Executive Career: Chief Technology Officer (CTO)
Filter tag: Change Management and Executive Outplacement, Customer & Brand, Leadership Capability, Strategies for Growth
In recent years, many of our personal and professional practices have become technologically aided, from the way we shop, socialise, and learn, to the ways in which we conduct our workday. Customers have developed new sets of digitally driven standards and higher expectations, making it much more difficult and implausible for businesses to continue to progress without the assistance of more advanced tools. As we face challenges from an increasingly disrupted global economy, the adoption of new technologies will be more imperative than ever to help organisations continue to adapt and deliver results for their customers and stakeholders.
Digital transformation is an all-hands-on-deck process, with everyone in the organisation having a role to play. The Chief Technology Officer (CTO) will most often be the one leading the project, and will face many challenges along the way. Here are some of the top skills required to be successful in this executive career, and some areas today’s CTOs should focus their attention for the foreseeable future.
CTO Snapshot
The Chief Technology Officer is the most senior executive in an organisation’s technological function, occupying a seat on its board. They oversee research and development and determine ways in which the organisation might use technology to enhance its products, services, or practices to benefit its customers. This is a highly visible role requiring a combination of both deep technological savvy and strong leadership and communication capabilities.
Historically, the role of the CTO was the most loosely defined board position. With time, organisations have begun to distinguish the responsibilities more between the technology chief and those of the Chief Information Officer (CIO). The main difference between these two executive careers is their focus, with the CIO focusing inwardly on the organisation itself while the CTO looks outward. Therefore, successful CTOs must have a finger firmly on the pulse of their market and the needs of their customers, being both commercially minded and CX focused.
Much like the broader technology industry itself, the UK’s CTO population lacks in gender diversity. Previous reports found that only 15% of FTSE 100 CTOs are female. However, CTOs can expect to be well compensated in the UK, earning a median base salary of £92,179. Total packages including base, bonus, and profit share can range up to £175,000. Those based in London can expect higher earnings with an average salary of £106,963, and those with 10 or more years of experience can expect to earn up to 23% higher than average.
Top CTO Skills
The executive role of the CTO has become increasingly important in recent years given greater Board investments in technology and the rise in digital transformation as well as societal trends towards e-commerce, hybrid and remote working, digital media consumption and more. It is the role of the CTO to understand how these trends will impact the business’s customers, and how to leverage technology to meet these evolving needs. Because of the commercial nature of this position, CTOs require a unique combination of skills to be successful. These include:
- Technological Savvy: It goes without saying that the head of the technology function should possess a strong understanding of tech from both a technical and practical standpoint. Typically, CTOs possess a strong technical background to begin with, but must also be willing to branch out beyond what they know. In addition to overseeing the company’s current technological setup, the CTO needs to be looking a step—or multiple steps, when possible—ahead at trends to understand where technology is heading and how it may impact the business and its customers.
- Business Development: Innovation is a crucial element for driving an organisation forward. The CTO is tasked with helping to achieve high-level business objectives with the use of technology. This may involve advising on any technical bets, but also may require the CTO to come up with and oversee the development of new products, features, or services that fill gaps in the marketplace and satisfy evolving customer needs. CTOs will be involved in various aspects of the process, which will require close collaboration with other members of the C-suite and throughout the business. They will work closely with product heads or the head of engineering to ensure that all strategy is aligned with the company’s technology goals, and they may also collaborate with the marketing team to ensure all products have the proper technological support.
- Tactful Communication: Oftentimes, it falls on the CTO to get the rest of the C-suite on board with technological initiatives. Generating this buy in requires a tactful and strategic communication style wherein the CTO can provide clear cost benefit analysis and demonstrate business need, usually while having to explain highly technical ideas in a way that non-technical minds can comprehend. But never is it solely the board’s trust that needs to be earned. The CTO must also be able to win over the organisation’s key stakeholders such as its investors or shareholders, its partners, and its people. In terms of the lattermost group, the CTO will not just need to influence those in their own team or department. It will fall on the CTO to get staff in all functions on board with any new initiatives and ensure that these team members understand the role of technology in the business, its implications for their role, and the impacts on the customer. These conversations with staff will be most valuable, as those closest to the customer will have the best insight into what their needs are and what processes could be improved. Ensuring positive and open communication and encouraging innovation and ideas from others will be important in this role to ensure that the best solutions can be reached.
- Customer Centricity: Keeping the customer front of mind during those conversations and when making decisions is critically important for the CTO. Today, so much of the customer journey occurs digitally that the tools and processes involved must be up to a certain standard to meet expectations. But in an increasingly competitive marketplace, meeting those standards is no longer enough. CTOs need to combine their technical knowledge with their understanding of their customers to find solutions that will help further the business’s objectives, create loyalty in a saturated market, and obtain the competitive advantage. That said, CTOs cannot afford to be purely technical or purely commercial. Their ability to leverage both sides of themselves will be crucial for their success.
