The chief technology officer: strategic responsibilities and relationships: today's CTO is expected to contribute technology expertise to business strategies--not to create independent research labs and strategies that are only loosely coupled to the company's profit engine.
By the late 1980s, companies began to anoint R&D laboratory directors as chief technology officers. Technology was becoming such a prevalent part of company products and services that senior management needed an operational executive who could understand it and provide reliable advice on its application. However, executive search agencies, under direction from their corporate customers, continued to fill the CTO position with the same people they had recommended to lead R&D laboratories (2). Experience with these candidates soon made it clear that the responsibilities of the CTO were significantly different from those of the research scientist. The CTO position called for a technologist or scientist who could translate technological capabilities into strategic business decisions. Lewis expresses this clearly:
The CTO's key tasks are not those of lab director writ large but, rather, of a technical businessperson deeply involved in shaping and implementing overall corporate strategy (3).
Although large companies such as General Electric, Allied-Signal and Alcoa created the position of CTO in the late 1980s, the position has also played an important role in computer and Internet companies in the late 1990s. Many of these provide products and services that are pure technology. Consequently, the CTO can play a prominent role in directing and shaping their entire business.
The CTO position is far from being standardized. Each company has unique requirements for its CTO and provides a unique organizational structure into which the person will fit. This section describes some of the more prominently cited responsibilities of the CTO.
Monitoring and Assessing New Technologies
The rate at which technology changes guarantees that knowledge and expertise gained several years earlier will no longer be completely valid. This creates the need for a technologically-current person to advise senior executives during strategic decision-making. Alcoa's CEO Paul O'Neill stated that a CTO should be expected to, "identify, access, [and] investigate high-risk, high-return technologies possessing potential application within existing businesses or for creating new businesses" (4). Knowledge that is several years old cannot effectively guide this type of assessment. If a company is planning to modify its production process or add new products, it must understand how the latest technologies can contribute to those plans.
As an illustration, Peter Bridenbaugh, Alcoa's then-CTO, recognized the significance of technical advancements that made it possible for mini-mills to operate profitably and to assault the markets held by large metal-producing companies like Alcoa (4). Because he was actively monitoring new technologies and assessing their applicability to business opportunities, Bridenbaugh was in a position to advise Alcoa of this threat while mini-mills still occupied a very limited niche in metals production. Although other Alcoa executives had come up through the operational and scientific ranks, their focus had changed to organizational and financial issues. Because they were no longer intimately familiar with the latest scientific developments in metal production, the emergence of mini-mills did not appear to them as a serious threat to Alcoa's business. Junior engineers, on the other hand, may have realized that new technology made it possible for small mills to produce high-quality products at prices competitive with Alcoa's. But those engineers neither possessed the experience necessary to support their opinions to upper management, nor did they have access to those senior decisionmakers.
For these reasons, a CTO who embodies current knowledge, is networked with company engineers, has years of experience, and has access to executive decision-makers is a valuable resource in recognizing important new technologies and bringing them into the company's strategic decision-making process.
From a field study of 25 CTOs, Bert Thurlings of Philips Research Laboratories and Koenraad Debackere, of the University of Gent, arrived at conclusions similar to those of O'Neill and Bridenbaugh (5). CTOs themselves feel that one of their most important responsibilities is to monitor, evaluate and select technologies that can be applied to future products and services. A significant investment in the active exploration of all relevant technical areas is required in order to identify opportunities buried amid all of the information available. Internal company managers and scientists are often qualified to perform this analysis, but are so focused on day-to-day operations that they do not have time to study broadly and deeply enough to identify those technologies that will be essential in the future. These people frequently identify important changes after a competitor has already implemented a similar idea. However, by that time, it is too late for the company to capture the lead in the application of that technology to products, services and production techniques. Such a company would find itself playing catch-up to the new leader in the field.
