Today’s chief technology officer (CTO) is a combination of engineer, visionary leader and influencer. They can have a significant impact on a business’s success — but only if the organisation recognises their value and empowers them at the top level. As a potential leader of business transformation, the CTO’s role is still undergoing its own transformation, and the experience of individual CTOs can vary considerably across organisations and industries.
In the automotive and IT sectors for instance, where the development of a new product is a lengthy process, the CTO’s position can be far-reaching. Depending on the technological depth of the company’s products, they can sometimes act as its external face, driving consumption of the offering.
In the technology industry, the role of the CTO has evolved well beyond operational and technical know-how to encompass strategy with an outlook of between 10 and 20 years. A prime example of this is Dubai Holding, one of the United Arab Emirates’ largest and most prominent investment holdings. The Group CTO’s role here includes utilising data for both investment and strategic business decisions. It goes beyond this again to understand customer and consumer patterns so that they can anticipate future development needs.
By contrast, at well-established companies in other sectors such as manufacturing, their purview can be much narrower, less strategic and focused on the nitty-gritty of technology — if the CEO sees a need to hire a CTO to begin with.
The CTO’s technological expertise often sees them serve as a connector. At companies where platform usage decisions are left to local markets following a merger, for example, the CTO can play a crucial role in helping to maintain unity as a single organisation.
Often, a CTO occupies the middle ground, enabling an organisation to function effectively, but not reaching their full potential as an agent of change. Company leadership might recognise that a CTO can by a valuable strategic asset, but unintentionally limits their scope through their own lack of understanding of, or commitment to, digital transformation. The extent to which a CTO can contribute to a company’s transformation largely depends on its growth strategy and the willingness of the CEO to absorb their perspective.
The case for a direct CTO-CEO reporting line is particularly strong when an organisation is building an offering for an emerging space with multiple unknowns, such as automated mobility in the case of Woven Planet. Involving the CTO in the planning process from the beginning helps to ensure that expectations are aligned and that the business is fleet-footed and able to adapt to unforeseen challenges.
It also helps identify opportunities. Companies that monetise their operations in ways such as selling internal technology solutions to clients are often those where CTO and CEO are closely aligned. Wayfair, an online home decor retailer, offers an example of this. As well as selling furniture, the company uses its platform to offer supply chain-related services to its suppliers. As more CTOs demonstrate inspirational leadership and resiliency, we can expect this arrangement to become more widespread.
Companies looking to successfully integrate a CTO into their organisation must first recognise the role as a valuable investment rather than a cost. They should also seek to minimise internal complexity. Sometimes, the CTO role can overlap with that of the chief information officer (CIO), head of digital or other technology-related designations. While these roles can operate together, they serve distinct purposes, and for them to succeed, that distinction must be upheld.
A CTO thrives on clarity: their responsibilities must be clear, and the management and board must understand why they have come joined. Businesses have done well to strengthen their technological foundation under the pandemic. With economically challenging times ahead, they cannot afford to take their foot off the accelerator or lose perspective. To drive holistic change, organisations must continue to empower the CTO and support their position at the top level of the pyramid. The quality of strategic technology leadership, and its connectedness within a company, will be two of the biggest factors that determine long-term competitiveness.
