The Chief Technology Officer (CTO) is the key role to drive all internal processes inside the company. A strong CTO is a person who wants to change his/her company, bringing sustainable success in the marketplace. Even better, his/her aim is “a willingness to challenge the status quo“. An unstructured shortlist of CTO qualities carries mastery of systems engineering, a clear map of the company’s current technology, mastery of new technologies and all the related implications, a correct modeling of the customer base, and connection with other stakeholders (research centers, start-ups, funding institutions).
That list is long, so there is no single way to structure these qualities into a CTO’s activity. The companies’ landscape hosts many different variants. Matching CTO’s qualities with companies‘ variants brings to a taxonomy of different kinds of a CTO.
We give a look to the CTO of a company working in the ICT industry, then generalize it to the broader tech industry, and we finally evaluate the two inside a 4×4 matrix.
The ICT-tech CTO
The ICT industry has since long offered various categorizations of the role of the CTO. In particular, a 4-kind categorization has been successful. It is still used in many cases, normally with limited editing, so it can be worth giving a look to it.
The four categories of a CTO in the ICT field are the Visionary, the Infrastructure Commander, the Customer Champion, and the Big Thinker. We will refer to the synthetic infographic introduced by Access Alto, but you can find other similar analysis completed by other experts and consulting firms.
Access Alto also presented an intriguing chart to better describe its categorization of the CTO characteristics.
The Infrastructure Commander
S/he works on the front line to put in place the technological vision set by others. The technical strategy to be implemented has been approved before, so s/he oversees infrastructure, network, security, and maintenance.
The Big Thinker
S/he creates the business model of the company, making the strategic job need to compare his/her company against the competitors. S/he has strong relationships with all his/her C-level peers on the upper side of the organizational chart; at the same time, s/he works on the lower side, verifying that technologies are really implemented inside the organization according to the designed strategy.
S/he is usually associated with the organization from inception and is responsible for devising technical strategies and blueprints of the business model. For CTOs in this category, the agenda is to drive the business forward.
The Customer Champion
S/he has a deep understanding of the customers. S/he is responsible for delivering customer excellence in UI and UX. He is the face of business and focuses on problem solving.
The general-tech CTO
All the new technologies open new doors to well-educated CTOs, especially to the ones coming from a tough competition such as the ICT arena. It looks like a good idea to give a look at how the chief technology officer behaves in a landscape picture.
Looking at the broader picture, the general-tech TCO role has alway been categorized too. Another 4-kind categorization is interesting to our scope. In particular, an analysis by McKinsey gives four different types for general-tech CTOs: the Challenger, the Influencer, the Owner, and the Enabler.
The final result is two lists of 4 elements each, describing the CTO basis. We can put them in a 4×4 matrix, describing the starting characteristics of the job as a CTO in respect to the ICT-related technologies and the non-ICT-related technologies used inside the company.
Moving from that starting point, we have to make this/her job our unique way, considering many modifying factors such as education, agility, and value metrics.
The Challenger uses creative tension and veto power to improve R&D performance by injecting additional scrutiny, external perspectives, and rigor into activity and processes owned by the business units. The job description focuses on external interfaces and strategy and portfolio management.
The Influencer has low direct control over both R&D and technology. S/he then acts as a sounding board, counseling business leaders on their R&D programs and campaigning throughout the business to garner resources for top-priority ideas. The job description focuses on internal and external interfaces, with a particular attention to the external side (e.g.: partnerships).
The Owner is the man in charge towards a single product or service. S/he centralizes all R&D personnel and budgets underneath him or her and consequently has complete control of product and technology development in the company. The job description focuses on strategy and portfolio management and processing personnel management. S/he is then completely dedicated to the internal interfaces of the company.
The Enabler is similar to the Influencer in their low control over R&D and technology inside the company. S/he then focuses on making the R&D function faster and more effective by improving processes, cross-pollinating ideas, and improving skills levels, or by increasing investment in a few company-critical projects. The job description focuses on capability building, internal interfaces, and process and personnel management. The Enabler is the most managing one of all.
The number of R&D spots to manage drives the CTO in or out of the company. Owners and challengers that have many R&D spots to manage, are internally focused. Enablers and influencers, managing a low number of spots, are most likely focused on what happens outside the company.
CTO’s 4×4 matrix
There is no direct correlation between the two 4-case CTO categories. Although it is easy to find common points through all 8 descriptions, to depict an overall methodology the only way is starting with a three-dimensional 2x2x4 array, or with a simpler 4×4 array. Simplifications can occur later, refining an own model to be the most effective CTO regardless of the underlying technology and the specific industry, but considering all the stakeholders, from teams and employees to customers and suppliers.