The opinions and experiences expressed by large companies like Alcoa and Philips are echoed by the CTOs of the new generation of information companies as well. Pavan Nigam, CTO of WebMD, reports that an important part of his job is reading and evaluating large amounts of data about new products (6). Information service vendors are so eager to attract the attention of the media and of customers that their claims are often exaggerated. Managers and scientists within WebMD could be misled by these claims and expend irreplaceable time and money working with products that are not able to deliver the promised capabilities. Therefore, Nigam provides a valuable service by remaining abreast of vendor claims and by learning about the experiences of other companies using those same products and services. This allows him to direct WebMD away from ineffective products and toward others that do solve its problems.
Darren McKnight, the CTO of defense contractor Titan Corp., listed the evaluation of new technologies as his number one responsibility (7). After Titan developed an electron beam technology to sterilize medical components, and the company's senior technologists recognized that this capability could also be used to pasteurize food products, Titan created the Surebeam subsidiary to pursue this market. Following the anthrax contaminations in Washington, D.C., McKnight and others recognized that Surebeam's systems could be used to kill anthrax hidden in postal envelopes. Backed by existing research and prior publications on the subject, Titan created a new market for electron beam systems and assigned a facility to sterilize selected mail destined for the nation's capital. The expertise of business executives, unaided by technologists, would not have been sufficient to identify such a unique opportunity. Situations like this demonstrate the real contributions that can be made by a CTO.
Michael Porter explains that, "companies have to find ways of growing and building advantages rather than just eliminating disadvantages" (8). Strategic innovation is a significant part of this. In some industries, new products based on new technology are the lifeblood of the company. In other industries, core products remain unchanged for decades, but the processes used to create them are continually evolving and becoming more efficient.
Procter & Gamble recognized that its products were mature, but that its scientists had a number of good ideas for improving existing products and creating new ones. The company's CEO and CTO created the Innovation Leadership Team to find and allocate funds to support these new ideas. This program quickly led to 11 new products and a number of innovations waiting to be turned into products, giving Procter & Gamble a significant lead on competitors (9). Just as Alcoa's Peter Bridenbaugh learned that emerging technology was creating a new class of competitors for rolled metal products, companies that create consumer products like laundry detergent, toilet paper, gasoline, and furniture must apply technology to improve their production processes and add an edge to their products that competitors cannot match.
Paul O'Neill emphasized that established companies need a CTO to "assure development of fundamental technologies offering clear competitive advantage for current and future businesses" (4). Walter Robb, former CTO of General Electric Medical Systems, believes that "it is the responsibility of the CTO to push the boundary on risk taking" (10). The CTO's relationships with the R&D scientists equip the CTO with knowledge about the state-of-the-art that will allow him or her to recommend risks that have a high probability of success. GE's innovative designs for CAT scanners and magnetic resonance imaging systems accepted high levels of risk in order to create unique products containing features beyond the technical reach of their competitors. Those calculated risks led to a market-dominating position that extended over a decade.
CTOs like Robb take risks because they have a vision of where the company should take its products in the future. Such product vision is one of the key reasons for employing a CTO. Ron Moritz, CTO of Symantec, says:
One of the key roles of the CTO is to provide the technical vision to complement the business vision, setting the tone and direction for the company's technologies. Leadership, in this context, comes from being able to set the technical course and from being able to define what the company 's products and technologies might look like in two, three, or more years (6).
Product vision should be based on an intimate understanding of the power of the product's current technology component, and knowledge about innovations and changes that are occurring in related fields.
Michael Earl emphasized that investments in technology and innovation must be connected directly to business strategy. In fact, he found that the most successful approach was when a company did not have a separate technology strategy; instead, the best technology strategies were those that were fully integrated with the business strategy (11). CTOs are now expected to contribute technology expertise to business strategies, not to create independent research laboratories and strategies that are only loosely coupled to the company's profit engine.
Mergers and Acquisitions
Mergers and acquisitions (M&A) are an important part of the growth strategy of many companies, including strategies in financing, governmental oversight, taxation, corporate culture, and technological synergy. Unfortunately, after studying more than 5,000 acquisitions, divestitures, spin-offs, equity investments, and alliances, Frick and Torres discovered that over half of the deals resulted in a lower market value for the resulting entities (12). Other McKinsey studies in the late 1980s reported that, at that time, more than 70 percent of acquisitions failed to earn back the cost of capital used to purchase the company (2).
