Rob Lux’s Pathway From CIO To COO To Co-CEO Of Cenlar

Rob Lux had accomplished his primary professional goal when he reached the role of chief information officer of Freddie Mac in 2010. He had spent his entire career in technology at companies like IBM, EDS, and GMAC Mortgage Services. The ladder he was climbing had the “CIO” label on the top rung. After seven years as CIO of Freddie Mac, he took on the CIO role at Cenlar, the leading mortgage sub-servicer in the United States. Then, after two years in role, a strange thing happened, a new ladder presented itself. Rob Lux became chief operating officer of Cenlar in 2019. Success as a CIO translated into an invitation to do more in a broader role. That said, Lux felt like a fish out of water when he was tapped for the expanded role. “Frankly, I felt a bit like Harry Truman must have felt when FDR passed away,” said Lux with a chuckle. “I was thrown into the role a bit. I had never been a COO, so I really had to lean heavily on the former CEO Greg Tornquist and other leaders here, and they provided enormous help and supported me during the sometimes painful transition. They helped me learn about the business where I didn't really understand certain things. They helped me make the best decisions possible.”

Lux had reported to the CEO at Freddie Mac and at Cenlar, but at Cenlar, he developed a special relationship with the operations team. “That [relationship] allowed me to naturally absorb what they do and get a better feel for the business and what their challenges were,” said Lux. “When the former COO departed, I guess I was the obvious choice because I had an end-to-end understanding of both the business and how technology could enable the business.” This is a profound point that should lead to more opportunities for CIOs to rise to the CEO position. The end-to-end understanding of the business operation is a strategic advantage that ambitious CIOs should recognize and take advantage of. “It's very similar to how CFOs are able to see all parts that contribute to the overall business, which is probably why so many CFOs in the past were promoted to CEO,” Lux speculated. “In today's world, especially in financial services, technology plays such a key role. A lot of CEOs I've worked for have said. ‘We're really a technology company masquerading as a financial services provider.’” To truly live up to that mantra, having a leader who has extensive digital savviness and experience would seem to be a logical choice for the top post.

Those financial services companies need to leverage technology to digitize their businesses and provide consumers with the experience they've become accustomed to. This one-click interactions versus having to go through a litany of paperwork. Coming up the ranks of technologies really helped me learn to identify areas where we can deploy technology to enable the business.

For much of the second half of 2022, Lux served as an interim co-CEO of Cenlar. The other co-CEO was Jim Daras, who has taken over as the sole CEO since December 22, 2022. When it was split, Daras was responsible for financial planning and analysis, accounting, bank operations, treasury, but he's also responsible for risk and audit. Daras has extensive experience in financial services, and he also served as a risk officer earlier in his career.

Lux’s pathway up has been aided by board acumen and a strong working relationship with the boards of Freddie Mac and at Cenlar. At both companies, he established a board technology group, opening a channel to those board members who were open to having more regular updates on key projects, developments from a cybersecurity perspective, progress made against performance metrics, and the like. At both places that I've done this, [the board technology group] evolved into what is a formal board technology committee,” he noted with pride. “We've got one here now, it's chaired by one of our board directors. Our chairman is on that technology committee and it's now a formal thing where they go through, and they make sure that we're discussing technology-related matters. Technology's the key. You need to make sure that you're talking about things that are transforming the organization but also some of the things that you're doing to defend the organization against cybersecurity threats and other threats that are out there.” Lux surmises that by establishing a strong dialogue and engineering trust with the board, it made them more comfortable in naming his as co-CEO of Cenlar for a time.

So how does he think about the relationship with his successor as CIO, Steve Taylor? He said while laughing that Taylor is not averse to blaming his predecessor for any issues he identifies. They have built a strong rapport by being colleagues across stints at GMAC Mortgage and at EDS. In fact, when Lux put together his first technology strategy at Cenlar in 2018, he met with Steve Taylor, who worked as a consultant at the time, to get his thoughts on it. The richness of his feedback reminded Lux how valuable a colleague Taylor was, and when Lux needed a successor as CIO, it was a natural fit. Lux gives credit where credit is due as he rattles off one of Taylor’s major accomplishments. “We've migrated all of our technology to the cloud,” he said. “We are probably one of the few banks that could say that…That journey to the cloud has helped us get the ability to raise the game in terms of the tools that are available to us.” He believes that Cenlar has a better technological foundation; one that is modern and better to build upon for the future.

Though Lux has returned to the COO role at Cenlar, his holding both that title and the interim co-CEO role highlight all that is possible for CIOs who fully understand the strategic perch the role entails. The lessons he offers to others to follow in his footsteps should be noted by all who have the ambition to do so.

Peter High is President of Metis Strategy, a business and IT advisory firm. He has written three bestselling books, including his latest Getting to Nimble. He also moderates the Technovation podcast series and speaks at conferences around the world. Follow him on Twitter @PeterAHigh.