The Role Of The CTO

Posted by Marius Dornean on September 06, 2012  /   Posted in Communication, Informational, Technology

As an adamant believer in the imperative need of strong leadership in technical organizations and how these roles contribute towards an organization’s success (and in an effort to mold myself to optimally fit such a position) I am constantly on the lookout for views, opinions, research and articles regarding the topic. I recently discovered an excellent piece on the CTO (Chief Technology Officer), an executive function that is relatively new to the business world, by Tom Berray of Cabot Consultants, Inc.

If you ask most people to identify the duties of most c-level executives, they will probably easily identify the CEO, COO, and CFO function and their respective duties. Pose the same question regarding the CTO position and you will probably get a mixed bag of answers. This might be due to the immaturity and lack of pervasiveness of the role in gneral, or it might be due to one’s lack of understanding of how technology plays a key role at the top of the chain in modern businesses. Nevertheless, it is important to understand how this influential and maturing function is becoming a critical role in any organization, along with what types of candidates will most successfully fill this role.

The CTO function’s role in an organization is directly tied to the organization’s needs, size, maturity, industry, and roster. In this blog we will analyze the CTO role as 4 distinct models: Infrastructure Manager, Big Thinker, Technology Visionary and Operations Manager, External-facing Technologist.

As the 4 models indicate, the CTO role is very polymorphic; it takes on different attributes based on the organization’s needs. Before we move on to looking at each role specifically, we should agree that one common theme all CTO’s share is the ability to assess technology’s strategic future impact on the corporation.

The CTO deals with the single most important question of future competitive strategy: how does the technology (in the widest sense possible) relate to optimal-decision making at the top, which in turn enhances competitive performance, higher margins, greater market share, and long-lasting dominance of a certain industry.

CTO as “Infrastructure Manager”

In this role, the CTO is an extension of the CIO role. The CIO role is a ‘staff’ role, overseeing technology strategy, executive-level relationships with internal and external entities, budgeting, and the melding of IT and business processes. The single most important question this role focuses on is “How effective is the IT organization”?

The CTO takes on the ‘line’ role of the position and relinquishes the ‘staff’ role to CIO as aforementioned. The ‘line’ role is responsible for the infrastructural and operations of IT: data center operations, network operations, application development & maintenance, security, and other line functions.

In this model, the CTO reports to the CIO who is viewed as a senior executive and reports to the CEO or president. In most cases the CTO is not considered an ‘officer’ of the company.

Because this model splits the executive power and day-to-day management and operational responsibilities between the CIO and CTO, the repercussions are usually associated with the limitation of the organization to perform at a maximal level at the organizational behavior, design, and integration levels.

Candidates best suited for this model are persons with proven operational skills, an intrinsic sense of technology management, ability to lead large and diverse organizations, and someone comfortable with focusing on the implementation details rather than the strategic ones.

CTO as “Big Thinker”

This model focuses on the CTO as someone who spends their time evaluating how technology can be used internally by the business. The main focus of this exercise is to enable new business models and lines, increase revenues usually through automation and increasing efficiency, and preempting a competitor’s attempts to use technology to disrupt the market position. In order to fulfill this role, the CTO’s responsibilities often include R&D initiatives, driving architecture, ensuring quality, and competitive analysis.

In this model the CTO reports directly to the CIO or CEO and usually has a small, elite staff. Some organizations can parallel this to directors of architecture with extra responsibilities. In relatively few cases this positions operates alone.

The candidate most suited for this position is someone who is well respected within the organization and has demonstrated the ability to influence key senior executive. Consequently this role leads from a position of influence as opposed to direct control that most line managers utilize and usually stems from a strong reputation with the senior executive leadership team.

Due to the lack of direct and actionable control this position maintains, they may have to wait for their initiatives to be intertwined into the corporate road map. Inversely, this position has more freedom than most and CTO’s are encouraged to think in the broadest ways possible, to ponder and exploit avenues other’s normally don’t consider.

