Over the last 50 years or so, technology has evolved and expanded into many aspects of our lives. Among the most dramatic is the use of technology in business. Business today can hardly be conducted without the use of technology; more specifically, without the use of computers and workstations.
But it is not just about workstations; the use of tools such as Microsoft Office or Star Office, for those like me that like Open Source tools, or email readers, or other specialized tools like Photoshop and the likes. It is about the entire set of tools needed to run a company, large and small. It is about the infrastructure that supports today’s business and the applications used to gain efficiencies. It is about the tools that we use to communicate ideas and experiences; the tools that we use to work out problems and come up with their solutions; the tools to track and coordinate. And in what is about, the role of the Chief Technology Office (CTO) is defined.
But before going further let’s define a concept. CTO is a role, not a title (although it is also a title). In many cases the VP of Technology or VP of Engineering are the titles, but their roles is such as the CTO’s. So, more specifically what is the role/responsibility of the CTO? Oded Noy (Zag.com’s CTO) stated it well:
1. Understand the business
2. Get the talent and retain it
3. Align the talent with the business.
As powerful as these statements are and for as much respect as I have for Oded, I think these are incomplete. Actually, let me rephrase it: these statements are complete and a closed system provided that you are talking about the Technology of the Business; but if you are talking about the Business of Technology then there are a great many other role statements missing:
4. Create innovative products
5. Create innovative technologies that can be leveraged on an M&A or IPO
6. Protect the company’s assets
7. Develop growth strategies
8. Understand the market and product marketability
9. Understand the competition and the gap advantages or disadvantages
10. Understand and help define the processes and procedures across departments.
(Number 10 is often shared with the COO, but there are inherited processes and procedures in technology that must include other departments. e.i.: collecting business requirements, coming up with creative elements, marketing campaigns, etc.; and more so in technology companies.)
The technology of the business has to do with the technologies and applications to create, grow and run a business. It has to do with the features of those applications and the implementation of those features. It is a tactical approach to developing solutions and it is rooted in the here and now and answers day-to-day needs. It is, in many ways, highly focused and execution oriented.
The technology of the business answers immediate needs and is very REACTIONARY to market fluctuations.
The business of technology is about looking at both, the short term needs and long term strategies. It is about what’s needed to run the company today and very much focused on execution, but at the same time it is about plotting courses. It is about, in the case of technology companies or companies with strong technology components, building equity and technology assets that can be leveraged. It is about value, value and value. It is about answering questions like:
• How is the market going to change and what can I do to change with it, not after it?
• How can I get ahead of my market and competition by reducing time to market?
• How can I lead my market with the most innovative products?
• Where do I want to be in 12 months, 24, 48, etc.?
• What products should we develop and what is the product roadmap
• What are the priorities derived from the product roadmap
• Who do I need to hire now, in 6 months and so on?
These are just a few of the questions that are about the business of technology.
It is true that with startup the mode is about the technology of the business, or at least that is what we have been taught to think and that is how we act. But it does not need to be like that. Time to market is very much a concern that we all have, but what is the point on rushing to market with a half baked product that then our competition can pick apart and improve upon it, while we burnt our brand? Or worse yet, what is the point of rushing to market a product that will be obsolete in 6 months? Specially in a startup, where resources are always scarce, plotting the right strategy, not “rushing”, coming up with a flexible product roadmap and priorities will get a company closer to success with less headaches and technologies and products can be easily reused and repurposed.
For late-stage startup and midsize companies, taking a strategic and business centric approach to technology should produce better and faster results and faster growth.
And finally for larger companies, it will make them more agile and not so slow to react to market changes. Thus, deep pockets will remain deep.
A while back I heard the CFO of a company, I believe it was EMC. They were rolling out a new product that had the potential to cannibalize the existing product line. Of course the analysts recognized the potential and presented a scenario where the new product, at a lower price tag, definitely cannibalized existing revenue. The CFO very calmly answered: Better us than our competition. I never followed up to see how the strategy developed and what happen to products and revenues. But EMC is still around. This is a clear case of the business of technology.
Additional information on CTOs can be found on Werner Vogels’ blog, where he discusses the role of the CTO in terms of corporate innovation.