Although it may not always make sense to promote internal candidates to the CIO position, Principal Financial Group CIO Gary Scholten believes companies can reap enormous advantages when a strong match exists.
"Because I had the opportunity to work in all our business units before becoming CIO, I had firsthand experience within the business itself as well as key technology areas," says Scholten. "Even though the technology has changed, most of the time I can relate it to something we've done in the past, which helps when dealing with the complexity of our business and technology."
Principal Financial Group is a global Fortune 500 company offering a range of financial products, life and health insurance, and banking services to more than 18.9 million customers worldwide. Scholten began working for the company 30 years ago after graduating from college. He started as an entry-level programmer and worked his way up the IT ladder, serving as CIO of multiple business units before being promoted to senior vice president and CIO in 2002.
"I am living proof of the ability to learn and move throughout the company," Scholten contends. "The fact I had IT experience in all our business units was important to my development, providing both formal and informal educational opportunities."
That experience has proven instrumental in helping Scholten steer the company's numerous IT projects and oversee an IT staff of more than 2,300 professionals. Of those IT employees, about 450 work in non-U.S. locations, primarily in India, Latin America, and Asia. Operating under a federated model, each of the company's seven business units has its own CIO who reports to Scholten as well as the head of their specific business group.
Under Scholten's leadership, The Principal has received numerous awards for technology innovation. Scholten attributes the accolades to a talented IT team as well as strong support from top executives.
Among the IT projects currently on Scholten's plate: developing solutions for the company's recently launched America Rebuilds campaign. As the country recovers from the recent recession, people are reassessing their own finances. At the heart of The Principal's campaign is an online hub that offers educational tools and videos, guidance from third-party advisors, and financial tips. To help financial advisors better meet their customers' needs, Scholten and his team also recently rolled out data analytic solutions and mobile applications with real-time compensation tools.
In addition, The Principal was one of the first companies to provide its clients with the ability to electronically submit U.S. Labor Department regulatory requirement forms for 401(k) plans. Scholten says the ability to submit these forms online gives the company a competitive advantage and was instrumental in winning over a new large client.
Other IT projects include analyzing employees' use of laptops and desktops, underlying applications, and operating systems in preparation for a companywide replacement.
"Over the next 2 1/2 years, we'll be replacing all of our employees' computers, so we're taking the time to step back and look holistically at what's the right way to leverage this opportunity," Scholten explains.
The IT department also is looking at ways to help The Principal become a greener environment by providing products and services online. "Rather than just deciding to no longer offer print documents, we're looking for the best opportunities to leverage technology in a way that provides additional value for our customers," Scholten says.
A third IT project is focusing on "right-sized high availability," which Scholten explains is identifying which applications need high accessibility and short recovery times and which have less stringent needs.
Scholten, who earned a degree in math and computer science from the University of Northern Iowa, joined The Principal in 1980. During his 30-year tenure, he has seen tremendous changes in both technology and the role of IT at the company.
"When I think back to the '80s and early '90s, IT primarily interacted with operations, customer service, and finance," he says. "Over the years, the role of IT has changed beyond that. Technology still plays a role in getting the most efficiency out of our business processes, but it's more integrated with the business, which has opened new constituencies for us to work with."
Sharon Baker is a freelance business writer based in Charlotte, N.C.