In a world driven by increasing developments and advancements in technology, your business’s ability to maintain a competitive advantage rests on the quality of your technology leadership. Usually, “technology leadership” revolves around the Chief Technology Officer (CTO).
However, a lot of businesses fail to understand the CTO role, and it is often the least defined role in the C-Suite.
As a result, CEOs and boards often don’t understand or confuse the CTO’s role when they are looking to hire one. Yet, given that a lot of the business’s competitive advantage rests on whoever is hired, they should know what to expect from CTO’s.
The dizzying speed of technological change makes it critical for companies to stay ahead of fast-changing trends, and anticipate disruptions to their business model.
Technology is changing the rules of business: from products and services to business models and processes. This article will deconstruct what a CTO does, what skills they need, how they work with other technology leadership roles, and the traits of a great CTO.
What is a Chief Technology Officer (CTO)?
In simple terms, the Chief Technology Officer is the executive responsible for managing and driving value from technology within an organisation.
The role can differ from company to company but usually includes everything from:
- Technology vision and strategy
- Software development
They need to be able to understand broad technology trends and have the business knowledge necessary to align technology-related decisions with the organisation’s results and objectives.
Depending on the size and focus of the company, the CTO position can overlap and interact with other senior technology roles such as the CIO (Chief Information Officer) or CDO (Chief Digital Officer). But often the CTO is the most senior role and reports directly to the CEO (Chief Executive Officer).
Regardless of the company, the CTO role is usually where the technology vision and strategy critical to developing or enhancing a company’s products or services are developed.
However, more recently, the expectations and job description of a CTO have changed; and they have become more externally focused on technology propositions for customers.
So as well as being an expert technologist, they are the external face of the technology offering.
This leaves the CIO to concentrate on more internally focused technology and systems.
The Chief Technology Officer is the executive responsible for managing and driving value from technology within an organisation
What are the Chief Technology Officer’s key responsibilities?
The role of the Chief Technology Officer is complicated, and every CTO will have their own unique strengths to bring to the table. But one thing is for sure, they need to have their finger on the “technological pulse,” and remain aware of new trends and technologies that could disrupt their business.
The CTO role has been around for decades but still, the role is fairly vague and varies a lot across industries and different organisation sizes.
CHIEF TECHNOLOGY OFFICER’S KEY RESPONSIBILITIES
That being said, there are some similarities across CTO job roles and specifications:
The most important role a CTO has is to use technology to generate value for a company and help it achieve its business objectives. At their core, they must develop a technology vision and strategy that will allow the company to thrive and build a solid competitive advantage.
A lot of technology leadership is about strong communication and influencing. The CTO needs to communicate technical goals to non-technical employees and make them enthusiastic about the possibilities it offers.
Chief Technology Officers need to hire, build, grow, and develop high-performing technical teams. Building a culture where technical people can thrive and build their careers.
An important part of technology leadership is developing cultural values, ethics (important in AI models), inclusivity, diversity, and addressing gender pay gaps.
They will have to design a pragmatic operating model, working out how to structure their teams for maximum effectiveness, knowing what to outsource and what to insource in to get the best return on their technology investment.
The responsibilities in technology leadership may include:
- Developing a compelling technology strategy and vision.
- Understanding how technology can achieve company objectives (and how to utilise it to do so).
- Representing the technology team in the C-suite.
- Building, hiring, and developing elite technology teams.
- Creating an amazing tech culture with a good reputation.
- Organisation design and operating model.
- Mergers and acquisitions.
Governance plays an important role in any CTO role. It is important that technology investments are governed well, policies and principles are set and resources are well managed.
Almost every CTO will need to manage a large portfolio of projects and balance a range of stakeholders. At the same time, they will need to build an inspiring technology roadmap.
Architecture is a core part of the CTO’s remit, and this, combined with policies and principles, form the foundation for the company’s technology governance.
On top of all this, the CTO you hire should have solid financial skills – as they will need to frequently assess and ensure technology investments generate are on track to yield a strong financial return – they will also need to know to budget effectively for the organisation’s technology needs.
Responsibilities in technology governance include:
- Portfolio management.
- Technology road mapping.
- Establishing policy and principles.
- Working on a technology governance board.
- Budget and finance management.
- Managing technology resources.
Innovation and R&D
CTOs need to evangelise technology in order to inspire people inside and outside the company and drive change where necessary.
They always need to keep an eye on emerging technology trends, use customer intelligence, watch competitors, and the external market. All of this insight should be used to drive business model innovation well before the company can be disrupted by competitors.
Because the CTO is the public face of technology for the company, they need to display their technical prowess and insight to the business, customers, and external stakeholders. This is important for attracting talent, getting the best from vendors, and driving valuations with investors and analysts.
A lot of innovation will come through strategic partnerships with start-ups, vendors and technology companies. Having an ecosystem of partnerships is a great way to de-risk and accelerate innovation.
Innovation and research and development areas could include:
- Technology evangelism.
- Advising on emerging technology trends.
- Business model innovation.
- Strategic partnerships.
- Effective stakeholder communication and influence.
