The CIO On The Boards Of Southwest Airlines And Fossil Group
Tom Nealon has achieved some of the highest heights in the IT world without ever having been trained as a technologist. He studied business at the undergraduate and graduate levels, and he credits his natural tendency to think about business value ahead of technology as a key to his success. He was the CIO of Frito-Lay, Southwest Airlines, and J.C. Penney. He added such substantial value in his role as CIO at J.C. Penney that he was asked to take over a variety of other functions, including the company’s digital business and corporate strategy. It was also during this time that he was asked to join the boards of Southwest Airlines and Fossil Group.
Interestingly, Nealon claims to have never had the ambition to become a board-level CIO. He always focused on the tasks he was given, stretched them to ensure that a higher than expected degree of business value was generated from the IT function, and in the process more opportunities presented themselves.
(To listen to an unabridged audio version of this interview, please visit this link. This is the seventh article in the “Board Level CIO” series. To read the prior six articles, please visit this link. To be alerted when future articles in the series are released, please click the “Follow” link above.)
Peter High: Tom, you have a deep and rich background as an IT executive and as an advisor to many companies. You were a CIO multiple times over, spending time as CIO of Frito-Lay, the Feld Group, Southwest Airlines, and of J.C. Penney. Please provide an overview of your career journey to date.
Tom Nealon: My career in technology began in 1983. I’ve been in every part of the IT operation, from the help desk to application development to engineering up through leadership. I’ve gathered a really broad perspective of IT can and should work. I was blessed in working for companies early in my career that emphasized providing a broad set of experiences for employees.
I spent several years in the Frito-Lay planning and strategy areas which was such an eye-opener for me, and it was just a huge jump start to my career. It was at that point that I really figured out that I’m not a technology guy. I am a business guy who happens to specialize in technology, just like a Marketing person is a business person specializing in Marketing. So I quickly pushed aside the label that I’m the “IT guy” and I really absorbed and worked on being viewed as and being part of the business team. That seems simple and obvious but it really defined how I worked, behaved and led an organization in terms of the vision.
A nice outcome of this was that I had the deep knowledge of what goes on behind the curtain of IT both in terms of technology and operational decisions. From the other side, I also understood how the business functions. That included understanding of the company’s profit and loss mechanics, and driving profitability for the company.
From there I joined the Feld Group where Charlie Feld and the team focused on IT transformations already solid, large companies. So for about five years, I was a Feld Group member but also the operational CIO for Southwest Airlines starting about a year post-9/11. It was a difficult time for airlines but also an important time for airlines due to the massive shift in the industry with new security requirements, TSA, airlines going bankrupt, airlines merging. The cost advantages Southwest historically enjoyed were diminished as a result. Thankfully, the company found new ways to thrive, as it continues to today.
Then, I went to J.C. Penney to work with Mike Ullman as the EVP and CIO and within a year or so additional responsibilities were added like JCP.com, the corporate strategy planning team, consumer insights and actions, and all things digital. It was a different perspective; it’s one thing to understand how a business works, understand the P&L but it’s another thing to own the P&L and be accountable for the results. With Southwest, with probably around 80% of its revenue generated through online booking, I gained a great appreciation for the online booking engine and strong Digital Marketing capabilities. It was the same for me at J.C. Penney. Part of running a big dot-com business is not just understanding the operational side, but I had to get very close to the Digital Marketing area and the technology associated with that, as well as the analytics of how you actually run a website.
Additional topics covered in the article include:
- Tom I find it very interesting that your degrees, both at the undergraduate and graduate level are in business administration and so you didn’t come to the IT department as a technologist, computer scientist or engineer. In some ways you were rooted in the very disciplines that you were talking about – you saw the world with a business lens. You mentioned at the outset that you had some very technical roles in IT departments before climbing the rungs to the CIO role, what was it like to learn IT without that traditional educational background?
- I want to actually linger on some of the responsibilities you mentioned at J.C. Penney. I think it’s fascinating that, as your role aggrandized there, you took on some of the natural roles for a talented IT executive but you also listed corporate strategy as one of your responsibilities. Can you talk a bit about the rationale for you to take on the responsibility of corporate strategy at J.C. Penney?
- I want to move on to the expansion of your responsibilities outside of the organizations as well. While you were an IT executive you were asked to join the boards of multiple organizations. You joined the board of Southwest Airlines while you were still an executive at J.C. Penney, for instance. Can you talk a bit about that experience; why it was they invited you with your specific background to join the board?
- You also later joined the board of Fossil. Can you talk a bit about your decision to join that Board and again the benefits that you’ve accrued? This time an industry that you’d been involved with but not a company you had been involved with up to that point.
- As you think about your journey and you think about having been both an IT executive and simultaneously a board member, are there aspects of your experience that you would tell others to possibly follow in order to achieve the same things? For those CIOs who are ambitious enough to want to join the boards of organizations, what kind of advice would you have for them?
- What do you think CIOs can lend to boards?
- Having advised a great number of Chief Information Officers, are there different aspects that you think have held back CIOs from being on board positions relative to other C-level officers of companies who’ve been more traditionally those who populate boards?