Frick and Torres maintain that there are two major causes of this problem. First, the acquisition becomes an exercise in financial engineering. It focuses on successfully structuring the finances required to make the acquisition possible and loses sight of the strategic objectives of the acquisition. Second, it is a form of corporate ego-boosting. Corporate leaders are eager to build an empire or capture high-profile products. Frick and Torres contend that, in contrast to these two motives, value-creating mergers and acquisitions are focused on the strategic value that can be achieved through the transaction. To make this happen, however, it is essential that the due diligence leading up to the deal include an evaluation of the value of the technologies being acquired.
The CTO's role in due diligence includes evaluating patents, reviewing technical publications, and studying trade data to determine the value of the target company and to rank it against its competitors. Darren McKnight at Titan Corporation includes these types of investigations in his list of key responsibilities (7). At Titan, each deal has included a strategic evaluation of the technologies within the target company and the synergies that those technologies could generate within the Titan family.
Marketing and Media Relations
Media attention to company products and capabilities plays an important role in the success of those products. Constructing the information and images released to the public is primarily the responsibility of the marketing and sales departments. However, technical expertise is required to accurately translate some product details into terms that can be marketed.
Rajeev Bharadwaj, CTO of Ejasent, a young Internet company, plays an active role in communicating with the media (13). He believes that the CTO must translate technical details into real customer advantages that are superior to those of competing products. Internet startups must also create convincing presentations and demonstrations for venture capitalists (VCs). The VCs provide the initial revenue stream necessary to turn an idea into a viable product. In the early stages of a company, the VCs are the customers and the marketing story is focused on them rather than the actual consumers.
In addition to creating media-worthy stories for publication, companies create media-worthy experts to be interviewed and quoted. Trade magazines and television producers rely upon statements by insiders and expert; who can speak authoritalively on a subject. These expert "are like politicians--they're made, nurtured, and coached" (8). They are also made constantly accessible to the media for consultation.
Ron Moritz, CTO of Symantec, was an expert in Internet security, but the media was not aware of his expertise. Therefore, Symantec's president took it upon himself to turn Moritz into a media recognized and consulted expert (6). This was part of the corporate strategy at Symantec and contributed to the success of its security products.
Government, Academia. Professional Organizations
Prominent technologists are often called upon to provide services to government, academic and professional organizations. These service s combine civic and professional duty with the opportunity to convey a positive image of the company and its products.
Governmental committees investigate issues of national importance. Service on these committees is an honor, but it also requires the dedication of time, energy and money that could be focused on other pursuits. Participation brings several rewards that are an alternative form of payment.
* Tacit recognition as a leader in the field.
* Opportunities to influence the decisions of the committee in a professionally positive manner.
* Early and intimate access to the work generated by the committee.
Because many CTOs possess advanced college degrees, they tend to have multiple relationships with members of academia. These relationships lead to partnerships and funding for research that is of mutual interest. Companies participating in these activities generally structure the partnership such that they have first access to the results of the research.
One of the most commercially successful and widely recognized industry/academia partnerships is the Media Lab at Massachusetts Institute of Technology. This lab investigates the application of computer technologies to practical social problems. In 2001, the lab received 95 percent of its $36 million budget from 140 corporate sponsors (14). There are hundreds of similar, but smaller, examples of corporate and academic partnerships that can involve participation or oversight by the CTO. As a business person, the CTO must ensure that money and time spent on such projects is aligned with the corporate strategy and has a realistic prospect of contributing to the company's competitive advantage in the foreseeable future.
Finally, CTOs are called upon to participate in professional organizations and their meetings. Similar to government committees, these are an opportunity to project a positive image within the profession and to communicate important messages. Presentations allow the CTO to tell partners, suppliers, competitors, and customers about their expertise, products, future strategy, or commitment to an industry. Both Bill Waite, president of Aegis Technologies, and David Zeltzer, CTO of the Fraunhofer Center for Research in Computer Graphics, maintain that the relationships they build through professional organizations contribute directly to their business base (15,16).
