Few CIOs accomplished so much in such a short amount of time as Gregor Bailar. By the time he retired from Capital One, he had been a technology executive at Citibank and the Executive Vice President of Operations and Technology at NASDAQ prior to taking on the role of CIO of Capital One. He was in his mid-40s at the time of his departure. He was still in his 30s when he was invited to join his first board - that of Digitas, Inc. in 2001. While at Capital One, he was invited to join the board of the Corporate Executive Board, a board that he is still a part of. Today, he is no longer a CIO, but in addition to his public board affiliation, he sits on a number of non-profit boards, as well. In this interview, he shares his path to gaining board access, the advantages that CIOs bring to boards, and reasons why more CIOs are likely to be asked to join boards in the future.
(This is the ninth article in the "Board-Level CIO" series. To read past interviews with board-level CIOs from FedEx, Southwest Airlines, Texas Instruments, General Motors, and Cardinal Health, please visit this link. To read future articles in this series, please click the "Follow" link above.)
Peter High: Gregor, you were one of the earliest CIOs to be invited to join the board of companies. In 2001, you joined the board of Digitas, Inc. How did that opportunity present itself?
Gregor Bailar: I was working at NASDAQ at the time and we were in discussions with Hellman and Friedman about funding opportunities for potential expansion for NASDAQ. I worked closely with several members of their team on a few deals over the course of several months. At the time H&F had an investment in Digitas (one of the first advertising firms to unlock digital on-line advertising) and wanted add a technologist to the board. They spoke to Frank Zarb, the Chairman of NASDAQ and got his nod and then approached me for the role. It was a great first board with a fantastic team. Ultimately, we sold Digitas to Publicis in 2007 for $1.3 billion. Digitas gained global access and growth and the investors saw a handsome return.
High: What was the company looking for in adding a CIO to the board?
Bailar: Digitas wanted someone who saw business through a technology-enabled perspective and someone who had experience in what was then the New Frontier of the internet.
High: In July of 2007, you joined your first public company board, that of the Corporate Executive Board. What was CEB looking for when they approached you?
Bailar: CEB was looking for similar expertise to Digitas, but also liked the ability to round out their C-level membership of their board with a CIO. CEB enables C-Level executives and their staffs through access to specific best practices, information and capabilities in their professional fields. Technology is a critical part of this and having a CIO on the board was part of staffing a well-rounded board. My experience in the financial services and the technology vendor arenas are also a plus.
High: What unique attributes do you think a CIO brings to board activities?
Bailar: Great CIOs are a unique mix of operators, innovators and sales animals. CIOs are almost always tasked with running the current technology operations of a company while helping invent and realize the capabilities the company will need in the future. There are very few perches with such a broad scope in corporate life. As a contrast, it is rare to see a business operations executive who is also responsible for R&D. But this scenario is commonplace for CIOs. This means that great CIOs not only know how to run their operations, but they are also catalysts and enablers of innovation. This both requires and offers them a very different perspective and this can be useful in guiding board decisions. By their nature, great CIOs are always looking for ways to make things simpler, faster, cheaper and automated. They are also adept at distilling corporate mumbo-jumbo into meaningful executable outcomes and setting resources in motion to realize those outcomes. This can be extremely useful in board discussions and in guiding management.
High: You mention innovation as a domain that CIOs are increasingly called upon to run or at least to stimulate. This involves risk taking, naturally. CIOs are also called upon to manage security, which is about risk mitigation. To what extent do you find that boards look to CIOs for one discipline versus the other?
Bailar: A CIO on a board is a natural go-to person for security and risk discussions. Any CEO and board tries to leverage the individual expertise of its members and to that end, I would expect that most CIOs on boards take on some responsibility for risk and security oversight. I am Chairman of the Audit Committee at CEB and have headed up several reviews of security and risk in my time on the board. That said, a well-managed company should not be spending the majority of its board time mired in security and risk issues. That leaves a lot of time for innovation, strategy, acquisitions, executive development, etc.
High: Do you think that more CIOs are likely to be asked to join the boards of companies? If so, why?
