Chief Technology Officer. Does your business need a CTO?
Many start-up founders, and sometimes also managers of established companies, have a limited understanding of the role of a Chief Technology Officer, or a CTO.
They are not sure what a Chief Technology Officer does, why and if they need one, and if a CTO would add (and specifically what) value to their business.
Or, especially in the case of tech start-ups, they might have been told they needed one, but believe that they cannot attract or afford the right expert at the moment, and try to manage without until they get to a later stage.
Who is a Chief Technology Officer (CTO) and do you need one?
As usual, it depends on your situation, but in most cases the answer is likely to be a ‘Yes’.
In this article I discuss the responsibilities of a Chief Technology Officer, and the benefits of having one on board – so you can decide for yourself. I’ll also outline some other alternative titles that are used to describe technology leadership roles, and how they relate to a CTO.
Before getting into the specifics of a Chief Technology Officer role, let’s quickly address the confusion surrounding it, and start by saying that, as with many other roles, the responsibilities of a CTO vary and the remit is different across different companies. This depends on the area of the business, its specific needs, the profile of the person hired for the role, as well as the personalities, qualities and relationships of the CTO and the other members of the executive team.
Most importantly, as with all the other executive jobs, outside perhaps the most strict and structured companies, the technology leadership role is to a large extent what an individual person makes of it.
There is no one standard definition of the CTO role, and certainly no one size that fits all
Next on the list of factors contributing to the confusion, is a lack of a single well established source of education that would precisely define all the roles and responsibilities across an organisational chart.
In my consulting work I was asked tens of times by founders to explain the titles and help them plan the right organisational structure and responsibilities for each of the positions.
Unless one attended an MBA course, the acronyms such as CEO, CTO, COO, CDO, CIO, CMO, CPO, and others, sound a lot like cryptic names of robots from Star Wars (especially the C(3)PO, right?) For me personally it was years in my first job before I got a good grasp of the who was who in my company.
Then we have the fact of the ever changing nature of the technology and business functions in organisations. What was the typical role of a Chief Technology Officer in 1999 may be very different today, and some of the other roles listed above did not even exist back then.
Multiple meanings of the same acronym
But this gets worse.
Let’s take for example the CDO. Not only this role is relatively new, but it may be used to denote at least two very different functions: Chief Digital Officer and Chief Data Officer. Both with the same acronym (!) Mad.
What is even madder is that often one or both of those roles fall within the remit of a CTO, especially in smaller companies that cannot afford to have a dedicated expert for every role.
It is a bit similar with the CPO, which can stand for the Chief Product Officer, or Chief People Officer. The first of the two CPOs also sometimes falls within the responsibilities of a CTO.
This confusing situation repeats with the CIO, which sometimes stands for the Chief Information Officer, and at other times the Chief Innovation Officer. Both of which can be separate functions, or part of the CTO remit. How much more complicated can this get?
And more importantly, what does a CTO, or CPO, or CDO, or CIO, or whatever CxO do, and do you really need one?
As said before, it is likely that you do. At least one of these. This is because a lack of clear and deep understanding of tech, and strong technology leadership, will almost certainly lead to underperformance due to mistakes and missed opportunities.
The perils of not having a CTO
The lack of understanding of the Chief Technology Officer role impedes the ability to make good decisions by start-up founders, as well as non-tech managers and executives in more established companies who are involved with developing technology within their organisations.
If you fail to understand the importance of the technology leadership role, and decide to continue to operate without a competent technology expert, you are setting your business up for a loss.
How? In a number of ways.
- You don’t know what you don’t know, and so cannot plan effectively when it comes to designing your technology strategy, innovating with business models, digital products and services.
- You lack insight and foresight to capture new opportunities and to avoid the risks related to changes of the market and new technology trends.
- Because of your lack of relevant experience and expertise, you are equally ill equipped for the task of building and leading technical teams, or finding and managing outsourced partners to develop your technology.