CTOs can also play an important role in creating the internal culture. Specifically, the CTO should initiate activities and policies that create a technology-friendly culture aligned with the company's business strategy.
Other technology leaders throughout a company may create policies and practices that attempt to attract and retain the highest quality people available. If these are not aligned with the corporate business strategy, however, they may attract excellent people who are not able to contribute to business objectives.
The CTO should ensure that policies and practices are implemented that attract the right kind, right number and right placement of technologists. This will require the establishment of formal and informal networks to implement the policies and to ensure that they are aligned throughout the company (3). These networks will also serve as the conduits through which corporate vision and direction can be communicated.
Informal networks of technologists can be used to mediate organizational problems that extend beyond the control of operational managers. In some companies, these networks tend to catalyze unofficial practices that are aimed at improving internal performance. Lewis and Lawrence report the emergence of internal publications, technical seminars, lists of known experts, and technical expositions (3).
Relationships that Empower the CTO
The CTO position was initially created to ensure that senior management paid appropriate attention to their own corporate technological capabilities (17). Attracting this attention and operating as an effective member of the executive team requires that the CTO nurture relation ships with a number of people and groups internal and external to the company.
Chief Executive Officer and Executive Committees
Providing strategic advice to the CEO and the executive committee requires much more than technical expertise. The CTO must earn the trust and confidence of the CEO. In previous positions, the CTO may have earned the respect and confidence of peers and superiors through technical prowess and performance. But this new position requires business prowess and financial performance (1). The CTO must exhibit a clear understanding of, and dedication to, improving the competitive position of the company.
The acceptance of the CTO as a business strategist is an important step. It will determine whether the CTO is treated as an equal member of the executive team or is isolated as an outside source of technical advice and information. Edward Roberts' study of the strategic management of technology indicates that most companies include the CTO on the executive committee, along with the CEO, COO, CFO, and CIO. In North America, 60 percent of the companies surveyed included the CTO on this committee. In Europe, the number was 67 percent and in Japan it was 91 percent (18). In some companies, the CTO actually teaches senior management about the importance of technology in their industry. The goal is to ingrain technology as a significant consideration in all executive decision making (19,20).
CTOs are not the first officers to face the challenge of inclusion or exclusion from the strategic process. When the CIO position emerged, they too were branded as technologists who could not function as business strategists (21). This image has diminished as CIOs have shown themselves to be just as effective at making business decisions as their management-schooled peers.
Kwak cites the results of a study of pairs of executives at 69 companies that indicated that the business acumen of CIOs was equal to that of their executive peers. Another study of 417 construction company executives found that 80 percent of the CIOs in those companies were considered equal contributors to the strategic decision making process (22).
The CTO should be able to learn from the integration experience of the CIO. Executive committee members should also recognize that the technological stereotype that was inaccurate for the CIO might also prove to be inaccurate for the CTO.
If the CTO is to provide business decisions and advice, there needs to be some measure of the quality of this advice. The CTO's performance should be measured against a plan worked out with the CEO. This plan may include achieving milestones, introducing new products, reducing costs, reducing uncertainty, and selecting the right research projects to fund.
Bill Waite advocates a customized set of metrics for the CTO (15). Within his company, these included maintaining and teaching technology within the organization, measuring the speed at which technology is brought into the organization, the rate at which the CTO turns technology into salable intellectual property, and the CTO's effectiveness as the custodian for research and development money.
Chief Information Officer
Many organizations have a difficult time separating the responsibilities of the CTO from those of the CIO, which can make the working relationship between the two very difficult. At the 2001 InfoWorld CTO Forum, CTOs from Sun Microsystems, eBay, Dell Computer, and other companies identified their responsibilities as being externally focused while the CIO's responsibilities were internally focused (23). Corporations have realized that they need a CIO to oversee the application of technology to internal operations. This has included computer systems for accounting, billing, telephony, security, and a host of other functions. Prior to the creation of the CTO position, the CIO was the sole executive technologist and was often called upon to support manufacturing computerization, the purchase of computer-aided design packages, and strategic decisions for injecting technology into products (21).
