Technology Talent Talk: Enabling Technology Officers in Southeast Asia

New technologies are driving transformation in every industry, and Southeast Asian companies must react with urgency. 

In this three-part series on technology talent, Russell Reynolds Associates takes a deeper look at the executive ranks of the region’s top companies to gauge commitment to this movement. 

It’s increasingly clear that technology is — or should be — at the heart of every modern business model. To better understand how this trend is playing out in Southeast Asia, we examined the top ten listed companies by market capitalization for Singapore, Malaysia, Indonesia, Thailand and Vietnam — the five countries that account for about three-quarters of Southeast Asia’s GDP. 

As an indicator of corporate commitment to various technology efforts, we charted the prevalence of three types of senior technology roles as well as associated career paths: 

1. Foundational Technology Officers: Chief Information Officer (CIO) and Chief Information Security Officer (CISO)
2. Enabling Technology Officers: Chief Digital Officer (CDO) and Chief Technology Officer (CTO)
3. Disruptive Technologies Officers: Titles vary; key mandates include AI, IoT, and Big Data

Here, we look specifically at the prevalence and career paths of leaders in the second category, the CDO and CTO.

Chief Technology Officers

CTOs are “big thinker” visionaries who can astutely foresee and adapt to market changes. They are typically the leaders who pave the way towards adopting technological value drivers for their organizations, including cutting-edge products, applications and services that can generate new revenue by enabling more ways to interact with external customers. In keeping with this mandate, the most successful CTOs think outside of the box, challenge conventional wisdom and are flexible in nature.

Compared to CDOs, however, fewer companies appear to be utilizing CTOs to derive value from technology. Just 22 percent of Southeast Asian companies include a CTO among their leaders, boosted by an exceptionally high rate in Malaysia. While global figures are unavailable, the gap between Malaysia and the rest of the region indicates that more investment is necessary to enable many companies to stay ahead of the technological curve and be well positioned to capture new opportunities.

Talent Insights

The first part of this series focused on foundational technology officers, and found that 54 percent of Southeast Asian companies have a CIO in place and 10 percent have a CISO. These statistics make it clear that while companies have realized the value of investing in IT, information security is not yet top-of-mind, and will be a productive area for companies to increase commitment. 

In this part, we examine the extent to which Southeast Asian companies are hiring CDOs and CTOs, who typically lead the customer- and market-facing technology initiatives that are critical to digital strategy. Both roles are enablers of more advanced technology which build on the bedrock provided by IT and security. They allow for further innovation to help companies achieve their objectives.

Chief Digital Officers

Digital technology spans the spectrum from digital and mobile workplaces to smart products, e-commerce, cloud infrastructure and engagement with constantly-connected customers. It delivers new levels of speed, efficiency, precision, cost savings and revenue generation. Digital technology is becoming such an innate part of business that it is often a stand-alone function led by a Chief Digital Officer who is dedicated to leveraging the web, mobile devices and platforms for business usage. 

Our research indicates companies in Southeast Asia are highly-attuned to the opportunities that digital offers. On average, 32 percent of companies in the region have a CDO, ahead of the global average of 25 percent, with Singapore, Malaysia and Thailand leading the way.¹

The high prevalence of CDOs is due to the fact that many Southeast Asian companies are leapfrogging past traditional IT applications and moving directly towards mobile and digital-first businesses. Affordable smartphones, young populations, lack of big-box retail, and acceptance of e-commerce and online-to-offline (O2O) services all fuel this trend.² Yet, while the state of digital is laudable, companies will still want to establish a solid bedrock of IT standards, including security and privacy, to allow for continued technological advancement.

CDO Career Paths

CTO Career Paths

Looking Ahead

Many companies in Southeast Asia are family-owned businesses or in traditional industries that are not typically associated with digitalization. While these companies have achieved a breadth of talent in their digital function, the depth of expertise remains shallow. There is a dearth of talent who have led digital initiatives with measurable impact of increasing cost efficiency or revenue. 

Leading digital officers are intellectually curious and agile. They tend to look beyond compensation as they are more interested in the ability to make an impact. To retain this type of talent, it is essential for traditional companies to demonstrate their commitment toward digital transformation by providing sufficient autonomy and resources for the digital function. 

Correspondingly, companies in Southeast Asia will do well to build up their CTO bench strength. As the competition for suitable talent intensifies, one strategy to widen the talent pool is to look at CTO candidates from adjacent industries, or from among those who have led transformation in a traditional industry. 

Our experience suggests that neither CDOs nor CTOs for traditional companies need to be technical experts. It is a misconception that hiring talent from marquee digital or innovation companies is a be-all and end-all solution. In reality, executives with deep technical expertise are often mismatched to a traditional company’s culture, agility, willingness to transform, and expertise in translating between business and technical audiences.^{4, 5} 

For those reasons, it may be preferable to hire a technically-inclined business manager rather than a purely technical expert. Regardless of background, a key competency for a CDO or CTO is the ability to be a change agent in a complex, hierarchical or reluctant organization and lead a significant transformation.

Footnotes:

1. Consultancy.uk. “One Fifth of Large Corporates Now Have a Chief Digital Officer.” https://www.consultancy.uk/news/13818/one-fifth-of-largecorporates- now-have-chief-digital-officer
2. Google and Temasek. “e-Conomy SEA 2018”. https://www.thinkwithgoogle.com/intl/en-apac/tools-research/research-studies/e-conomy-sea- 2018-southeast-asias-internet-economy-hits-inflection-point/
3. Russell Reynolds Associates. “Digital Pulse 2018: Barriers to Transformation.” http://www.russellreynolds.com/insights/thought-leadership/digital- pulse-2018-barriers-to-transformation?rm=Recent%20Articles
4. Russell Reynolds Associates. “Visible Leaders Critical for Digital Transformation: Findings from Digital Pulse Southeast Asia 2017." http:// www.russellreynolds.com/insights/thought-leadership/visible-leaders-critical-for-digital-transformation-findings-from-digital-pulse-southeast- asia-2017?rm=Recent%20Articles
5. Russell Reynolds Associates. “Digital Pulse 2018: The Impact of Culture on Tech Enablement.” http://www.russellreynolds.com/insights/ thought-leadership/digital-pulse-2018-the-impact-of-culture-on-tech-enablement?rm=Recent%20Articles