The changing face of the CTO

When it comes to tech­nol­o­gy, the risks of busi­ness­es falling behind the curve are clear. Indeed, in the after­math of the 2008 finan­cial cri­sis, numer­ous lega­cy busi­ness­es were caught on the hop by nim­ble, dig­i­tal-first dis­rup­tors – the trans­for­ma­tion of the taxi indus­try through ride-shar­ing apps is a prime exam­ple. Mean­while, star­tups such as Airbnb and Ven­mo began using emerg­ing tech­nolo­gies to dis­solve the bound­aries between indus­tries and cre­ate new busi­ness mod­els. 

The rate of dig­i­tal dis­rup­tion has only increased in the years since. The out­break of Covid-19 is esti­mat­ed to have accel­er­at­ed the wide­spread adop­tion of dig­i­tal tech­nolo­gies by sev­er­al years, dra­mat­i­cal­ly increas­ing the num­ber of inter­nal and exter­nal threats that busi­ness­es face. 

Chief tech­nol­o­gy offi­cers (CTOs) are on the front­line of address­ing these chal­lenges. While there are vari­a­tions in what the remit of a CTO includes, they are usu­al­ly respon­si­ble for man­ag­ing and dri­ving val­ue from tech­nol­o­gy with­in an organ­i­sa­tion. In oth­er words, they must mon­i­tor any emerg­ing, dis­rup­tive tech­nolo­gies and turn these threats into sus­tain­able oppor­tu­ni­ties for their busi­ness. 

James Donkin is the CTO at Oca­do Tech­nol­o­gy. He believes that the dizzy­ing speed of tech­no­log­i­cal change in the past decade has great­ly expand­ed the strate­gic func­tion of his job. “In the past few years, we’ve seen the role of the CTO become less siloed as tech­nol­o­gy has become more ubiq­ui­tous. A mod­ern-day CTO works across the busi­ness, sup­port­ing and advis­ing mul­ti­ple func­tions.

Technology strategists

Today, CTOs are strate­gists, work­ing with the lead­er­ship team to build busi­ness plans and roadmaps that align with the wider com­pa­ny vision, he says. “To do this, it’s cru­cial for CTOs to have a deep knowl­edge of the trends and emerg­ing tech­nolo­gies which could give their organ­i­sa­tion an advan­tage.” 

And what seems to sep­a­rate the best busi­ness­es from the rest is the inclu­sion of the CTO in com­pa­ny-wide deci­sion-mak­ing. A recent McK­in­sey study found that near­ly three-quar­ters of top-per­form­ing com­pa­nies high­ly involve their most senior tech lead­ers in set­ting the over­ar­ch­ing com­pa­ny strat­e­gy. 

The increas­ing strate­gic impor­tance of the CTO is unsur­pris­ing giv­en the sig­nif­i­cant threats that tech­nol­o­gy pos­es to busi­ness­es. Take cyber­se­cu­ri­ty: the wide­spread adop­tion of mobile and cloud plat­forms, part­ly neces­si­tat­ed by the pan­dem­ic – plus the increas­ing use of emerg­ing tech­nolo­gies as a com­pet­i­tive advan­tage – has dra­mat­i­cal­ly increased a business’s attack sur­face for hack­ers. 

CTOs are at the fore­front of set­ting a company’s strat­e­gy for com­bat­ting cyber­crim­i­nals, accord­ing to Yvonne Bernard, CTO at Hor­net­se­cu­ri­ty. How­ev­er, she notes that wide­spread hybrid work­ing has com­pli­cat­ed a CTO’s abil­i­ty to counter hack­ers. 

“The pan­dem­ic has forced lots of com­pa­nies to accel­er­ate their dig­i­tal trans­for­ma­tion and flex­i­ble work­ing poli­cies, which, in turn, has led to changes in lead­er­ship styles and com­mu­ni­ca­tion with team mem­bers,” she says.

As a result of changes to com­mu­ni­ca­tion chan­nels, new paths opened up for hack­ers to mount cyber attacks. “For instance, peo­ple are unlike­ly to ‘go over’ to their col­league if there’s a poten­tial phish­ing email, and they are less like­ly to pick up their phone,” says Bernard.

Of course, cyber­se­cu­ri­ty is just one area of a CTO’s work that has been com­pli­cat­ed by recent changes to work­ing behav­iour. Along­side these inter­nal chal­lenges, CTOs are also grap­pling with chang­ing cus­tomer habits. 

Dur­ing the peak of Covid-19, in 2020, e‑commerce was pret­ty much the only option avail­able to cus­tomers for their every­day neces­si­ties. But now, with the worst of the pan­dem­ic hope­ful­ly behind us, this dig­i­tal growth has start­ed to plateau as cus­tomers spend less time with­in a company’s online chan­nels. 

Retain­ing these cus­tomers will be high on the pri­or­i­ty list for most busi­ness lead­ers, par­tic­u­lar­ly giv­en the ongo­ing eco­nom­ic dis­rup­tion. To achieve this, busi­ness­es will have to invest in improv­ing the areas that mat­ter most to dig­i­tal con­sumers, name­ly user expe­ri­ence, secu­ri­ty and pri­va­cy. 

From back office to key decision maker

CTOs will like­ly be respon­si­ble for over­see­ing these dig­i­tal inno­va­tions. Austin Shep­pard, CTO and vice-pres­i­dent for trips engi­neer­ing at Booking.com, believes that task­ing CTOs with such an impor­tant job reflects their chang­ing func­tion. The job is no longer a pure­ly tech­nol­o­gy-focused role, he feels. Instead, it’s a strate­gic posi­tion with com­pa­ny-wide sig­nif­i­cance. 

“A decade ago, the CTO was gen­er­al­ly more of a back office and sup­port role than it is today,” he says. “It’s now much more like­ly to be a posi­tion that plays a key role in strat­e­gy, oper­a­tions and busi­ness deci­sions at most com­pa­nies. 

“Indeed, when you look across var­i­ous indus­tries, increas­ing­ly the CTO is evolv­ing into a ‘front seat’ exec­u­tive, along­side the chief finan­cial offi­cer, the chief mar­ket­ing offi­cer and the chief oper­at­ing offi­cer.” 

The CTOs of yes­ter­year tend­ed to come from a tra­di­tion­al engi­neer­ing back­ground. Although that equipped them with in-depth tech­ni­cal knowl­edge, it per­haps left some lack­ing the strate­gic skills that oth­er C‑suite lead­ers had gained over the course of their more var­ied careers. 

But giv­en the increas­ing use of tech­nol­o­gy as a com­pet­i­tive dif­fer­en­tia­tor between busi­ness­es, the required skill set of a CTO today is chang­ing. While they still need to have an in-depth knowl­edge of tech­nol­o­gy and emerg­ing trends, they also need to have the strate­gic vision to set a course for a com­pa­ny that mix­es today’s tech­nolo­gies with the dig­i­tal trends of tomor­row. 

Jason Fos­ter, CEO and founder of data and ana­lyt­ics con­sul­tan­cy Cynozure, agrees. “As busi­ness­es become more and more tech­ni­cal­ly dri­ven, it’s like­ly that we’ll see an increase in the num­ber of CEOs from a CTO back­ground. CTOs are key strate­gic allies for CEOs and deserve a seat at the top table.”