Business Acumen and the CIO/CTO
In an earlier article we discussed how technical the CEO needed to be in a technology company. No discussion on this topic would be complete without addressing how business savvy the CIO or CTO needs to be in nearly any company.
In keeping with our “bottom line up front” tradition, the executive in charge of technology decisions needs to be a leader first, a business executive second and a technology decision maker last. That is not to say that this executive should not also have some understanding of technology, rather it is our position that their primary role is to help make the right business decisions as they relate to technology.
Unfortunately, most technologists do not learn about business, finance or marketing within their undergraduate or graduate courses and most non-technologists do not have an opportunity to learn about the inner workings of technology within their fields of studies. As a result, the teams have very little in common when it comes to training and they often find it hard to communicate and find common ground. This is very different from the relationships that exist between other disciplines within a company like marketing and finance wherein most of the employees within those organizations have had some exposure to the fundamentals of the other organizations. We refer to this gap between the technology organization and other organizations as the “experiential chasm” and it is the role of the chief technology executive within a company to partner with the CEO to build a bridge across this chasm.
Just as we have argued that the CEO needs to make an attempt to better understand technology, technology process and the “physics” of product development (like technical project management, Brooks’ law, etc) so must the CTO/CIO better understand the fundamentals of the business in which they operate. Just as importantly, the CTO/CIO should also understand the fundamentals of each organization’s responsibilities.
For example, while the chief technology expert does not need to be the expert on capital markets, he or she should be able to debate the relative merits and issues associated with the assumption of debt vs. the issuing of equity. He or she should also be able to completely understand each of the statements used in running a company (e.g. Income Statement, SOCF, and balance sheet). From a marketing perspective it is important that the person understand such basics as the 5Cs and the 6Ms to name just a few. From a strategy perspective, it is useful to understand such basics as Porter’s forces. These topics just scratch the surface and in no way are meant to be an all encompassing list.
Not having a background in such topics means that you cannot effectively function as part of the senior executive team or executive committee. And not contributing as part of the executive team means that you are not performing your responsibilities in helping to maximize shareholder wealth. And, of course, if you cannot help maximize shareholder wealth you simply should not be in your job.
We are not arguing that you need to go get an MBA to be effective or to provide value in the boardroom, though getting an MBA or going to an executive MBA program is certainly a great way to jumpstart the process. We are arguing that it is absolutely your job to get better every day in the things that you do not know and are essential to an appropriate level of performance. Here are some ideas:
Develop a professional reading list
Seek out ideas of great books on each of the functional areas within your company and read and learn. We will post our recommended reading list soon.
Take community college business classes
You do not have to take masters level classes to learn basic business concepts. Your local community college probably has some first and second year undergraduate classes that will fit your needs and your schedule.
Take online classes in each of the disciplines
This is the information age after all, and we can all leverage the internet to learn. We recommend taking structured course work as it is one of the easiest ways to learn.
Discuss business concepts and seek help from peers
Be honest with yourself and with your peers. You might think it shows a weakness, but it actually builds trust and strengthens relationships. Your peers will walk away thinking “Here is a person who really wants to know how this works”. Think about it – wouldn’t you have great respect for a peer who wanted to know more about technology?
Start and Executive MBA Program
This is probably the best and easiest way to get a good foundation in all of the areas, but it is also the most costly. There is a chance that your company will pay for it and there are several great schools with very flexible programs including weekend and evening coursework or accelerated programs that limit your time away from work.