Bailar: Yes, more CIOs will be asked to join boards. All business is delivered through or with technology today. Not having a technology expert on your board is a huge risk for any board and could be seen as potentially irresponsible by outside observers and/or regulators. Companies are required to have one board member who is a qualified “Financial Expert” on their audit committee. With the technology-enabled business world we live in and the risks and opportunities that presents, one could certainly see a need for a “Technology Expert” as the next required board asset.
High: What would you recommend to others who wish to follow in your footsteps?
Bailar: First things first: Great work and excellent references are the cornerstones to a board level role. Lots of scar tissue and on-the-ground success gain the credibility to be worthy of a board-level role. At the same time having a C-suite perspective, acquisition experience, face time with a board and strategic mindset are critical as well. Look for experiences which will challenge and develop you in these areas.
That said, board-level positions are sourced just like any other senior-level role. Candidates are found through references and/or recruiters (who usually find candidates through references). Great CIOs have network of recruiters and if you feel you have the right stuff for a board role, talk this over with your most trusted recruiters and see what they think. They have access to searches under way where you might be a fit, and can flag you as a potential for a future search.
High: It should be noted that since you left Capital One (your last full-time CIO position), you have also been on the board of several philanthropic organizations. Can you describe those?
Bailar: Non-profit boards are a totally different kettle of fish. I have been on a few over the years and have advised a few others.
Each has been very different – especially in the ways in which they run their board and/or their company. The single underlying advice I would have about joining a non-profit board is to make sure you are passionate about what they do. If you are you will be far better equipped to weather their peculiarities and complexities and have a positive impact.
High: Across the variety of boards that you have served on, what has been the most interesting or important issue that you have been involved with?
Bailar: A very large acquisition was probably the most interesting and important for me. In 2012, CEB acquired SHL Talent Measurement out of England. They are the leading provider of integrated new-hire testing and analytics from pre-hire through the development and appraisal process. They use a very large data-set from hundreds of top-tier companies (customers) to predict the effectiveness of a candidate through benchmarking analytics and tools. Their whole model relies on SaaS-delivered services (integrated into customer business process) and tools powered by “big-data” analytics. Needless to say, there were a lot of IT issues.
As the CIO on the board, I asked questions like, is the IP theirs? Is it unique? Is it managed well? Is it scalable? Is is secure? Who holds the keys to the kingdom? Are there individuals who were flight-risks? Could the platform be used for other similar products? As the head of the audit committee for CEB, I was also deeply involved in the overall risk attributes of the deal. In the end, the acquisition was CEB’s largest and given its size and complexity, the most successful to date.
High: Has been the most sensitive/dangerous board issue you have been involved with?
Bailar: Mine was a potential ouster of a CEO commandeered by an investor/board member who had access to senior management and tried to influence them to undermine the CEO. I was head of the compensation committee (this was prior to Nomination and Governance Committees) and had the responsibility for managing the board task force to resolve the situation. I led the compensation committee and therefore was responsible for the “get well” process for the CEO situation.
We opted to have the CEO go through a 360-degree coaching process to determine strengths and weaknesses and potential and real issues. During the process, we also conducted a diagnostic on the board members and their individual motivations. During these two processes we carefully managed the interaction between management and the board to avoid any “tampering” and distraction. The CEO process revealed that the CEO was indeed very well supported by his team. No doubt he had areas where improvement was possible and prescribed, but he also had distinct strengths that we determined to be valuable to the company and the team.
The Board process revealed a particular board member/investor was disproportionately influential and was ready for liquidation of their investment. In the process of trying to influence the factors they deemed necessary for a successful liquidation event, they (somewhat inadvertently) undermined the CEO – and in fact the progress of the company.
The “get well” plan included a “fitness” program for the CEO and specific steps that would facilitate the liquidation of the investor. Less than a year later the investor exited happily and the CEO became one of the “hottest” marketing/advertising
Peter High is President of Metis Strategy, a business and IT advisory firm. His latest book, Implementing World Class IT Strategy, has just been released by Wiley Press/Jossey-Bass. Peter will provide a free video or teleconference lecture on the book for any department that reads it as a team. He is also the author of World Class IT: Why Businesses Succeed When IT Triumphs. Peter moderates the Forum on World Class IT podcast series. Follow him on @WorldClassIT.