The internal/external division of responsibilities is a useful differentiation, but it leaves significant gray areas that can result in turf wars between the two players. Therefore, the CTO's relationship with the CIO should be based on a more clearly defined division of responsibility. The goal is to create a complementary and supportive relationship that maximizes contributions to corporate strategy and profitability.
Chief scientists are much more intimately involved in the day-to-day execution of scientific and technical projects. Each of these is usually limited to the laboratory, division or facility in which he or she resides. As described earlier, senior technologists are often very eager to explore new areas. But these explorations should be harnessed to contribute to the company's strategic direction. Earl and Feeny maintain that a company should not have a separate technology strategy (20). Supporting this perspective, one study has found that short-term, product-focused R&D is positively correlated with the financial performance of the company, while long-term R&D is negatively correlated with it. That is one reason that it is important for the CTO to mentor chief scientists and to direct their focus such that it contributes to the success of the company.
Chief scientists may also have informal networks of technologists that span business areas, but they do not have the official charter to cross-pollinate technologies. The CTO can organize an internal council of technologists to search out and apply the best technologies available across the company (9). Darren McKnight reports that he sponsored internal summits to bring leading technologists together to share ideas. He views it as his responsibility to create leverage across many different business groups to identify potential combinations of technology that could become new products or services. He is currently working on plans to create a network of technologists similar to that described by Brunner (7).
CMGI was one of the leading incubators of the Internet business explosion. Daniel Jaye, the CTO of Engage, a CMGI-incubated company, felt that the cross-pollination of technologies within CMGI could identify valuable opportunities and solve local problems. Therefore, acting as the ad hoc CTO of the parent company, he organized technology summits for all CMGI technology leaders. One of these summits led to the realization that two CMGI companies were' buying services from the same vendor. The leaders reasoned that the vendor would be a good fit under the CMGI umbrella and purchased the company, reducing outsourcing costs and adding a proven product to the CMGI family (6).
Research and Development Laboratories
Since the 1960s, R&D laboratories have been transformed from independent scientists working on challenging, but questionably marketable, technologies to organizations that are expected to make direct contributions to company profits. The CTO can play an important role in monitoring and directing these labs. Erickson et al recommend several principles that a CTO should use for directing R&D (24). First, R&D personnel should be kept in touch with the company's customers and markets. Few labs can seclude themselves from the market and conduct research for its own sake. Second, the CTO should foster open communications among R&D staff, manufacturing engineers and the marketing department. Third, the CTO should hold the R&D labs to schedule and budget commitments. If an R&D project is not delivering results, it may need to be terminated and the funds applied more productively elsewhere. Some longstanding projects constantly show great promise and absorb resources but produce nothing. These projects, though considered "pillars of the lab," must be held accountable and face termination if they do not produce results (11).
R&D laboratory budgets should be the topic of critical reviews by the executive staff. The CTO should lead initial funding reviews in which R&D projects present the expectations for the project, its applicability to market needs, the position relative to competitors, and a record of past successes. The CTO should also hold in-progress reviews to monitor problems and successes. A CTO can serve as an honest broker in these reviews because he or she comes from outside of the laboratory and is not personally involved in the projects (10,14).
Sales and Marketing
Earlier sections have extolled the importance of aligning technology with business strategy. CTOs like Rajeev Bharadwaj at Ejasent and Ron Moritz at Symantec are actively involved in marketing products and services. These CTOs recognize that some products are so technically sophisticated that explaining them to the trade media requires a technical representative. When the CTO is used to explain the subtle, but significant, differences between the company's products and those of competitors, he or she becomes a de facto member of the marketing staff (25).
Working with the sales and marketing departments also ensures that the CTO remains rooted in the customers' need for the product, rather than the technical sophistication of the product. Supporting this perspective, Michael Wolfe of Kana Communications says that, "Creating a product is mapping what a customer needs to what you can build" (6). Making this mapping requires regular and detailed interactions with customers and the marketplace.
