CIO Exodus

CIO Exodus

October 07, 2009

Bart Thielbar
Senior Research Analyst
Sierra Energy Group

Industry observers have noted the growing number of utility chief information officers who have either resigned or retired in recent months. This has many questioning whether there is something about the smart grid transformation that has those utility CIOs, as they are called, making haste to leave, or if it is just a strange series of coincidences.

Regardless of the reasons, one thing is clear: The departure of so many CIOs, each with a great deal of experience and tenure, will have a profound impact on the evolution and implementation of smart grid technologies.

Recent departures include Mike Carlson, who left Xcel Energy for opportunities with GridPoint. Dennis Klinger from Florida Power & Light has recently retired, as has Gene Zimon from NSTAR. Ray Johnson has announced his retirement from Entergy. Each of these individuals had developed a strong reputation in the industry and to have them all depart within a few months of each other has been disconcerting to those who are observing the evolution of the industry. It is a significant loss of intellectual capital at a time when the industry is going through substantial transformation and automation.

But is the turnover really that significant? CIO magazine tracks CIO tenure across all industries and their studies indicate that CIOs generally stay in their jobs for four to five years. By comparison, nearly all of the utility CIOs who have recently left their jobs had tenure several times longer than the national averages identified by CIO. Also, the recent turnover in utility CIOs, while a bit surprising and seemingly coincidental in timing, is still a relatively modest number in comparison with the total number of utility CIOs.

Interviews with some of the CIOs have confirmed that they greatly enjoyed the position and its inherent challenges. In the late 1990s, they came to utilities because of the promises such businesses held in terms of restructuring. They also, of course, have personal and professional interests beyond being a CIO. More than anything, those personal and professional interests are behind the recent career choices.

CIOs, by nature, are careful and thorough in their thinking and planning. Each of the CIOs discussed the care they took to ensure that their organizations and personal lives were both well positioned for a transition. This included personal retirement plans such as travel, hobbies and time with family, as well as new professional interests such as setting up a venture capital fund to work with emerging technology companies, serving on a board of directors for a different company and serving as an advisor to the industry, to name a few.

New Talent

Consider, for example, Gene Zimon, the recently retired CIO from NSTAR. After a rewarding and challenging 39-year career, including eight years as the CIO at NSTAR, Zimon decided the time was right to pursue his passions, which include various sporting activities and working with emerging technology companies, primarily as a venture capitalist.

Prior to making his decision, he had worked hard to ensure that a transition plan was in place and that NSTAR was positioned to move forward without him. Although he said he will miss the challenges and opportunities associated with the advancement of smart grid technologies and the expansion and integration of alternative energy sources, he said he would not miss the regulatory process and its impact on the introduction of new technologies in the utility industry. Emerging technology companies that operate in a faster-paced environment are closely aligned with his personal interests, and he said he is excited about those opportunities.

Similarly, Mike Carlson, one of the architects of Xcel Energy's smart grid project in Boulder, Colo., decided that the time was right to pursue professional interests that are more closely aligned with his passion around innovation and driving technology into the grid. GridPoint is a dynamic and growing company. Carlson's decision to join it seems to be a good fit for all involved and is likely to have a positive impact on the industry as a whole. As did the others, he said he enjoyed the challenges, opportunities and rewards he experienced as a CIO.

As many know, the job of a CIO has many elements that can't quite be considered innovative and exciting by nature -- think North American Electric Reliability Corp. standards, e-mail spam management and running the nightly bill process. Although these are important responsibilities, they compete for time and attention against the more exciting and value-added portions of the job -- namely, the implementation of new technologies that improve the efficiency of the business. At GridPoint, Carlson will be closer to the transformative and innovative and less involved with administrative issues that detract from his true passions.

So, what does all of this mean for the industry? Will the loss of more than 100 years of utility and technology experience have an adverse affect on the industry, or will it help to usher in new people with new perspectives who may have new ways of solving both new and old problems? The jury will be out for a while. But business and information technology alignment, project management and use of new technologies will be the areas most likely to be impacted.

When it comes to aligning information technology with the business needs and managing large and complex projects that span multiple jurisdictions and platforms, there is no substitute for experience. Utilities will be challenged to ensure that vital needs are met, while simultaneously grooming new CIOs. On the other hand, nothing gives new life like a new perspective.