In business, the area of product development is encouraging innovation, while building new and developing technology products for customers. The CTO’s is the public face of the technology team, so should be indicating how this technology can make their customer’s lives better.
In addition, you should expect them to work as the technology partner to the Chief Product Owner (CPO) to develop new technology-enabled products, and doing so will improve revenue and sales opportunities, whilst also enhancing the company’s brand.
A modern CTO needs to be well versed in UI/UX design, user research, agile, DevOps, and cloud-based software development methods.
Responsibilities in product development include:
- Software and product development.
- UI, design, user research, testing, DevOps.
- Developing world-class software teams.
- Partnering with the Chief Product Owner (CPO) to deliver amazing products.
- Technical support for customers.
Business IT is about driving core technology investments that underpin the business operations and making sure that budgets and systems are managed well.
Managing business IT systems such as ERP, finance, and CRM has always been at the core of the Chief Technology Officer’s role. For decades businesses have depended on enterprise core systems to run and operate their businesses.
As businesses look for efficiencies, the role of Robotic Process Automation (RPA) and other process digitization has become a core and influential part of business IT.
A key part of this area is working with software vendors and partners to ensure that service levels are maintained and any new features are delivered safely.
Areas of business IT could include:
- Core business systems and infrastructure.
- Digitizing business operations.
- Technology operations and support.
- Devices and hardware.
- Security and compliance.
- Managing technology vendors and partners.
What skills and backgrounds do Chief Technology Officers have?
A CTO is a technologist first and everything else second. As a result, most CTOs have worked a technical or engineering role at some point in their early careers.
In fact, having a technical experience is seen as essential to understanding the nuances of technology strategy and delivery – and if you’re looking to hire a CTO, you should expect them to be skilled in these fields.
According to salary research specialist, PayScale, popular skills for CTOs include expertise in:
- Software architecture,
- IT management,
- Product development,
- And project management.
However, CTOs also need an ever-broader range of knowledge of emerging technology, so should be proficient in areas such: as digital products, design, technical trends, and research and development (R&D).
Because a CTO needs to work with the CEO on strategy, and also advise other members of the C-Suite they should have broad business expertise, especially if they want to be credible at all levels of the company.
In terms of qualifications, many organisations require an advanced degree such as an MBA, as the role involves a great deal of complex financial, business, and management skills. The vast majority of high-profile CTOs have a computer science degree or engineering degree but that is not a prerequisite.
The types of Chief Technology Officers
In 2019, Gartner developed several CTO personas based on analysis from a large CTO study, as well as CTO profiles and job descriptions. They found that it is important to know which CTO an organisation needs and where any gaps can be filled by other technology roles.
CTO as Digital Business Leader
This persona is focused on leveraging innovative technologies to transform the business model, products, and services.
It relies on a deep understanding of technology and technology trends, combined with insight into how competitors are leveraging these technologies to innovate.
This requires the CTO to “push” technology toward the business to help them innovate, and to do so, the role should hold a high executive position, and the CTS should have high levels of visibility in order to communicate this technology up and down the chain of command.
This CTO is responsible for creating the company’s digital business technology strategies, along with leading the teams that will architect the required digital platforms. Often, CTOs adopt this role in industries that have been heavily disrupted such as retail, technology, media, and banking.
CTO as Business Enabler
This role type is commonly found in organisations where technology underpins the business model and where technology must be highly responsive to the business.
Good examples of where this persona is found are telecoms, healthcare, and aerospace.
This profile is focused on optimising and maintaining technology that supports the business model and operations. They are responsible for maintaining the existing technology estate across the business and IT, including business applications, transactional websites, operational technology, and employee devices.
They will need to take charge and lead research and development, innovation labs, and their team of product engineers.
CTO as IT Innovator
This persona is a technology visionary and change agent for IT. They provide leadership to groups that include enterprise architects, innovation managers, expert technology specialists, shared IT services.
They are often very technical and may hold the head of architecture position to guide the architecture of the IT innovations.
These CTOs usually report to the CIO, rather than holding an executive-level position and reporting to the CEO.
CTO as COO of IT
This type of role is commonly found in organisations with large technology teams focused on the day-to-day running of IT.
It is found in businesses that do not look to the technology teams for thought leadership. Again this role will often report directly to the CIO, which frees the CIO up to be more of a business strategist.
Their primary role is to meet the agreed delivery of IT services (such as cost, timing, functionality, and scalability) for core systems.
They will own the procurement of both technologies (such as systems, applications, and tools) and technology services (such as cloud, consulting, and outsourcing) and manage large-vendor relationships. They often lead efforts to plan and manage a data centre consolidation, cut IT costs, implement platforming solutions, or support business process optimisation.
Which teams should report to the Chief Technology Officer?
What’s the difference between a CIO and a CTO?
The difference between the CIO and the CTO depends on the size and the type of your business. A small company is likely to only have one joint CIO and CTO role, whereas bigger businesses tend to have both – and that’s when things get complicated.
In companies with both a CTO and CIO the traditional split is that:
- The CTO is more externally focused on technology propositions for customers. The CTO, as well as being an expert technologist, becomes the external face of the technology offering.
