When it comes to technology, the risks of businesses falling behind the curve are clear. Indeed, in the aftermath of the 2008 financial crisis, numerous legacy businesses were caught on the hop by nimble, digital-first disruptors – the transformation of the taxi industry through ride-sharing apps is a prime example. Meanwhile, startups such as Airbnb and Venmo began using emerging technologies to dissolve the boundaries between industries and create new business models.
The rate of digital disruption has only increased in the years since. The outbreak of Covid-19 is estimated to have accelerated the widespread adoption of digital technologies by several years, dramatically increasing the number of internal and external threats that businesses face.
Chief technology officers (CTOs) are on the frontline of addressing these challenges. While there are variations in what the remit of a CTO includes, they are usually responsible for managing and driving value from technology within an organisation. In other words, they must monitor any emerging, disruptive technologies and turn these threats into sustainable opportunities for their business.
James Donkin is the CTO at Ocado Technology. He believes that the dizzying speed of technological change in the past decade has greatly expanded the strategic function of his job. “In the past few years, we’ve seen the role of the CTO become less siloed as technology has become more ubiquitous. A modern-day CTO works across the business, supporting and advising multiple functions.
Today, CTOs are strategists, working with the leadership team to build business plans and roadmaps that align with the wider company vision, he says. “To do this, it’s crucial for CTOs to have a deep knowledge of the trends and emerging technologies which could give their organisation an advantage.”
And what seems to separate the best businesses from the rest is the inclusion of the CTO in company-wide decision-making. A recent McKinsey study found that nearly three-quarters of top-performing companies highly involve their most senior tech leaders in setting the overarching company strategy.
The increasing strategic importance of the CTO is unsurprising given the significant threats that technology poses to businesses. Take cybersecurity: the widespread adoption of mobile and cloud platforms, partly necessitated by the pandemic – plus the increasing use of emerging technologies as a competitive advantage – has dramatically increased a business’s attack surface for hackers.
CTOs are at the forefront of setting a company’s strategy for combatting cybercriminals, according to Yvonne Bernard, CTO at Hornetsecurity. However, she notes that widespread hybrid working has complicated a CTO’s ability to counter hackers.
“The pandemic has forced lots of companies to accelerate their digital transformation and flexible working policies, which, in turn, has led to changes in leadership styles and communication with team members,” she says.
As a result of changes to communication channels, new paths opened up for hackers to mount cyber attacks. “For instance, people are unlikely to ‘go over’ to their colleague if there’s a potential phishing email, and they are less likely to pick up their phone,” says Bernard.
Of course, cybersecurity is just one area of a CTO’s work that has been complicated by recent changes to working behaviour. Alongside these internal challenges, CTOs are also grappling with changing customer habits.
During the peak of Covid-19, in 2020, e-commerce was pretty much the only option available to customers for their everyday necessities. But now, with the worst of the pandemic hopefully behind us, this digital growth has started to plateau as customers spend less time within a company’s online channels.
Retaining these customers will be high on the priority list for most business leaders, particularly given the ongoing economic disruption. To achieve this, businesses will have to invest in improving the areas that matter most to digital consumers, namely user experience, security and privacy.
From back office to key decision maker
CTOs will likely be responsible for overseeing these digital innovations. Austin Sheppard, CTO and vice-president for trips engineering at Booking.com, believes that tasking CTOs with such an important job reflects their changing function. The job is no longer a purely technology-focused role, he feels. Instead, it’s a strategic position with company-wide significance.
“A decade ago, the CTO was generally more of a back office and support role than it is today,” he says. “It’s now much more likely to be a position that plays a key role in strategy, operations and business decisions at most companies.
“Indeed, when you look across various industries, increasingly the CTO is evolving into a ‘front seat’ executive, alongside the chief financial officer, the chief marketing officer and the chief operating officer.”
The CTOs of yesteryear tended to come from a traditional engineering background. Although that equipped them with in-depth technical knowledge, it perhaps left some lacking the strategic skills that other C-suite leaders had gained over the course of their more varied careers.
But given the increasing use of technology as a competitive differentiator between businesses, the required skill set of a CTO today is changing. While they still need to have an in-depth knowledge of technology and emerging trends, they also need to have the strategic vision to set a course for a company that mixes today’s technologies with the digital trends of tomorrow.
Jason Foster, CEO and founder of data and analytics consultancy Cynozure, agrees. “As businesses become more and more technically driven, it’s likely that we’ll see an increase in the number of CEOs from a CTO background. CTOs are key strategic allies for CEOs and deserve a seat at the top table.”