, the company will appoint a new CIO. "At some point in time, this wonderful experiment will come to an end," Sartor says. "That will be when I have a really focused group. I want to promote from within. I didn't know the players well enough. Given another year, I will."
His mandate for the new CIO? "My marching orders," he says, "are build bridges, know your customer intimately, and don't put up with any crap from the organization." Last December the CIO issue came up again at a board meeting. Sartor explained that he planned to continue as acting CIO for the next year.
"How's it going?" asked Al Bellstedt, lead director.
Before Sartor could answer, Franchise Division President Thomas G. Quinn offered his opinion.
"It's never worked better," he said.
Michael Ybarra is a contributing writer for SearchCIO-Midmarket.com. Write to him at email@example.com.