- CIOs, on the other hand, are more focused on the needs of internal business users. Aspects such as core operations systems, process automation, data, end-user computing. The CIO ensures the internal users get the best technology to run the business.
The next question is who is more senior the CTO or the CIO? There are no hard and fast rules, sometimes the CTO reports the CIO and sometimes visa versa. In some work environments, they are peers, and both report to the CEO.
Usually, in companies where technology is a core part of the customer proposition e.g. technology-led companies, software companies, eCommerce, the CTO is usually the more senior role.
In recent years, technology leadership has got even more complicated, and a host of new executive-level positions have been introduced – such as the Chief Digital Officer (CDO) and Chief Data Officer are becoming more and more popular.
In my opinion, an organisation operates better when there is a single leader who responsible for all of the technology – because there is often friction when the CTO and CIO are peers. In a world where technology is core to customer propositions, it is the CTO, who should be the most senior technology executive.
Does the size and type of company impact the role of the Chief Technology Officer (CTO)?
The size, type, and maturity of a company can have a huge influence on the role of the CTO.
In smaller and more early-stage companies the, CTO has a more hands-on technical and engineering role. Many startup CTOs are the ones coding and working with the product owner to get the first product quickly to market. They will wear multiple hats and will require the hands-on experience of a range of skills including development, DevOps, risk, governance, and security.
FACTORS AFFECTING THE CTO ROLE
By comparison, the CTO role in a huge listed company is more about evangelism, choosing the right technology trends, and being the face of technology for the customers. In large organisations it’s common for the CTO to have little experience in, and new to working in a technical position.
A startup CTO is not often the right fit as the company grows into becoming a much larger company because the CTO skillsets between a startup and large company are so different
Factors affecting the CTO role include:
- Industry sector (high tech or low tech)
- Size of the organisation (small or large)
- Company maturity (start-up or mature)
- Products and services (software or physical products)
HOW CTO ROLE CHANGES DEPENDING ON COMPANY SIZE
How senior should the CTO be and who should they report to?
Regardless of the size, type, or maturity of the organisation, the CTO should be the most senior technology role in the business. They should hold a senior executive role, and report directly to the CEO.
It is a common anti-pattern to have the CTO report to the CFO (Chief Financial Officer) or CMO (Chief Marketing Officer). The reason being that technology is more than just costs or marketing, it is a holistic role that enables and boosts business performance.
As mentioned previously, it is beneficial to have a single technology leader who is responsible for all of a business’s technology.
Having multiple technology executives as peers creates the wrong behaviours and often creates unnecessary friction. Due to the importance of technology in the modern business environment, it is the CTO who should be the most senior technology executive.
With the emerging trend of the Chief Product Owner who is responsible for developing a company’s products, their partnership with the Chief Technology Officer has never been more important.
What makes a great Chief Technology Officer?
The CTO has some of the most diverse and wide-ranging success KPIs of any C-Suite role.
These success metrics can also vary depending on the type of CTO role. For example, an innovation-focused CTO might be measured on their product innovation, whereas an operation-focused CTO might be measured on defects or P1 incidents.
CTOs must have technical acumen — but they must have strong business acumen and be able to show how technology helps achieve business objectives. They need to be the champion of the technology vision and be able to execute it well. If their role involved innovation they need to have strong engagement and influence with other senior executives.
And they need to do all of this whilst being culturally compatible with their organisation.
Gone are the days when a new CTO spends the first six months getting to know the business. They now need to hit the ground running and deliver value quickly in a fast-moving business environment.
The CTO role is very strategic, it involves setting the vision, influencing stakeholders, negotiating budgets, agreeing resources and developing cross-department collaboration. The best CTOs stay at this strategic level and resist the temptation to be operational. This can be hard as many CTOs have come from a technical background and love to get into the operational details!
In my eyes, the ultimate test of a great CTO is whether they can illustrate how technology helps drive the Enterprise Value of the company they work in. If they can do that effectively then their role should be deemed a success.
Building an Office of the CTO (OCTO)
The CTO is a fairly solitary role and as we have discussed a CTO has to wear many hats. Therefore, it is important to create an Office of the CTO (OCTO) so they can delegate some of their strategic thinking to enable greater bandwidth.
Keeping on top of technology trends and working out where to place big bets is a time consuming process. The OCTO provides additional leverage to the CTO, allowing them important time to think and formulate strategy.
The future looks bright for Chief Technology Officers, as technology becomes more and more critical to business and enabling client propositions the CTO role will only gain in stature.
Increasingly CTOs are moving beyond the realm of traditional business technology and into product development, innovation, R&D, and enabling the future success of companies.
- Chief Technology Officers are the most senior technologist in a company tasked with utilising technology to drive business value
- The roles and responsibilities of CTOs are the least well defined of the C-Suite and can vary by industry, company size, and company maturity
- Most CTOs are responsible for a broad range of activities — including technology strategy and governance, business systems, technology innovation, and product development
- Being a CTO is about connecting the technology with the vision and business goals and making sure the two matches.