Shannon Gath, CIO, Teradyne: Restructuring the IT Organization to Become More Business Centric, Chief Information Officer, of Teradyne

As technology has become core to the business, CIOs and business technology leaders have become more deeply involved with the executive team in helping to transform the business and to act as enterprise change agents.

A good starting point for CIOs to execute on these goals is by making the IT organizations more business focused.

HMG Strategy Founder and CEO Hunter Muller recently spoke with Shannon Gath, CIO at Teradyne and an HMG Strategy 2023 Global Leadership Institute Mid-Cap Award winner about the steps she’s taken to make Teradyne’s IT organization more business-oriented along with her approach to talent development.

The following is a condensed version of their discussion:

Hunter Muller: Shannon, great to have you here today and congratulations on your award.

Shannon Gath: Thank you Hunter.

HM: When you think about the economic turmoil we’ve been going through over the past few years, it’s pretty amazing. How would you characterize your leadership style in this very turbulent time?

SG: I think first and foremost, I’m a great collaborator and partner with the business and I think you need to be. I think IT organizations in general have to be business centric.

One of the first changes I made when I joined Teradyne two years ago was to restructure the IT organization to be much more business centric.

Now, we have business relationship managers that are dedicated to each area of the business so that they understand exactly where each area of the business is going. They can also be a voice at their leadership table, trying to shape how we’re going to make the right technology and investment to build the capabilities that we need to be able to win with the organizational growth, managing through risk with the business.

That’s the style I have, that’s the style the rest of my team has and we’re very much one team and very much team oriented.

HM: I love the one team idea – one team, one dream, one vision. When you think of talent development and culture, what does it look like for you?

SG: Most people describe me as a little obsessed with talent management best practices. I’ve certainly had lessons learned throughout my career that I always said I would never let that happen again – meaning, not hire the wrong talent for what we needed and things like that.

I would say there are three areas where I put a lot of focus on. One is in recruitment, making sure that we have really robust ways to find the best possible talent to join our team. This includes dividing up competencies so that as we interview as a team, we’re not asking all the same questions and we have a really thorough evaluation of different candidates so we can find the best possible fit for the role.

When it comes to performance management, I would say I drive my team a little nuts, but my performance reviews of each of my direct reports are no less than seven pages long.

The focus I have is being well-rounded in feedback, meaning it’s not just about did they deliver on their goals. I talk with them about their biggest strengths that I see them demonstrate on a daily basis. I talk about opportunities that I see for them to continue to grow.

I talk about threats, things outside of their control that they should be aware of so they can successfully navigate a path forward. And then I make sure that I’m getting direct feedback. I solicit it for each of one of them in terms of how their stakeholders perceive their performance, how their peers measure their performance and then how their direct reports perceive their performance, because we all have responsibilities outside of our goals to develop our talent on the team to be that next-gen leader. They really need to be measured in terms of an overall performance.

In addition to performance management, the other area where I feel sometimes people forget to focus on is career development. In our IT organization, we now have formalized career development plans for everyone on the IT team, which is roughly 300 people. It’s based on a template I’ve developed over the course of my career based on learning. We make sure it’s really clear in that plan what type of work they actually find fulfilling and what kind of work do they hate to do so that it fosters a good opens a dialogue with their manager around how to set them up for success. What are their biggest strengths, areas for development, and short-term, mid-term and long-term goals? When we distill all of that information down at the leadership level, we can connect opportunities for growth to the right people on our team and make sure that we’re really growing them effectively.

HM: You’re known for being a transformational catalyst. When you came to Teradyne, what was your initial mandate and how is that roadmap going? How well are you tracking against that plan?

SG: There was a good fit between what the leadership of Teradyne was looking for from their IT organization and the experience that I brought. There were a lot of synergies around the idea of IT really isn’t meant to be a back-office commodity function, it’s meant to be a strategic enabler of the company. I worked, first and foremost, with the leadership team to codevelop with them the value proposition of IT; it’s different now and it’s about working in partnership to harness the power of digital technology for competitive advantage of a company.

Then having a business-centric IT strategy, so we took a ton of time when I first came to Teradyne to deep dive into how the business was going to grow, by how much, what kind of capabilities they would need to build over the course of the coming years to enable that kind of growth, and how did that translate to technology investments. I’d say the hardest part about that was prioritization. I applaud the leadership team at Teradyne because they were open to thinking about it differently and they have welcomed the business relationship managers to their leadership team to have a seat at the table.

HM: How much time do you spend on cyber with your CISO?

SG: I would say the partnership between the CIO and the CISO is one of the most critical partnerships. The risk to companies today around the evolving threat landscape is one of the top risks every company is facing. You really need to have a strong partnership there, you’re much more board-facing than you ever were, and you have to make sure you have a robust strategy to preserve not only protecting your assets as a company but having the resiliency in the wake of a negative event because they’re becoming much more prevalent. And making sure you don’t have any blind spots and that all business and key roles in IT are delivering to that level of resiliency and protection. It takes everyone.

HM: One last parting thought: what kind of career advice would you give people?

SG: Let me first start by sharing the worst advice I ever got: Compartmentalize work and home life. Which I found doesn’t allow you to ever really be you true self. It was really hard to build deeper relationships with people, so showing up as your authentic self takes guards down and helps build the trust that ultimately leads to success.

Shannon Gath will be a featured speaker at HMG Strategy’s 2023 Boston CIO Executive Leadership Summit on September 6. To learn more about this summit and to register for the event. click here