The Value Of Technology-driven Leadership

The importance of the CTO has increased as IT has become more prominent. Reporting to the company CEO, a CTO makes strategic decisions that form a company's vision.
Man working at desk

Named after the first letter of executive job titles (e.g., Chief Financial Officer/ CFO), the C-suite is a company’s top level of management. C-suite (or C-level) executives are responsible for leading their business; their roles are divided into respective departments, and the C-suite officers coordinate their activities to ensure a company’s effective operation.

Enterprises have long recognized the importance of emerging technologies to drive innovation and growth. Hence, most large businesses have a C-suite level executive responsible for their company’s IT and data. Some organizations may have a Chief Information Officer (CIO), a Chief Analytics Officer (CAO), or a Chief Data (or Digital) Officer (CDO). This article combines their duties under the umbrella of a Chief Technology Officer (CTO).

1. Leadership in the C-Suite and the CTO

Investopedia defines a CTO as “an executive responsible for the management of an organization’s research and development (R&D) and technological needs.” A CTO typically reports to the company’s CEO. Investopedia notes that CTOs are more involved with executive-level strategic planning, while the role of a CIO is more technologically-based, overseeing company engineers and production.

As part of the top strata of management, C-suite executives have extensive business experience (often from other companies outside their current industry) and leadership skills. They make strategic decisions that form a company’s vision. Amazon CEO Jeff Bezos said, “As a senior executive, you get paid to make a small number of high-quality decisions.”

A C-suite officer has comprehensive technical skills in his or her field of expertise. In particular, as the pace of technological innovations has quickened, CTOs must be adept at recognizing the capabilities and possibilities of emerging trends such as data acquisition, data management, and the ever-evolving information technologies. This recognition is crucial in forging a company’s future undertakings.

The importance of the CTO has increased as IT has become more prominent. The position is now omnipresent in all sorts of industries, not just the tech-focused industries – from retail to biotech to manufacturing and beyond.

2. History of the CTO

The origins of CTO functions arose in the aftermath of WWII when large corporations founded research laboratories in facilities apart from company headquarters. By the late 1980s, the role of CTO reflected the importance of emerging technologies in the R&D of new products and services. At this point, the functions of a CTO diverged from the role of an R&D laboratory director.

Businesses needed an operational executive familiar with the technical aspects of products to provide insight to innovate their manufacturing processes. This recognition led to the establishment of the CTO in the C-suite. The responsibilities of a CTO have become more diverse as companies delve into newer, more productive technologies.

To cite a telecom example, the Public Switched Telephone Network (PSTN) utilizes circuit switching and the asynchronous transfer mode (ATM) standard to transmit and receive electrical signals across twisted-pair copper wire. Voice over Internet Protocol (VoIP) has superseded the PTSN, using packet switching and VoIP codecs over transport mediums like fiber optics or 5G with more data capacity than copper. Today’s CTO should be knowledgeable about all these technologies.

Fulfilling a campaign promise, President Obama created the position of US CTO. The US CTO is an official in the Office of Science and Technology Policy (OSTP) and serves as a formal assistant to the President. Obama appointed Aneesh Chopra—a former Secretary of Technology for the Commonwealth of Virginia—as the nation’s first US CTO in April 2009.

3. Development of CTO Functions

What defines a CTO varies by company; often, CTOs must define their duties for themselves. Moreover, CTO duties depend upon the development stage of their company. A startup’s CTO in an emerging sector might be regarded as a “genius” or a “creator” (viz., Sergey Brin of Google or Werner Vogels of AWS). A more mature company in an established industry may value an “administrator” or an “advocate” as a CTO.

Speaking of Vogels, he cites four CTO categorization models:

  • Infrastructure Manager—Oversees how an organization, usually one that relegates IT to a support role, deploys technology.
  • Technology Visionary and Ops Manager—Typically found in tech-oriented companies, this CTO model conceives how to best implement technology as a business strategy.
  • External Facing Technologist—Seen in companies where technology serves to deliver products and services to business stakeholders.
  • Big Thinker—These CTOs focus on how to use technology internally to evolve new business models and to preempt competition from using technology to subvert markets.

While their leadership ability is a given, CTOs often serve as a bridge between a company’s tech talent (engineers or IT personnel) and the boardroom. They must build solid, productive relationships with both camps, who sometimes find themselves at odds with their counterparts.

Today’s CTOs now also recognize evolving trends in the workplace and society at large. They must consider emerging developments such as diversity, going green (e.g., using eco-friendly data centers), and outsourcing core business functions (e.g., SaaS and MSPs).

4. Future Functions of the CTO

Since competition never sleeps, owners, investors, and other C-suite executives will demand that their company CTO be ROI-driven and multidimensional. With business decisions based on data and technology now more than ever, CTOs will find themselves doing more than just “managing” IT. They’re transforming into Chief Innovation Officers, building cross-functional teams, and strategizing how to fit the latest tech advances into company product management and customer resource management (CRM).

When CTOs advocate strategic decisions such as managed WiFi to enable proximity marketing, they demonstrate innovative thinking valued by their company’s CEO and investors alike. Increasingly, CTOs will contribute strategic value to their business, not only in IT but also in areas like business processes, product development, and stakeholder management. Meanwhile, they must be aware of budgets, revenues, and competition.

Let’s not forget that the CTOs role has dynamically evolved along with today’s technology. Things like disaster recovery or data centers were unheard of even in the early 2000s. Nowadays, it is the CTOs job to ensure every tech process is functioning smoothly, as well as mitigate any data loss crucial to the company.

In short, the future CTO nonpareil will be a “Mister Peabody” – a “Wagna” cum Laude and highly competent in many disciplines.

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