To be successful with all those tasks, you need to understand not only the current technology landscape, but also the societal and technological trends, and be able to chart a reliable path to where these converge with your strategy at the right point in the future.
Otherwise you are risking being too late to any party, or arriving at a destination that looked promising when you set off a number of years prior, but is no longer the right place to be when you get there.
A good CTO can help you navigate uncertainty, thanks to experience
Things are getting easier once you’ve seen certain situations over and over again, developing over time, and can anticipate and manage problems. This takes many years of experience.
Deep understanding of technology, product development dynamics and trends lets you maximise your opportunities.
As technology is a vastly complex and ever expanding field, no person who isn’t primarily focused on it, can follow it and be expected to lead an organisation reliably towards technological excellence.
Trying to navigate the uncertainties on your own may not work, or may lead to suboptimal results. It is my strong conviction that, whether you think you do, or can afford to create this role at present, you do need a Chief Technology Officer.
Otherwise you are at a high risk of saving pennies at the expense of thousands or millions of Pounds of unactualized gains, or actualized losses.
So what does a CTO do exactly?
Chief Technology Officer does several things. As previously said, the remit depends on each specific organisation, with its particular industry, plans, ambitions, needs, structure and stage. Generally a CTO performs all of the following six roles, and sometimes also a bonus role #7.
- The most important role by far is the involvement in developing the business strategy, where it concerns, or if it is at least partly based on, technology. Which in modern times, for all but the smallest of businesses, means practically always.
This is what I like to call the big Why of any digital transformation program or project, and it concerns the business model, innovation plans, future of products and services, your position in the market, channels of engagement with your customers, and many other factors that determine the need for technology development.
- The second most important role is determining the What, which is the answer to the needs resulting from the Why. The What concerns the specific actions that will need to be taken to satisfy the Why. It is the answer to the question: “What are going to do about it?”
It may mean “What do we want to develop?”, as in a product or service, or “What changes are we going to make to our business model and operations?” The range of the possible meanings of What is broad, and naturally flows from your business and technology strategy.
- The third role, which is more on the execution side, is selecting and implementing the How. This means deciding “How specifically are we going to go about developing the What”.
The How has many aspects:
- Do we build an internal team or outsource?
- Do we use this technology stack or another?
- Do we use Agile methodology, Waterfall, or a Hybrid?
- Do we buy a COTS (Commercial Off The Shelf, i.e. ready to purchase) product, build on someone else’s framework, or start from scratch?
- What is our Software Development Life Cycle (SDLC)?
- What about our Standard Operational Procedures (SOPs)?
- How do we organise our Quality Assurance (QA) and testing?
- Do we use Continuous Integration (CI) and Continuous Delivery (CD), i.e. DevOps?
- And many other practical questions and considerations.
Part of How is also the creation, maintenance and communication of the Technology and Product Roadmap, and the Implementation Plan.
- The fourth role is execution of the Technology Roadmap and the Implementation Plan.
This includes full responsibility for planning, building or sourcing the right development team, and management and monitoring of the development process (Technical Project Management).
This is a subject for a separate article.
- The fifth one is communication between the business and technology teams.
Chief Technology Officer is a conduit and translator, someone who can align the needs of both sides of operations, and ensure that everyone knows what they are doing and why, and has all the information required for their work and decision making. The important aspect of this role is also communication of technology plans to investors, and adding the validity, or gravitas, to your company with his or her profile.
- The sixth is the Leadership of the technology teams, but also technical leadership of the executive team at the Board level. So this is a leadership both up and down (and sideways).
Part of technical leadership is protecting the technical team members from uncertainty and disturbance, and ensuring psychological comfort and safety for the developers, so they can focus on their work.
This is important because development requires deep focus and uninterrupted state of flow to be performed efficiently. This is why it is best when developers are insulated from the day to day crises and dramas, and can follow a well established plan with their chosen methodology.
