An organization’s leadership is the leading indicator of overall staffing proficiency.  For technology divisions, this includes both the management team and technical leadership.  The measures used to perform this evaluation are job qualifications and depth of expertise.  These are assembled through interviews and professional biographies of the leadership and technical experts.  The premise here is pretty simple, at face value, is the IT leadership competent to hold the positions they have?

This exercise is similar to what a recruiter would do when matching candidates to open positions. It starts by evaluating prerequisite experience and credentials to hold the job. A CIO, CTO, or director should have so much experience in terms of time, relative industry certifications, and underlying academic credentials. If the CTO was selling mortgages 3-months ago and happens to be the CFO’s brother in-law, you have a problem – And, yes, it happens!!

Technical staff must also have the ‘appropriate’ technical aptitude.  Depth of expertise and division of functions should be proportional to organizational size and complexity.  The larger the organization, the more focused and greater depth technical expertise should be.  Conversely, for smaller organizations, technical staff’s abilities should lean more towards general experience and skills.

By evaluating both the management team and lead technical resources, conclusions about the IT origination can be drawn. If management and technical skills are appropriate for the size of the organization, it’s a pretty good indicator of a healthy organization.  Outliers are of course fine and to be expected, they turn up in every due diligence, but they shouldn’t be the norm.  If there is a large deviation from expectations, it may indicate organizational or staffing defects that require further investigation.

During a fast passed due diligence assessment, this technique can be done quickly, usually with the information readily available.  Further, by producing a matrix outlining expected and found leadership characteristics for the due diligence report, this assessment approach is also quantifiable and fact based.

Check back for future postings, as we continue to explore the IT Due Diligence Focus Areas