What is the role of a technology executive when the whole business is built on technology? We offer first-hand insights from 11 of our expert consultants who are helping clients answer this question.
For decades, conversations with clients about their technology leadership needs were about CIOs and, subsequently, CTOs. Over time, isolated conversations about digital, innovation, data, analytics and cybersecurity began to slowly emerge. In recent months, however, it has become increasingly clear that these conversations need to merge. Business models are shifting to adapt to the needs of a more tech-centric, collaborative and agile organization—and the role of technology leadership is evolving in tandem. We interviewed several members of our Global Technology Officers Practice to get a better sense of what they’re seeing in the market.
Q: WHAT ARE THE MAIN CHALLENGES AFFECTING YOUR CLIENTS?
Tuck: First and foremost, companies in all sectors are needing to think and act more like technology companies. To make this happen, technology officer roles are moving from a supportive function to becoming key enablers of the company transformation agenda. As this technology enablement takes hold, our clients are simultaneously competing head to head versus disruptors while also fighting established companies for market share.
Frederic: It’s beyond just technology or digital functions. Entire organizational structures are impacted by the increasing convergence of technology and non-technology businesses.
Sandra: Additionally, as a by-product of transformation, businesses continue to struggle with legacy issues. For example, many companies that have grown through acquisitions have not integrated their technology well, and their systems don’t “speak” to each other.
Wolfgang: Ultimately, this means technology cannot be treated as a reactive function but must be core to the enablement of the business. Our clients are looking for game changers who have both the tech chops and the business savvy and evangelism to transform the organization. They’re looking for someone who can own tech, digital, data and cyber, and, occasionally, also product to make meaningful headway in turning their organizations into a more nimble, agile competitor. They are peers of the heads of the business and see technology as a tool to challenge business models and practices.
Ultimately, this means technology cannot be treated as a reactive function but must be core to the enablement of the business.
– Wolfgang Bauriedel
Tristan: Traditional technology leaders are now expected to be more flexible and informed on the latest trends (e.g., AI or blockchain). They are being stretched in completely new ways. The best are having greater strategic and “front-to-back” impact, creating or enabling new revenue streams, simplifying ways of working, and increasing resilience and reducing risk. This is a key board and CEO topic, and while some are adapting well to this increased exposure, many are struggling to step up effectively.
Q: ARE B2B COMPANIES CONFRONTING THE SAME CHALLENGES AS CONSUMER-FACING ORGANIZATIONS?
Eric: Very much so. The most noticeable recent change is that B2B companies have followed in the footsteps of B2C companies and have embraced digital. Suddenly, in the last 18 months, B2B companies are asking how they can become agile, nimble and unencumbered by the processes of a waterfall environment. Helped by IoT and sensor technologies, this is as much an efficiency play as a customer play.
Libby: I’d take it one step further and say that B2B and B2B2C companies are now operating more like B2C companies as they start to bring the customer into the center of everything they do. For example, we recently placed a “VP, digital” who eventually became “VP, digital customer experience” for a B2B2C company. Both types of organizations are figuring out how to simultaneously enable the business through technology while getting increasingly close to the customer.
John: But there is a challenge in matchmaking innovative talent with transforming B2B companies, which causes a lot of tissue rejection. Moving a software leader straight into a B2B industrial firm in the name of transformation is a difficult proposition to sell to the candidate, and it is one that requires cultural flexibility on the side of both the candidate and the firm.
B2B and B2B2C companies are now operating more like B2C companies as they start to bring the customer into the center of everything they do.
– Libby Naumes
Q: WHAT ARE THE TALENT IMPLICATIONS OF THIS SHIFT?
Eric: The visibility that the technology function has gained over the last five years has been astonishing—a continuous move out of the basement and into the executive suite. Put another way: In the late ’70s, you were a DP manager reporting to a controller, reporting to a CFO, reporting to the CEO. Now, roughly one-third of CIOs report to the CEO. The problem is that every technology leader wants to report to the CEO, but few of them are capable of doing so.
In addition, non-tech companies are looking for CTOs with software product development experience, but most software development leaders are hesitant to join a non-tech company because the products they develop are being used internally and are not sold externally. This is creating a need for software development leaders who are hybrids—the need to have the technical skills to build software but the political skills to operate within a larger enterprise where technology is a means to the end, and not the end itself.
Libby: Similarly, three years ago, the calls we were getting were about isolated chief digital officers; technology and digital were separate teams. Now both the digital and technology teams must have the experience and skill to fully understand the entire customer lifecycle, from front end to back end. Hence, the rise of roles such as the chief experience officer.
Tristan: That evolution in “digital” has added to the already increased confusion around the roles of the CIO and CTO. Companies are having difficulty deciding if they should be referring to technology or information in this key leadership position.
