Technology

Meet Your New Tech Leader, Different Than the Old Tech Leader

If technology is changing your business, isn’t it time to start thinking about what kind of tech leader will best serve your company’s new go-to-ma...
Martha HellerDecember 7, 2012

What is a chief technology officer?  More importantly, why should CFOs care? 

The answer to the first question is multifaceted. The answer to the second question is this:  we’ve fully entered the era of cloud, mobility, and Big Data. These are no longer tech trends; they’re facts of life. This means technology is inching closer to your business’s P&L, and the executive charged with managing your technology strategy and budget has a much greater impact on your company than in the past. 

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Whether or not you oversee the IT function directly, CFOs need to understand how these roles are evolving.  Have you defined your technology leadership for the current climate? Are you clinging to models that are obsolete?  A quick primer on the CTO position may help you to understand whether you have the right type of executive in place for your business’s needs.

The infrastructure/operations leader. The traditional CTO is a broad-shouldered, rough-around-the-edges executive who runs data centers, network operations, technical services, and perhaps security. This CTO reports to the chief information officer and manages a large team to make sure operations run reliably and cheaply.  With operations moving to the cloud, and therefore to an outsourcing model, even these traditional CTOs are getting a makeover.  CIOs across the spectrum are refreshing their CTO talent so that the ability to manage vendor contracts and service levels is the primary skill sought, not roll-up-your-sleeves network management.

The technology guru.  There’s nothing rough about the brilliant architect who looks into the future of IT to find business applications today.  Most often reporting to the CIO, this CTO (who might also be known as “chief architect”) manages a small, advanced technology group with domain expertise in the technology areas most important to the company. This group functions as a de facto internal consulting organization that helps each business unit marry the new, new thing with its business goals.  If sales, new-product development, or extended and complex supply chains are important to your business, you will probably have this type of CTO soon, if you don’t already. You’ll need someone to keep pace with all the innovation that will define how your business interacts with the outside world.

The company founder.  This executive developed the idea (and prototype) that got the venture capitalists interested in funding your high-tech start-up in the first place. This CTO meets directly with customers and investors and reports to the CEO, who he or she probably hired. If you’re the CFO of this high-tech start-up, the CTO-founder probably hired you, too. What you need to do with this type of CTO is pay attention and take care of your knitting.

The product-development executive. Here’s where things get interesting. This is a new role emerging in companies that before cloud, mobility, and Big Data never saw themselves as techcentric.  Let’s take media, or retail, or even health care. The technology leader in these companies has heretofore been the CIO, and he or she would deliver technology capabilities out to the lines of business.  But now companies are starting to recruit CTOs who do not report to the CIO. Frequently, they work for business-unit presidents and are customers of the shared services the CIO provides.

These CTOs are not responsible for e-mail or data centers or financial systems. Responsibility for those  areas stays with the CIO. The role of these new CTOs is to work with external customers and heads of sales and product management to develop customer-facing, revenue-producing technology products.

These CTOs are all about product road maps and revenue. If your company is doing more and more business with your customers through technology channels  and your corporate CIO is not well positioned to get close to your customer base  it may be time to look for a product-development CTO.

The chief innovator. Most engineering companies have always had a research and development leader who manages a team of engineers, researchers, and scientists focused on new product development. This person has had a similar relationship to the IT organization as finance, human resources, or operations. “Technology” in this context has always meant engineering, not IT.  But as IT increasingly becomes wedded to customer-facing products, some nonengineering companies are establishing this new type of CTO position. In this model, the CTO runs engineering, R&D, product development, and IT.  The CIO is one of the CTO’s direct reports.  If you’re finding that your core set of products is beginning to have a major software component, the CTO as innovator may be for you.

Today, a company that is not being transformed by technology is a rare bird. If you are the CFO of a company whose products and sales channels remain untouched by technology, you probably stopped reading several paragraphs ago.  But if like most companies today you’re doing more business through technology channels  or if IT is embedded in your core products  it may be time to go shopping for a new model of CTO.

Martha Heller is president of Heller Search Associatesa CIO and senior IT executive recruiting firm, and a contributing editor to CIO magazine. Her new book, The CIO Paradox, has just been published. Follow Martha on twitter: @marthaheller.