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by Steven Brown
Nov 20 2017
The role of the Chief Technology Officer came about in the 1980s, becoming prominent in the 1990s with the conception of the big internet companies. Tom Berray in The Role of the CTO: Four Models for Success explains that, for businesses, the “CTO role is a low-cost addition to the organization [that] can help reap potentially high pay-offs by identifying and elevating critical opportunities”. Finding a great CTO that meshes with a company’s corporate identity however, can seem more a challenge than discovering a unicorn might.
I’ve often wondered how relevant the CTO role is today considering that a lot of companies seem to have some idea of direction as towards their technological capabilities and future needs and what this phenomenon means to the CTOs at the top of their industries. For that matter, what does it mean to be a CTO in today’s game?
Having been involved in Career Counseling for CTOs for numerous years and having then worked with businesses searching for these sorts of aspiring executives for their C-suite, it’s apparent to me that there is a lot of confusion regarding what the individual versus the company sees the CTO role to be purposed for. If there’s one thing for sure, it’s that there isn’t a one-fit-for-all solution, but why is it after thirty-plus years that there isn’t any confluence of ideas? I have various observations on the technology industry, formed from extensive experience, but I knew if I was going to get to the bottom of this tricky deal, I would need further insider help; as such, I sought out 158 CTOs and asked them to give me a picture of where they think they will stand in the greater picture in 2018. To help them frame their response, I asked them to consider a comparison between CIO and CTO roles as there is often a grey area between the definitions of these positions. The information they received follows:
Chief Information Officer
- Serves as a company’s top technology/business manager.
- Delivers value to a business and understands the numbers.
- Aligns technology to suit a business’s needs in order to increase the top line.
- Drives business transformation and innovation.
- Works with the CEO and executive team to provide technical strategy.
- Focuses on internal customers.
- Collaborates and manages vendors that supply infrastructure solutions.
- Has to be a skilled “Servant leader”.
Chief Technology Officer
- Serves as a company’s top technology architect.
- Aligns technology to a business to make savings affecting the bottom line.
- Analyses budgets related to technology selection, project planning and resource management.
- Ensures projects are delivered to schedule and to budget.
- Runs the organization’s technology group.
- Mentors a business’s technology team.
- Focuses on external customers.
- Collaborates and manages vendors that supply solutions to enhance the company’s product(s).
- Is a creative and innovative technologist.
40% of those contacted replied to comment on this interesting kaleidoscope of corporate responsibilities. Here is a sample of the messages that best represent the majority of respondents:
- “Which role is more senior depends on the industry; the split you have defined is often used, but mostly in companies where IT is a supporting function – i.e. the business does something else and IT is an enabler through business systems and corporate IT. CTO is usually the more senior title when what the company does is wholly dependent on technology – e.g. telco, media, etc. This is also because the Technology is a lot more than Information Technology. My role incorporates both the CTO and CIO definition you have covered. Information technology and corporate technology is a very small part of what we do. We focus on Products and delivering content: our whole business is Technology.”
- “From your definitions for CTO I would add “Has overall responsibility for the effective use of technology within the business”. I am not sure that I agree with your comment that a CTO focusses on external customers versus the CIO role of focusing on internal customers. I believe that any CTO role has to be all encompassing because the technology deployed will have both an internal and an external impact.”
- “Personally, I believe an organization has a CTO to start with (correct tile should be CITO (Chief Information Technology Officer)), doing all the activities you list (both CTO and CIO) and as the organization grows, the CIO roles becomes a requirement to reduce the work load of the CTO. Some companies do not deliver tech, but have IT systems. Those may have a CIO but no CTO. Looking forward, I think the NEW ZEALAND market has matured a bit in the sense that there are more CTO positions within organizations that didn't have them before. The role is slowly becoming…more 'pure'. You more and more see companies advertising for multiple "Head of..." Jobs, splitting the role of the CTO (and more often than not, doing away with it as well).”
- “I would say you would be better writing a list of how they are the same rather than what the key differences are. I was previously a CIO and there's not a great deal of difference here in NEW ZEALAND – very transferable skills.”
- “[The CTO] keeps up to date with technology developments specific to their industry and never stops learning. Creates learning paths and ongoing education for the technology team.”
- “I would like to add that a CTO has to "Understand current and future customer requirements based on rapid changes/improvements in technology”. It's critical to initiate R&D projects to deliver new generation of products so the business stays relevant in the marketplace".
- “Automation and workflow management is part of the CTO experience – traditionally a CIO responsibility. A CTO that doesn’t understand APIs, Cloud and virtualization will have limited growth opportunity. The old CTO approach enabled the CIO deliverables, scaling and developing the platforms that CIOs needed to meet product and user demands. Now, virtualization of technical platforms has accelerated the blurring of the CIO/CTO split. On your division: the internal/external and project split are organization specific, not generic in my experience: a CIO has internal customer focus; a CTO has external customer focus, project management.”
I feel the response I received shed some interesting light on the differences between CTOs and CIOs and the companies they work for. The CTOs in question were New Zealand based where a lot of organizations are still at a stage where they are rapidly growing so one could assume that this means these CTOs will acquire some of the duties of the CIO as they continue to develop. When they reach a grander size, they may focus on isolating the distinctive roles and appointing new people to take up the mantel of CIO.
The majority of CTO respondents saw themselves as senior to CIOs even though a lot of them did not in the past sit on an executive team, but reported directly to the CEO. This shift in thought may be a consequence of companies recently adding the CTO role to the executive team.
In New Zealand, there is still much of a grey area between CTO and CIO roles in terms of business development and it does not look like 2018 will bring a decisive end to this semantic nether. If it is in fact the CTO that must look outside of their company to stay abreast of new technology and what would serve the customers best, is it then down to the individual for this blurring of identity?
To summarize: there are companies and there are companies; all of them bring something different to the table when it comes to the deployment of CTOs and the CTOs themselves add another fascinating ingredient to that unfathomable stew. The CTO is far from standardized which is where the confusion comes in. Before a company decides they need a CTO, they need to know where the organization is going in terms of development: what are they trying to achieve? As a prospective CTO, you need to be aware of your skillset in terms of both business and technology. Put to the test, will you stand the test of time and deliver or have you only the treasure map without the crew to follow?
I would like to thank all of the fantastic CTOs who contributed to this article and gave their time and ideas so freely to allow me to explore this intriguing topic.