Ahmed: We’re seeing a similar pattern in the cybersecurity space over the last decade. Every organization wants a strategic, partnership-oriented security leader. The thinking is, “How do we get a security leader who can lead strategy while simultaneously partnering with the board, leadership team and wider business?” And, equally, “How do we retain that leader?” It’s no longer just tech and financial services companies—it’s across the board and more a question of “Who has seen the light and who else will in the next 12–24 months?”
Katrien: To both Eric’s and Ahmed’s point, the key here is collaboration. Organizations are looking for pragmatic innovators who not only can build strong relationships internally, but who also have experience building a strong ecosystem externally.
Sandra: For all technology roles (but especially cybersecurity), the biggest challenge is finding candidates who are galvanizing in the way Katrien has already described and who combine a strong technical understanding with an ability to translate it into solving business challenges.
John: Finding leaders who bring AI or ML and the broader bucket of innovation or predictive analytics along with the necessary maturity of tech and business acumen is tricky. These are new capabilities, and we have to be wary in finding candidates who have implemented it rather than just having written on the subject.
Q: HOW WILL TECHNOLOGY LEADERS CONTINUE TO ADAPT TO THE CHANGING LANDSCAPE?
Eric: Successful technology leadership will continue to be based around three key pillars: prioritization, negotiation and communication. 1) How do you prioritize your projects when orders outstrip the available capabilities, budget and technology? 2) How do you negotiate with vendors and third-party providers—and with your internal stakeholders—to best spend to realize company strategy and direction? And 3) How do you communicate with, and inspire, your team?
Successful technology leadership will continue to be based around three key pillars: prioritization, negotiation and communication.
– Eric Sigurdson
Wolfgang: The reality is that these leaders more than ever will need to span from an operational orientation, where they overhaul legacy mindsets and challenge the status quo, to a transformational one, in which they are fundamentally changing the way products and services are developed.
Katrien: I would add that CIOs have started to realize that their power no longer lies in the budget they manage or the number of people they lead, but rather that they should position themselves as “architects” at the core of tech-enabled innovation. Their evolution will be in their ability to be outwardly focused and to create ecosystems of “best-in-breadth” solutions.
Q: AND ON THE ORGANIZATIONAL SIDE, WHAT IS THE FUTURE OF THE TECHNOLOGY FUNCTION?
Lachlan: The boldest among us would say that the technology function will disappear—a logical extension of the pervasiveness of tech across functions, in which “everything as code” and “containerization” will be next steps. In this vision, tech strategy, architecture and the general CTO role will become part of the strategy and planning function, core IT will be covered by the COO, analytics and digital will be distributed to the frontline users, and the remainder will end up with the CFO and risk.
Sandra: Perhaps in the nearer term, as technology embeds further into business, I could imagine more crossover or rotations between the functions so organizations speak one language (and create less of a them-versus-us culture).
Q: ANY FINAL ADVICE FOR COMPANIES THINKING ABOUT MAKING CHANGES IN THEIR TECHNOLOGY CAPABILITIES AND LEADERSHIP?
Lachlan: Keep in mind that most of the organizations we think of as “disruptors” didn’t create new markets; they simply took advantage of the failings in current ones. It’s critical to scan and assess the market while keeping a high level of technology introspection.
Frederic: Focus less on the impact of a long-term technology strategy—which would have to be very flexible to account for the pace of change—and more on your culture, which is ultimately the differentiator between the laggards and the leaders.
Wolfgang: Exactly. Start with a mindset change. Digital and technology competencies and skill sets need to become increasingly common across the organization, including the board and the executive team. As ecosystems with technology partners become more relevant and the technology leader becomes increasingly integral to strategy, the product and technology functions will converge and the boundaries of the organization will become more fluid.
Lachlan: On the talent end, thorough assessment of potential leadership is a must. There are a large number of “snake-oil salesmen” out there (witness the proliferation of data scientists and tech officers rebranding themselves as cybersecurity experts). This is further complicated by the lack of exposure to senior management that specialists tend to have. Assessing soft skills is more important than ever.
Alignment between digital and technology is a strategic conversation, not a trend, and it should be top of mind for every CEO and board.
– Tristan Jervis
Eric: Agreed. Take the time to really understand the candidates—what are their motives besides the money? There must be enough money on the table to make the move warranted, but if the candidate is moving solely for that reason, they are often disappointed. It just further challenges us as search consultants to get to the bottom of “why is it that this candidate is really interested in this role?” Otherwise, they leave our client more quickly—whether for conflict with leadership, bad culture fit or because they don’t see a challenge in the role.
Tristan: Technology development is now moving so fast that even the most successful organizations are struggling to keep pace. The decisions surrounding the need to deliver existing and new services, experiences, and secure platforms have become increasingly complex (build, buy or partner?) and the range of vendors is changing.
However, the companies leading the race are focused not on “the next big thing,” but instead are focused on the agility and flexibility of business processes and core technology architecture. Alignment between digital and technology is a strategic conversation, not a trend, and it should be top of mind for every CEO and board.