Every company must be able to keep up with a rapidly changing competitive environment and the speed of the digital age. That’s where the chief technology officer (CTO) comes in. The recent pandemic underscores the fact that technology disruption can bring a business to its knees, virtually overnight. Scores of business were forced to work from home and figure out how to do it — in an instant.
Further, technological innovations combined with the intelligent use of data allow startup companies to create entirely new business models, turning incumbent industries upside down. Consider how Netflix obliterated Blockbuster. Or how Airbnb is taking a chunk from the hospitality industry. When companies must pivot their business strategies, the CTO is the first line of defense against disruptive new market forces.
The CTO is not only focused on the competitive environment. Internally, companies are using technological innovation to break down functional silos. These days, it’s all about digitalization. Those who do it best are able to offer a superior, end-to-end customer experience. Companies that fail to keep up with the level of service consumers have come to expect will struggle to maintain market share. Clearly, the CTO role is vital to your business.
The CTO Role Defined
Your company’s CTO must be able to play multiple roles in order to be successful. While the CTO of course possesses technical expertise, their responsibilities reach far beyond coding or engineering. They play an increasingly important strategic role, collaborating with every part of the business as well as working beyond company borders.
As technology becomes increasingly important to your company, the role of CTO expands beyond the maintenance of the infrastructure. Yes, the CTO is in charge of the company’s IT department and operations, a position that requires a variety of skills. More importantly, however, the CTO must be committed to continuous learning and development. It’s not just a matter of what the company needs today. It’s also where the industry is headed and the company’s future requirements. The CTO not only oversees ongoing operations, they also bear responsibility for cybersecurity, innovation and product development — all while keeping close tabs on the ever-evolving vision of the company.
For even the smallest of companies, CTOs must have skills in leadership, IT and project management, and software architecture. Further, in response to the move toward digital transformation, CTOs are asked to drive technological innovation and digital product development, while maintaining a keen eye on broader technology trends.
CTO vs. CIO: What’s the Difference?
Many companies have only one: either a CTO or a chief information officer (CIO). Regardless of the name, this executive occupies the most senior IT role. However, some larger businesses have both. So what’s the difference?
The CIO typically engages with the business and the process owners. They ensure that the internal stakeholders get the systems and services they want. Conversely, the CTO has operational responsibility and is in charge of sourcing and implementing technology. These are the details of the technology, i.e., the system architecture. The CTO must understand the relationships, linkages and constraints of every component of the system and its environment.
Both roles are a critical part of the C-suite, interacting extensively with the CEO and other executives on strategic issues.
Top 5 CTO Responsibilities
While this diverse role involves a very complex set of tasks, they can be organized into five basic responsibilities, which are described as follows.
- Technical Vision
Before doing anything else, the CTO must work with the CEO and other executives to develop a technical strategy for the company. This involves goal-setting, discussing options and analyzing risks. Your technical strategy must align with your company’s overall business objectives. So the CTO will need both technical skill and good business sense to successfully fulfill this responsibility.
Working with engineering and production VPs, the CTO aids recruitment and retention efforts, streamlines production operations, and advocates for innovative ideas, high productivity and individuals on the team. The CTO maximizes the efficiency of production efforts by coordinating the various teams and operations involved in the process and ensuring there is no overlap.
- Business Development
The CTO has a responsibility to your business partners. They fulfill this role by aiding acquisition efforts, building the company’s presence and voice, and keeping up on competitive trends, both in the market and among partners. The CTO keeps an eye out for new technological developments that can help the company improve efficiency and increase customer satisfaction.
- End-User Responsibility
The CTO provides market expertise to the sales organization in the company while helping build relationships with potential customers. They promote confidence in the company’s vision, participate in customer meetings and work diligently to meet end-user needs.
For the public, the CTO provides a face for your company’s technical vision. This is done by engaging in speaking opportunities, conferences, media activities, etc. Also, the CTO utilizes social media and online marketing strategies to build a strong online presence. Within the company, the chief technology officer works with the marketing team to develop strategies and plan community-related efforts.
Like most salary ranges, CTO compensation varies widely depending on education, experience, the size of the company and who you ask. According to SalaryExpert, average CTO compensation in the U.S. is $220,535, with an average bonus of $50,128. Entry level salaries for those with one to three years experience will be significantly less, averaging $140,446. For senior level CTOs with eight or more years experience, the average salary is $348,648.
Of course, in addition to salary, CTOs frequently negotiate for better benefits. These include:
- Moving costs.
- Paid time off.
- Sign-on bonus.
- Student loan repayment.
- Tuition reimbursement.
- Paid cell phone .
- Time off to volunteer.
- Matching charity contributions.
- Stock options.
- Child care costs.
The CTO’s responsibilities are many and varied, from the C-suite on down. The role is critical to every functional area of the company including production, sales, marketing and more. The exact shape of the role is highly dependent on the company size and its position in the industry. But the CTO is as critical to the development of a startup high-growth company as it is for large, established corporations.
Technology is the great equalizer. The smallest of businesses can be on equal footing with industry giants given the right technology strategies. That’s the purview of the chief technology officer.
Whether you’re looking to hire a CTO, CIO or other executive leadership position, Y Scouts can help you find the right person for the job. We are a purpose-based, performance-proven leadership search and development firm. Our proven methodology is focused on transforming how people and organizations connect to work that matters. At Y Scouts, we call it hiring on purpose.
This post was updated for clarity in Septembr 2021