Technology and Executive Leadership
Companies began adding chief technology officers to the executive ranks in the 1980s because technology was becoming an integral part of many strategic decisions and future plans. The CIO already provided strong expertise on the internal application of technology. But senior managers needed expert advice regarding the inclusion of technologies in existing products and the creation of new products and services with large technical components. A CTO that is actively involved in monitoring new technologies, separating marketing rhetoric from technical facts, and identifying profitable applications for those technologies can make a significant difference in the company's competitive future. The CTO can also add value to the company by participating in government, academic and industry groups in a manner that creates positive attention for the company.
Technology companies are involved in thousands of acquisitions every year. Selecting the best target for an acquisition often requires reliable advice on technical issues at the executive level. The CTO is also a valuable tool for addressing the increasingly well-informed media about the company's products, services and future plans. CTOs can speak to other technologists as peers and can play a role in convincing the media that the company's decisions are sound and will add value for the company's stakeholders.
It is important that the CTO not become the senior technologist of the company. Instead, he or she is the senior business executive with a focus on technology. In the CTO position, senior management is not looking for enthusiastic advice from a research scientist but rather for sound advice on business decisions involving technology.
(1.) Larson, C. F. Management for the New Millennium--The Challenge of Change. Research. Technology Management, Nov.-Dec.2001, pp. 10-12.
(2.) Parker, D. P. The Changing Role of the Chief Technology Officer. D. P. Parker and Associates web site. http://www.dpparker.com/ article_cto_role.html, 2002.
(3.) Lewis, W. W. and Lawrence, H. L. A new mission for corporate technology. Sloan Management Review, Vol. 31, No. 4, 1990, pp. 57-67.
(4.) O'Neill, P. H. and Bridenbaugh, P. R. Credibility Between CEO and CTO--A CEO's Perspective; Credibility between CEO andCTO--A CTO Perspective. Research * Technology Management, Nov.-Dec. 1992, pp. 25-34.
(5.) Thurlings, B. and Debackere, K. Trends in Managing Industrial Innovation--First Insights from a Field Survey. Research * Technology Management, July-August 1996, pp. 13-14.
(6.) Aspatore Editors. Inside the Minds: Chief Technology Officers. Bedford, MA: Aspatore Books, 2002.
(7.) McKnight, D. The role of the CTO at Titan Corporation. Personal correspondence with the author, Jan. 2002.
(8.) Gibson, R. Rethinking the Future. London: Nicholas Brealey Publishing, 1998.
(9.) Brunner, G. F. The Tao of Innovation. Research * Technology Management, Jan.-Feb. 2001, pp. 45-51.
(10.) Robb, W. L. Selling Technology to Your CEO. Research * Technology Management, Sept.-Oct. 1994, pp. 43-45.
(11.) Earl, M. and Feeny, D. Is Your CIO Adding Value? Sloan Management Review, Spring 1994, pp. 11-23.
(12.) Frick, K. A. and Torres, A. Learning from high-tech deals. The McKinsey Quarterly, No. 1, 2002.
(13.) Bharadwaj, R. The role of the CTO at Ejasent. Personal correspondence with the author, Jan. 2002.
(14.) Media Lab. Overview of the MIT Media Lab. http:// www.media.mit.edu/, 2001.
(15.) Waite, W. The role of the CTO at Aegis Technologies. Personalcorrespondence with the author, Jan. 2002.
(16.) Zeltzer, D. The role of the CTO at the Fraunhofer Institute. Personal correspondence with the author, Jan. 2002.
(17.) Betz, F. Strategic Technology Management. New York: McGraw Hill, 1993.
(18.) Roberts, E. Benchmarking Global Strategic Management of Technology. Research * Technology Management, March-April 2001, pp. 25-36.
(19.) Gwynne, P. The CTO as Line Manager. Research * Technology Management, March-April 1996, pp. 14-19.
(20.) Earl, M. and Feeny, D. Opinion: How to be a CEO for the Information Age. Sloan Management Review, Winter 2000, pp. 11-23.