Pros and Cons
Not always a C-level executive is given the time to understand the situation. While with start-ups at their very beginning this can happen, the CTO is like a new soccer manager in normal companies, that need to win matches since the very beginning of the new season.
The lower the technology, the less the R&D expenses, the lower the needed control exerted by the CTO over technology agendas and priorities. The two models on the lower part of the diagram, i.e. “influencers” or “enablers”, look best suited in these cases.
Influencers (often found in consumer-goods companies, for example) are often scouts, deep thinkers who advocate for innovation through partnerships with providers of new technologies. Enablers are more managerial, tasked with driving efficiencies in multi-business-unit organizations with a high degree of overlap in technologies and projects among the business units.
On the other side, the higher the expenses (for a better technology), the higher the degree of control that the CTO ought to apply to the involved elements. Here is where Challengers and Owners normally live.
Challengers’ company normally has multiple business units, each with its own R&D departments, needing strict cooperation.
Most often, owners’ paradigm can be implemented in start-ups or small enterprises, where it is most common to only market one product or service. Owners and enablers are indeed generally more internally focused, while challengers and influencers have more capacity to focus on the external environment and interfaces.
The McKinsey report gives very intriguing insights into the CTOs’ drives. “The styles of influencer and owner are typically the most challenging to execute”, due to precise biases. The control over resources is owned by the R&D line, “so that only someone both technologically and interpersonally astute is usually able to make this style work”. Owners’ knot to loosen is the connection with market realities, that could not be seen also if this kind of CTO directly controls R&D resources.
“When implemented correctly, the enabler and challenger styles offer a more balanced approach that is particularly effective in companies where R&D is more decentralized. The key is to grant the CTO the right amount of hard power”.
Enablers can determine the speed of adoption of processes and projects. They “get positive power: typically, a combination of expert personnel and financial resources he or she can use to accelerate important projects”. On the contrary, Challengers get the negative power given from the ability to terminate, deemphasize, or delay projects that are inconsistent with the company’s strategy, are not on track to achieve the target product profile, or are suffering from significant delays or cost overruns”.
The Visionary-Enabler CTO and other starting points
Now we have a 4×4 matrix of 16 general CTO personas. We can consider all of them, splitting the ICT component from the general-tech component. All these categories can give a starting hint on how to approach this difficult role, then leaving all subsequent steps to the manager. The generated couple on the matrix can be intriguing.
The Challenger-Commander, to say one, oversees all aspects related to the ICT infrastructure; having a high degree of control on R&D and technology, pushes performances ahead through a tension strategy.
The Visionary-Enabler is one of the most exciting and adrenalinic CTOs. He’s been controlling every single tech step since the beginning, fostering skill levels, processes, and investments, to the exclusive advantage of the business.
Education, agility, and value metrics
We can now choose our starting point inside a set of 16 different possibilities. The correct CTO way of managing, indeed, is not a picture, but a moving target. It has to follow the evolution of the company inside a fast-changing world. There is the need to look at the most probable sources of change for the CTO managing rules.
Company dimensions, R&D budget, R&D mapping inside the company, the category and number of products and services, are only a few of the variables to punt into consideration when shaping the real duties and powers of a valuable CTO. The role of all consulting companies consists first in analyzing an industry, second in building complete frameworks to encompass all actors of an industry, third in going into details of every kind of actor.
The consulting company McKinsey again presented the results of a survey about technology transformations in February 2020. The final conclusion of the survey asks for different analyses and strategies, to be implemented in three key points: education, agility, and value metrics.
Well-educated professional figures, fully integrated with modern-time requirements, are just as necessary as the adoption of modern technology. Nobody has longer to be ashamed of being technologically prepared and not having great literary or hertorical competence. The term “culture” is often violated and technology is simply sided to the traditional knowledge: we mentally cannot think without tradition, that in reality is objectively secondary in the vast majority of cases today.
Correct training, updated management, and immediate verifiability of qualifications are the points on which excellence is already played out.
Mapping IT to business is still a far job from being agile and resilient to constant change. Of course, digital transformation improves the quality of the software developed, but it also offers the opportunity to establish better processes to give corporate value.
Integrating partners into business processes also brings closer to continuous collaboration, which is the ultimate goal of collaboration.
The problem of metrics is perhaps still the central one. Whoever manages to measure the value created with technology has a great deal more chance of being successful on the market. It is the task of the executive who deals with strategies, CTO or CIO that is, to go from evaluating costs and risks (so dear to the CFO) to measuring the created value. The evaluation cycle must be made agile, shortening the time but also involving more areas of the company.