Top Market Challenges Impacting CTOs
The skills above will be critically important as CTOs attempt to navigate the challenges of the current technological and economic and employment landscape. Some of the top factors that technology chiefs should be aware of are:
- High Stakes Digital Transformation: Digital transformation has been high up on the strategic agenda, but the pandemic and its resulting challenges pushed up the timeline and added additional pressure for businesses to adapt. It often falls on the CTO to spearhead digital transformation within the organisation, and today’s CTOs face higher stakes and tighter timelines than ever before. There is no room for vanity projects or adopting new technologies for the sake of it, so CTOs will need to help to ensure that the intended projects create value for the customer and revenue for the business. CTOs will likely be tasked with selecting the software and hardware that will be implemented in the organisation, managing the phasing out of legacy systems, and drafting new procedures and policies. These choices will need to be made strategically with the best interest of the business and its customers in mind. Businesses will be looking to invest, but budgets may be tighter than expected due to economic difficulties. CTOs may be challenged to make the most of the resources they are allotted and create major impact with minimal cost.
- Talent and Skills Shortages: As the head of the technological function, the CTO needs a strong team behind them and will likely be involved in hiring and training. However, a record number of businesses are doubling down on digital transformation, which has created an exponential demand for tech talent and has made securing and retaining qualified staff more difficult than ever before. Not having the necessary skills on hand limits what a business is able to accomplish and influences how it prioritises, and therefore the high rate of attrition poses major threats to the progress and results the CTO is tasked with delivering. Since the talent crisis does not look to be ending any time soon, CTOs will need to start being strategic about how to do without. This may require adapting their transformation plans or exploring training options to upskill current staff.
- Cybersecurity and Data Privacy: New threats in cybersecurity emerge every day. With individuals more dependent on technology than ever and businesses’ IT systems spread out across locations following the adoption of hybrid work models, CTOs and their teams are now having to be vigilant about cyberattacks that are more frequent and more complex. Staying on top of these threats will require continuous monitoring and improvement of systems, which can be both costly and time consuming. CTOs will need to consider a reasonable approach to tackling any breaches without it having to become their team’s full-time occupation. Alongside that, the shift to digital has endowed businesses with more customer data than they often know what to do with. Not only is it the responsibility of the CTO to find was to use technology to leverage and derive value from that data, but also to keep it safe. Customers have become much more sensitive about the personal information that is gleaned from their activities, and all it takes is one breach to lose all trust. The CTO needs to be customer focused at all times, and therefore it is now a vital part of the job to protect customers’ confidence while shaping their experiences.
Top Priorities
Given these challenges, current and aspiring Chief Technology Officers should focus their attention on these 3 key areas:
- Crafting Customer Experiences in a Crowded Market: Digital has expanded the playing field, meaning businesses are no longer just competing with those in their local area anymore. Customers are spoilt for choice in products, services, applications, platforms, and so on, all thanks to the digital landscape. CTOs will soon be assessed by their ability to deliver engaging experiences that differentiate and build loyalty. Doing so will require you to know your customer as well as you know your technology. Prioritise building solutions that are reliable, efficient, and experience driven.
- Optimising and Prioritising: Strong business acumen is a requisite for the success of a CTO. This skill will be especially crucial as businesses navigate recession, talent shortages, and a disrupted global supply chain. Over the next few years, CTOs will need to find ways to create results for the business despite any issues with resource allocation. This may involve finding ways to optimise technology investments, prioritising projects that will deliver the most value, and making the most of the talent that is available. The ability to adapt and adjust will be what sets great CTOs apart from the rest during this tough economic period.
- Maintaining Future Readiness: No CTO wants to invest in solutions that may be fit for purpose today but cannot flex to serve the business tomorrow. Innovation should be a major focus for all CTOs. This will involve understanding and embracing the emerging technologies such as IoT, AI, and big data that are disrupting our current landscape while keeping an eye on those beginning to boil in the background, like the metaverse and cryptocurrencies. CTOs will need to be able to separate hype and business value to determine which technologies will be right for the business and which are better kept as buzz words. Continuous learning is essential. The rest of the board will be looking to the CTO for guidance, and it is essential to be ready and informed.
The executive career of the CTO is an incredibly important one and will only become more so over the next few years. Success will take innovative thinking, flexibility, continuous learning, technological savvy, and strong customer centricity. It is certainly a challenging time to be in this position, but an incredibly exciting one as well given the impact these senior executives will have in shaping the future.
If you are a current CTO looking to enhance your executive career, or an executive looking to transition into a CTO role, we can help. The Rialto Consultancy offers a range of career strategy services including Executive Outplacement, Executive Career Coaching, and Personal Branding. Get in touch with our team to discuss your options.