(21.) Kwak, M. Technical Skills, People Skills, It's Not Either/Or. Sloan Management Review, Spring 2001, p. 16.
(22.) Phair, M. and Rubin, D. K. Bytes, bucks and big pictures. Engineering News Review, October 26, 1998, p. 29.
(23.) Spiers, D. CTOs: Technology's easy--It's the people part that's hard to master. Business 2.0, July 5, 2001, pp. 15-16.
(24.) Erickson, T. J., Magee, J. F., Roussel, P. A., and Saad, K. N. Managing Technology as a Business Strategy. Sloan Management Review, Spring 1990, p. 73.
(25.) Foster, R. N. Managing Technological Innovation for the Next 25 Years. Research * Technology Management, Jan.-Feb. 2000, pp. 29-31.
Skills and Competencies of an Effective CTO
Companies increasingly need strong technical people who want to master business strategy and apply their expertise toward the company's future growth.
* Technology.--The CTO should have been a leader in a technology that is an important part of the corporate business base. However, no CTO can master all of the technologies used by a diverse company--for that, the CTO must rely on an internal technology network.
* Strategy.--The CTO is a corporate executive dealing with strategic decisions about the future direction of the company. Consequently, he or she must make the transition from technical expert to business strategist and be prepared to spend significant time and energy on business issues that are tangential to the company's technology (e.g., mergers and acquisitions, government regulations, intellectual property rights).
* Business Growth.--Chief scientists are in a position to pursue interesting technologies, but CTOs must make decisions about which technologies are most likely to generate the highest rate of return. The CTO thinks about technology as a money-making asset, not as a field of exploration for its own sake.
* Interpersonal Skills.--All executives, including the CTO, must be able to communicate clearly and effectively with people from all backgrounds (e.g., research, manufacturing, sales, accounting). Executives spend a significant amount of time retelling their vision for the company to ensure that everyone is headed in the same direction.
* Executive Relationships.--The CTO position is relatively new in most organizations. Although the title appears to associate the person with the CEO, CFO, COO, and CIO, the individual filling the position must make efforts to be included in executive meetings and decision-making. Early CIOs were viewed as "techies" rather than business strategists and had to demonstrate their value in contributing to corporate strategy. CTOs will face the same challenge. Personal relationships with other executives are an important part of making that happen.
Comparing Roles and Responsibilities
The Chief Technical Officer
* Technology Strategy.--The CTO's primary responsibility is to contribute to the strategic direction of the company by identifying the role that specific technologies will play in its future growth. The CTO looks for contributions that technology can make to the company's competitive advantage.
* Internal Coordination.--Identification of the best technologies usually comes from a strong internal network of people who are in touch with the latest technologies and understand their potential.
* External Partnerships.--Like all business professionals, the CTO will be part of a strong network that includes business partners, academics, government officials, and technology thought leaders.
The Chief Information Officer
* Information Technology Application.--The CIO leads the application of information technology to internal processes and services. This person is responsible for improving the efficiency of internal systems like payroll, accounting, accounts receivable, labor recording, benefits, management, human resources records, government reporting, and a number of others.
* Reduce Internal Operating Costs.--The CIO's systems are focused on reducing the costs associated with the company operations listed above.
* Improve Services to Employees and Partners.--CIOs and IT departments have implemented major improvements in employee services in the last two decades. They have also built systems that allow better information and financial exchange with business partners.
The Chief Scientist
* Technology Creation.--Chief scientists lead teams that are focused on creating new technologies. Given strategic direction from management, these teams work to create products or services that make the company's strategy possible and that do so in a manner superior to their competitors.
* Recognized Leader.--Chief scientists should be recognized leaders in their technical field. They should be actively involved in professional associations and conferences with peers in industry and academia.
Because the CTO position is so new, the literature and resources on the subject are more sparse than for any other executive rank. This list provides some valuable information for CTO education and self-development.
