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Why CTOs Fail and What CEOs and CTOs Can Do About It

May 2, 2018  |  Posted By: Marty Abbott

The rate of involuntary turnover for the senior executive running technology and engineering in a company is unfortunately high, with most senior technology executives lasting less than four years in a job.  Our experience over the last 12 years, and with nearly 500 companies, indicates that nearly 50% of senior technology executives are at-risk with their peers around the CEO’s management team table.

The reasons why CEOs and their teams are concerned about their senior technology executive vary, but the trigger causes of concern cluster around 5 primary themes:

  1. Lack of Business Acumen – Doing the Wrong Things
  2. Failure to Lead and Inspire
  3. Failure to Manage and Execute
  4. Trapped in Today – Failure to Plan for Tomorrow
  5. Lack of Technical Knowledge - Doing Things the Wrong Way

Before digging into each of these, I believe it is informative to first investigate the sources (backgrounds) of most senior technology executives.

CTO and CIO Backgrounds

Within our dataset, there are 2 primary backgrounds from which most senior technology executives come:

    1.    Raised through the Technical Ranks

These executives have spent a majority of their working career in some element of product engineering or IT.  They are very often promoted based on technical acumen, and a perception of being able to “get things done”.  Often, they are technically gifted folks with technical or engineering undergraduate degrees, and sometimes they have a great deal of project management experience.

    2.    Co-Opted from the Business

These executives have spent a majority of their working career in a function other than technology.  They may have been raised through marketing, sales or finance and have demonstrated an affinity for technology and some high-level understanding of its application.  They rarely have a deep technical understanding and have done very little hands-on work within technology or engineering.

We see both backgrounds struggling with the chief technology role. Sometimes they fail for similar reasons, but often for very different reasons within our five primary causes.
 
Lack of Business Acumen – Doing the Wrong Things

This is by far the most common reason for failure for chief technologists “Raised through the technical ranks”.  On the flip side, it is rarely in our experience the reason why executives “Co-Opted from the Business” find themselves in trouble. 

The technologist’s peers often complain that they do not trust the executive in question and often cite a failure to present opportunities, fixes, and projects in “business terms”.  Put frankly, a lack of understanding of business in general, and an inability (or lack of desire to) justify actions in meaningful business terms causes a lack of trust with the CIO/CTO’s peers. 

Further, CTOs sometimes overly focus on what is “cool” rather than the things that create significant business and stakeholder value.  Business peers complain that money and headcount is being spent without a justifiable return.  An oft heard quote is “We don’t get why there are so many people working on things that don’t drive revenue.”

The fix for this is easy.  Executives raised through the technology ranks should seek education and training in the fundamentals and language of business.  A great way to do this is for the tech exec to get an MBA or attend an abbreviated MBA-like program such as those offered by Harvard Business School or Stanford.  Many business courses focused on cost justification and the business financial statements are also available from online programs.

Failure to Lead and Inspire

This failure is most common for executives “raised through the technical ranks”.  Comments from peers and CEOs of the CTO indicate that he struggles with creating a strategy that clearly supports the needs of the business.  Further, individual contributors within the organization appear to be disconnected from the mission of the business and disengaged at work.  Often, employees within such an organization will complain that the CIO/CTO requires that all major decisions go through her.  Such employees and organizations often test low on work engagement and overall morale.

The cause of this failure is again often the result of promoting a person solely upon her technical capabilities.  While there are many great technology leaders, leadership and technical acumen have very little in common.  Some folks can be trained to appreciate the value and need for a compelling vision and to be inspirational, but alas some cannot.

The fix is to attempt training, but where the executive does not show the willingness or capability, a replacement may be necessary.  Sometimes we find that mentoring from a former or current successful CIO/CTO helps.  Coaching from a professional coach or leadership professional may also be helpful. 

Failure to Manage and Execute

This failure is common for both those raised through the technical ranks, and those co-opted from the business.  At the very heart of this failure is a perceived lack of execution on the part of the executive – specifically in getting things done.  Often the cause is a lack of communication.  Sometimes the cause is poor project management capabilities within the organization or a lack of management acumen within the organization. 

For executives co-opted from the business, we find that they sometimes struggle in communicating effectively with the technical members of their team and as such don’t have a clear understanding of status.  They may also struggle with the right questions to ask to either probe for current status or to help keep their teams on track.

Where the problem is the lack of technical understanding by non-technical executives running tech functions, the fix is to augment them with strong technical people who also speak the language of business (similar to the lack of business acumen failure).  For the other failures, the fix is to build appropriate project management and oversight into product delivery.  This may be adding skills to the team, or it may mean needing to infuse an element of valuing execution into the technology organization.

Trapped in Today – Failure to Plan for Tomorrow

This type of failure is common to executives of both backgrounds.  In fact, the problem is common to leaders in all positions requiring a mix of both operational focus and forward-looking strategy development.  The needs of running the day to day business often biases the executive to what is necessary to ensure that you make a day, month or quarter at the expense of what needs to happen for the future.  As such, fast moving secular trends (past examples of which are IaaS, Agile, NoSQL, mobile adoption, etc) get ignored today and become crises tomorrow.

There are many potential fixes for this, including ensuring that executives budget their time to create “space” for future planning.  Organizationally, we may add someone in larger companies to focus on either operational needs or the needs of tomorrow.  Additionally, we can bring in outside help and perspectives either in the form of new hires or consultants who have experience with emerging trends and technologies.

Lack of Technical Knowledge

This failure is owned almost entirely by folks with a non-technology background who find themselves running technical organizations.  It manifests itself in multiple ways including not understanding what technologists are saying, not understanding the right questions to ask, and not fully understanding the ramification of various technical decisions.  While a horrible position to be in, it is no more or less disastrous than lacking business acumen.  In either scenario, we have an imperfect matching of an engine and the transmission necessary to gain benefit from that engine.

Unfortunately, this one is the hardest of all problems to fix.  Whereas it is comparatively easy to learn to speak the language of business, the breadth and depth of understanding necessary to properly run a technology organization is not easily acquired.  One need not be the best engineer to be successful, but one should certainly understand “how and why things work” to be able to properly evaluate risk and ask the right questions.

The fix is the mirror image of the fix for business acumen.  No technology executive should be without deep technical understanding AND a clear understanding of business fundamentals.

Key Learnings

Perhaps the most important point to learn from our experience in this area is to ensure that, regardless of your CTO/CIO’s background, you ensure he or she has both the technical and business skills necessary to do the job.  Identify weaknesses through interviews and daily interactions and help the executive focus on shoring up these weaknesses through skill augmentation within their organization or through education, mentoring and coaching.

AKF Partners provides mentoring and coaching for both CTOs and CEOs to help ensure a successful partnership between these two key creators of company value.  If your CEO or CTO has departed, we also provide interim leadership services.

 

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