Evolution of the CTO
The Financier Worldwide article, “Evolution of the CTO,” featured the firm's research and quoted Tristian Jervis on the role of the Chief Technology Officer. The article is excerpted below.
In a business world increasingly beholden to digital technologies, the role of chief technology officer (CTO) has steadily ascended the corporate hierarchy to become a critical component of day-to-day operations.
Even a cursory examination of the roles and responsibilities ascribed to a CTO reveal the extent of the function’s sway today: managing physical and personnel technology infrastructure, including deployment, network and system management, integration testing and technical operations development. CTOs also oversee client relations to ensure that expectations are effectively developed and managed.
According to the 2017 Russell Reynolds report, ‘Inside the Mind of the Chief Technology Officer’, the CTO role is evolving faster than ever before, requiring the post-holder to connect and translate the creation and management of new products and services with more traditional enterprise IT and operational enablement activity.
The report also observes that while the scope of the CTO role and pace at which it is evolving varies by industry, company size, geography and culture, almost all companies are expanding the technology leader’s responsibilities, as the realisation of delivering digital products and services, data and analytics capability and customer experience is primarily differentiated by the technology function.
The upshot, determines the report, is that CTOs not only need to have broad technical expertise but also the strategic and commercial acumen to challenge, translate and drive decisions across the enterprise and the vision and market connectivity to bring the outside in.
“The CTO is one of the most forward-looking roles in a company, delivering cutting-edge digital and cloud enablement, and usually sitting on the executive board,” says Tristan Jervis, co-leader of the technology practice at Russell Reynolds. “A CTO uses technology to enhance the company’s product offerings, and create and engineer platforms and applications to meet business and customer needs, particularly where customer experience is concerned.
“The role tends to be elevated in companies where technology is the business or product, and contributes to the strategic vision of a company,” he continues. “The visibility that the technology function has gained over the last five years has been astonishing – a continuous move into the executive suite.”
“Business models are shifting to adapt to the needs of a more tech-centric, collaborative and agile organisation – and the role of technology leadership is evolving in tandem,” concurs Mr Jervis. “To make this happen, technology officer roles are moving from a supportive function to becoming key enablers of a company’s transformation agenda and strategy. In B2C and B2B companies alike, this means bringing the customer into the centre of everything they do and understanding the entire customer lifecycle from front-end to back-end, rather than sitting in technology or digital silos.”
“CTOs are being stretched in completely new ways,” says Mr Jervis. “They are expected to be more flexible and better informed on the latest trends and technologies, while also being a business-savvy visionary capable of bringing the company along a transformation journey. The best CTOs are achieving greater strategic and ‘front-to-back’ impact, creating or enabling new revenue streams, simplifying ways of working, and increasing resilience and reducing risk.”
“Regulation is having an impact on cost and time-to-market in some industries, though this is a manageable consideration,” suggests Mr Jervis. “Technology development is now moving so fast that even the most successful companies are struggling to keep pace. The decision surrounding the need to deliver existing and new services, experiences and secure platforms have become increasingly complex and the range of vendors is changing.
“However, companies leading the race are focused not on the ‘next big thing’ but are instead focused on the agility and flexibility of the business processes and core technology architecture,” he continues. “Alignment between digital and technology is a strategic conversation, not a trend, and should be top of mind for every chief executive and board.”
“Many companies are lost in the semantics of chief information officer (CIO) or CTO responsibilities, and in deciding if they should be referring to technology or information in this key leadership position,” asserts Mr Jervis. We see organisational alignment issues where there is still confusion from the board and chief executive on technology as the differentiator, and where the technology function lacks resilience and maturity within the business. The evolution in digital has added to the confusion around the role of the CTO, and whether a chief digital officer (CDO) still exists – raising questions around ownership of delivering experience of products and service through technology.”
“These leaders need to span from an operational orientation in which they overhaul legacy mindsets and challenge the status quo, to a transformational one, in which they are fundamentally altering the way products and services are developed,” believes Mr Jervis. “Their evolution will be in their ability to be outwardly focused and to create ecosystems of ‘best-in-breadth’ solutions. Enablement of the business strategy has taken precedence over cutting budget costs – the CTO must use technology to add to top line growth.”