JetBlue and DuPont have moved technology operations under sales and marketing divisions. Can chief information officers live with this arrangement?
What did Jeff Cohen do when he learned his company was planning to have its technology department report to sales and marketing?
Cohen, the former chief information officer for JetBlue Airways Corp., left the airline last July, after learning that the technology department would shortly begin reporting to Tim Claydon, the companys senior vice president of sales and business development. Claydons primary technology experience included managing JetBlues Web site, which accounts for 70% of the airlines bookings.
Cohen had reported to JetBlue chief executive David Neeleman and chief operating officer David Barger. In January, JetBlue named Todd Thompson as vice president, information technology, reporting to Claydon. JetBlue declined to comment.
"I left because I knew I didnt want to report to sales and marketing," says Cohen, now chief executive of Vertical Software Group, an aviation-software startup based in North Caldwell, N.J. "If you are used to reporting to the CEO and COO, its hard to report to someone who was your peer."
Cohens not alone. Other technology executives may need to consider the possibility theyll be reporting to sales and marketing in the future. Some smaller companies, such as Philadelphia-based collaboration-software firm Mindbridge, are already set up that way.
And E. I. du Pont de Nemours and Co. reorganized in January to put
the chemical companys technology departmentwhich had reported to the operations and services divisionunder the auspices of John C. Hodgson, DuPonts recently named chief marketing and sales officer. Hodgsons charge is to streamline processes to drive sales and customer service, DuPont said in a statement. The company otherwise declined to comment until the reorganization is complete in the spring.
Though its possible a company can get closer to its customers by melding sales and marketing know-how with, say, a customer-service implementation, critics of this arrangement say a single function of the company shouldnt have domain over the whole technology staff.
The long-term fallout can be that sales and marketing will hog available project funds, leaving infrastructure upgrades, financial systems and logistics improvements behind.
Then there are cultural issues. Technology managers dont want to report to sales and marketing executives because they want a regular audience with the CEO and involvement with corporate strategy, say recruitment firms.
"I dont think theres any benefit to this arrangement," Cohen says. "If anything, its bad. A company does more than sales and marketing.... There are a lot of businesses within the company that need information technology."
Its too early to say whether the recent JetBlue and DuPont moves represent the beginning of a trendanalysts from research firms AMR
Research and Gartner note they havent heard of other sales- or marketing-led technology departments. Nevertheless, there is some historical precedent.
Fred Held, who served as Mattels chief information officer from 1968 to 1978 had a three-year stretch between 1973 and 1976 where he reported to a sales-and-marketing executive. Held, who left Mattel in 1987 after a 24-year tenure at the toy maker, says the company viewed technology as a tool to combat rival Hasbro as early as 1973.
Held was put under sales and marketing to build what today would be recognized as a supply-chain management and enterprise-planning system. The system, dubbed simply an "integrated system," was custom built in the COBOL programming language because there was no such thing as off-the-shelf software at the time.
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The business goal was to become a partner to retailers via better inventory tracking and plans for retail shelves. According to Held, the system could network with retailer systems to enter and track the status of orders, and could also manage marketing promotions with partners such as McDonalds and Burger King.
The corporate structure didnt keep the company from making technological advances. "I reported to sales and marketing when Mattel built one of the most innovative systems around at the time," says Held, now a partner at Atlanta-based Tatum Partners, a consultancy and executive-for-hire firm.
Before reporting to sales and marketing, Held had reported to Mattels president. Held says he didnt view the switch as a demotion largely because he considered himself to be more than a technologist. Before being named chief information officer, Helds background had been industrial management. "I hired a CTO for the technology skills I was lacking," says Held, who even became chief marketing officer later in his Mattel tour of duty.
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