CTO as “Technology Visionary and Operations Manager”

This model is usually found in dot.com’s, start-ups, and other technology-oriented organizations where technology is at the forefront of the business strategy. This role plays both a technology visionary and operations manager function.

In this model the CTO usually reports to the CEO or is a co-chairman / co-founder. In larger organizations a CIO may also report to the CTO with the CIO fulfilling the infrastructure management role.

The candidate best suited for this position must have proven hands on technical skills in designing and implementing technology. Inversely, the candidate must also have the capacity to grow the IT organization and be able to balance the enduring business requirements and the innovative initiatives without letting their zeal for technology outstrip the organization’s capacity to manage the rapid change.

CTO as “External-facing Technologist”

In this model the CTO focuses their efforts on utilizing technology to provide better products and services to external customers and clients. This role is found in nearly every IT consulting company.

The responsibilities of this role usually include R&D, IP, best practice management, and industry tracking. Since this position is responsible for communicating with a wide array of clients across multiple industries it is imperative that the candidate have the ability to extract emerging technologies value to practical business processes.

This position usually reports directly to the CEO / President and is a peer of the CIO. They may also report to other senior executives.

The ideal candidate for this position is someone with a strong reputation with the leadership team, has broad knowledge and understanding of emerging technology and its influence on business processes, strong communication and interpersonal skills to be able to interface well with customers, and has the ability to act as an external spokesperson for the organization.

Matching Models with Organizational Needs

The best way to classify organizations and their properties, in order to identify where the 4 different CTO models fit, is to categorize them via their reliance on information as a core product/service and their velocity of business change.

Lower-left quadrant: Stable industries with low business change and low reliance on information can leverage the “Big Thinker”. Overall, this CTO role is inexpensive and enables the business to leverage technology to increase efficiency and also preempts any potential threats from disruptive technologies.

Lower-right quadrant: Industries with low business change but high reliance on information, such as consulting companies, can leverage the “External-facing Technologist” to drive future products/services while providing a respected presence for clients.

Top-left quadrant: Industries with a high rate of business change and low reliance on information can leverage the “Infrastructure Manager” to ensure that the technological assets of the company can adjust to the rapid changing demands of the business.

Top-right quadrant: Industries with a high rate of business change and high reliance on information as a product/service can leverage the “Visionary and Operations Manager” to keep up with the fact-faced demands of the business.

Relative Strengths of the Different Models of the CTO

 

Business Requirements/Processes Infrastructure Manager Big Thinker Visionary and Operations Manager External-facing Technologist
Identify new technologies  LOW  HIGH  MED  HIGH
Exploit new technologies  LOW  MED  HIGH  HIGH
Integrate new technologies  MED  LOW  HIGH  MED
Leverage technology across business units  HIGH  MED  HIGH  MED
Drive the business strategy  LOW  HIGH  HIGH  HIGH
Drive revenues  LOW  LOW  MED  MED
Reduce costs  MED  MED  MED
Enhance client relationships  LOW  MED  MED  HIGH
Enhance communication and collaboration  MED  MED  LOW/MED  HIGH
Build out or leverage existing IT infrastructure  HIGH  LOW  HIGH  LOW

Conclusion

By understanding how CTO roles are maturing across many industries, organizations can use this information to create the appropriate IT functions to fill emerging needs. An organization must assess what kind of technology leadership is required for the growth or stabilization of the company. The need for keeping up with the pace of technology and its expansion is not the only driver in this assessment, efficiency and relationships must also be a key component.

Consequently, individuals such as me can use this information to identify the key attributes required to fill the CTO role in any of the 4 aforementioned models. Using this information, a carefully crafted career path can be created that maximizes and adapts to the ever changing role of CTO.

Credits

Full credit and thanks for amazing work is given to Tom Brerray and Raj Sampth whose research and paper were used as the basis of this blog. The original document can be found at: http://www.brixtonspa.com/Career/The_Role_of_the_CTO_4Models.pdf

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