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When J.M. Huber bought CP Kelco last year, CIO Joyce Young felt nervous about her job prospects at the new parent company. She knew that when companies are purchased, their CIOs are usually sent packing. "I expected to be told that I wasn't needed anymore," she says.
Hardly the case.
Instead, Young became the highest level executive at CP Kelco of Chicago, a $480 million food additives company, to be retained after it was acquired by $1.8 billion chemical manufacturer J.M. Huber Corp. She kept the coveted CIO title at CP Kelco, which became a business unit of Havre de Grace, Md.-based J.M. Huber.
Young's new supervisor, Jerry Coughlin, vice president of supply chain and services for J.M. Huber, attributes Young's success to her ability to understand business strategy, along with an inner strength that allows her to make hard choices for the greater good of the new organization. For example, she recommended that J.M. Huber rip out an ERP system she had just spent eight months installing.
"She had the courage to open herself up to what would be the right decisions for this new company, and that was pretty important," says Coughlin.
Young, like many CIOs, has found business savvy, leadership and management skills -- more so than technology chops -- make CIOs valuable enough to create a future for themselves if their companies are acquired.
That's becoming more and more likely for companies of all sizes. Not only are big firms getting bigger -- Oracle Corp. bought PeopleSoft Inc.; Kmart Corp. subsumed Sears Roebuck and Co.; SBC Communications Inc. purchased AT&T Corp.; and Cisco Systems Inc. picked up 12 companies last year -- but activity is brisk in the midmarket, as well. Some 663 companies with revenues of $50 million to $500 million were purchased in 2004 through the third quarter, up 8% from the same period in 2003, according to Minneapolis-based financial services firm Piper Jaffray Cos. It expects this trend to accelerate this year.
Yet by the time an acquisition is announced, it's often too late for CIOs to take action to save their jobs. The groundwork is laid long before, in their relationships with business-side executives. They will be the ones to vouch emphatically for valued IT colleagues when the red pencils come out to crunch numbers and eliminate redundant positions.
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