* Research * Technology Management.--This Industrial Research Institute journal publishes articles from CTOs of large companies involved in pharmaceuticals, consumer products, electronics, and other industries, www.iriinc.org
* InfoWorld Magazine and Web Site.--Info Worm focuses on CTOs of companies that provide IT products and services, and those serving in government agencies. The articles often treat the CTO and CIO positions as nearly identical, which is easy to do when the company is creating IT products and services to sell to CIOs. www.infoworld.com
* CTO Forum.--This forum is organized by InfoWorld Magazine and focuses on issues in providing IT services to corporate customers, www.infoworld.com/ctoforum
* Local CTO Roundtables.--Several regional organizations have emerged that allow CTOs to network with one another. These CTO Roundtables are often patterned after the Technology Leadership Council of San Francisco that has served companies in that area so well for several years, www.chieftechnologyofficer.org; www.chillarege.com/prof/CTO/; www.technologyleadershipcouncil.org; www.columbustlc.org
* Books.--In the absence of good books specifically addressing the role of the CTO, texts on the strategic management of technology and innovation are valuable, e.g. Radical Innovation (Leifer et al, Harvard Business School Press, 2000).
MEASURING AND IMPROVING THE PERFORMANCE AND RETURN ON R&D
Fifty-four RESEARCH * TECHNOLOGY MANAGEMENT articles on this subject are now available in paperback. To order, see inside back cover.
3000 Raw Ideas = 1 Commercial Success!
Assessing the Value of Your Technology
Metrics to Evaluate R, D, & E
Measuring R&D Performance--State of the Art
Evaluating R&D Performance Using the New Sales Ratio
Measuring R&D Effectiveness
The Strategic Measure of R&D
How Good is Our Research?
Visualizing, Measuring, and Managing Knowledge
Measuring R&D Productivity
Why Some R&D Organizations Are More Productive Than Others
Winning Businesses in Product Development: The Critical Success Factors
Reengineering for Revenue Growth
Managing R&D as a Strategic Option
Applying 'Options Thinking' To R&D Valuation
Do's and Don'ts of R&D Benchmarking
Benchmarking the Strategic Management of Technology
Benchmarking the Delivery of Technical Support
Measurements and Incentives for Central Research
Analyzing R&D Portfolios at Eastman Kodak
Improving the Innovation Process at Eastman Chemical
New Role for R&D: The Challenge of Growth
'Reinventing' Industrial Basic Research
Gate System Focuses Industrial Basic Research
How ABB Decides on the Right Technology Investments
GE's R&D Strategy: Be Vital
Learning is the Critical Success Factor in Developing Truly New Products
Critical Success Factors in R&D Projects
When Choosing R&D Projects, Go With Long Shots
Evaluating Competing R&D Investments
Why Costs Increase When Projects Accelerate
Portfolio Management in New Product Development: Lessons from the Leaders
Best Practices for Managing R&D Portfolios
Improving R&D Decisions and Executions
Using Decision Quality Principles to Balance Your R&D Portfolio
Making Excellent R&D Decisions
Essentials of R&D Strategic Excellence
Managing R&D for Competitive Advantage
Critical Success Factors for R&D Leaders
The Customer for R&D is Always Wrong!
Increasing R&D Effectiveness: Researchers as Business People
How Top Management Sees R&D
Satisfy Customers While Speeding R&D and Staying Profitable
Meet Your Competition: Data from the IRI/CIMS R&D Surveys for FY '92, '93 and '94
Benchmarking Your R&D: Results from the IRI/CIMS Annual R&D Surveys for FY '95, '96 and '97
Roger Smith is a vice president and group CTO for Titan Corporation, headquartered in San Diego, California. He is responsible for the technological focus and evolution within one business unit and leads the corporate-wide Titan Chief Technologists Network. He has published over 50 technical papers in the fields of simulation, operations research and computer science. He holds an M.S. degree from Texas Tech University and an M.S. and M.B.A. from the University of Maryland email@example.com.
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|Title Annotation:||examines the role of CTO and their relationship to operations in several large high tech companies|
|Author:||Smith, Roger D.|
|Date:||Jul 1, 2003|
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