- Potentially, a CTO may also be responsible for the maintenance of the overall IT and ICT infrastructure, a role typically performed by a CIO (Chief Information Officer).
CTO vs Chief Information Officer
As mentioned at the beginning, some Chief Technology Officers have a much broader remit, or are focused on selected strategic aspects outside the maintenance of IT infrastructure, internal processes and development of new technologies.
In companies that are less innovative, it is usually the Chief Information Officer who looks after everything IT and is responsible for both the ICT infrastructure, and the optimisation of the internal processes with technology.
Sometimes this is part of the CTO role, or CIO is reporting to the CTO. At other times this is the other way around.
The role of CTO is primarily strategic, and focuses on management of innovation
Usually, the role of a Chief Technology Officer is decisively strategic, and includes management of innovations, risks and opportunities.
A great CTO is a true visionary, on constant lookout for new technologies, innovations, and changes that the business can take advantage of, or needs to prepare for. A technology leader is a catalyst and evangelist for change.
On the other end of the spectrum he (or she) helps to protect the company from pitfalls and is responsible for the management (identification and mitigation) of technology risks.
What about the Chief Digital Officer?
In more mature and larger organisations, part of this role with regard to digital and overall technology innovations may be fulfilled by a Chief Digital Officer and a Chief Innovation Officer, respectively.
The role of a CDO focuses mostly on areas where digital innovations concern the customers, as is the case for different digital engagement, communication and sales channels, including the websites, social media, mobile apps, metaverse, and so on.
CDO, when created as a distinct role, sometimes reports to the Chief Technology Officer, other times to COO (Chief Operating Officer), CEO (Chief Executive Officer) or to CMO (Chief Marketing Officer). Other times CDO works with the CMO, or CIO (Chief Innovation Officer), or reports to the latter.
And how about the Chief Innovation Officer?
Chief Innovation Officer (CIO) may take part of the CTO’s responsibilities and assume complete responsibility for the innovations, when it comes to new ideas and experiments.
He (or she) rarely has the authority to make any decisions without the authorisation from other decision makers, and this role is both narrower and less technical than that of the Chief Technology Officer.
A CIO is rarely concerned with the actual development of new technology products, more focused on the business and customer perspective, and is decidedly less technical than a CTO.
And Chief Data Officer?
Chief Technology Officer is sometimes also responsible for data operations and strategies, before a role of a dedicated Chief Data Officer is created. This may be especially the case if the CTO has a good grasp of the cutting edge Machine Learning and Artificial Intelligence (AI) technologies, and comes from the Machine Learning Engineering or strong Data Science background.
Normally though, these are such distinct areas of responsibility, both quite huge and very important, that it is beneficial when these are looked after by two separate experts, with CDO reporting to CTO.
Again, there is no one fixed right formula that works for every business, but all those additional roles are either part of, or related to, the remit of the CTO.
Conclusion
This list of Chief Technology Officer responsibilities, although already long and overwhelming, is still not complete.
There are as many specific descriptions and variants of a CTO job, as there are differences between the different companies.
Some organisations have a huge need for deep technology expertise, some others can do with less. Some have exceptional CTOs who are visionary technology leaders, and some others have ones who have yet to grow into their shoes.
Some need a full-time, internal CTO, and some can do with an interim or part-time, outsourced CTO-as-a-Service or Fractional CTO (you can read about the various options available to you and see what might work for your business in my other article CTO-as-a-Service. Is outsourced technology leadership the right option for you?).
You can also read about the role of Chief Technology Officer on Wikipedia here.
Only you know how a CTO role could fit in your particular business, and who would be an ideal person to fulfil it.
I am hoping, however, that after reading this article you can see that the benefits of having a competent Chief Technology Officer are real and significant.
If you are still in doubt, or would like to find out more (or discuss your specific situation) feel free to contact me, and I will be happy to help provide you with a bit more clarity.
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Thanks for reading, and best of luck with your business!
Raf
