What is a CTO? The exec who sets tech strategy

The chief technology officer has emerged as a key player in the C-suite, as digital transformations become high strategic priorities for so many organizations.

What is a chief technology officer? The exec who sets tech strategy
Laurence Dutton / Getty Images

The chief technology officer (CTO) is the senior executive who focuses on the technological requirements, opportunities, and challenges within an organization. The CTO role has emerged as a key player in the enterprise C-suite, especially with digital transformation being such a high strategic priority for so many organizations.

These executives, in many cases working in collaboration with CIOs, are oftentimes at the forefront of innovative technology products and services. And they can help steer their organizations toward greater efficiencies and better performance by adopting these tools.

As such, CTOs are among the most important hires organizations are making today, and it can be challenging finding the right person who possesses all the right skills.

“When hiring a CTO, you’re looking for a technologist, a technology architect, an innovator, and someone who can enhance the company’s products for customers while partnering with the CIO,” says Ash Athawale, senior managing director for the executive search practice group at Robert Half.

CTO role and key responsibilities

As a senior executive focused on an organization’s technical requirements and challenges, the CTO’s role can be similar to that of the CIO. But while the CIO is tasked with overseeing the IT department, staff, and infrastructure to support everyday operations and working with business leaders to align IT with business goals, the CTO is responsible for the overall technology strategy.

Some CTOs are also responsible for managing research and development initiatives and overseeing intellectual property at their organizations.

“The role of the CTO continues to evolve,” says Craig Stephenson, managing director for the North America Technology Officers Practice at organizational consulting firm Korn Ferry.

“Unfortunately, [the role] means many things to different industries and organizations,” Stephenson says. “Years ago, the CTO most often led the infrastructure function. This may still be true today, but the title of CTO may also mean a highly strategic role which often incorporates engineering, technology, and product development. The CTO title is more challenging to define today than ever before.”

CTO job description

CTOs oversee the effectiveness of technology resources within an organization, including everything from phone systems to enterprise software platforms. “Their duties include communicating with other executives, performing research on new technologies that could enhance their business, and monitoring the use and implementation of new and existing technologies across departments,” according to online hiring platform Indeed.

Because the role is dynamic and responsibilities can vary depending on the type and size of the organization, industry, and other factors, there isn’t really such thing as typical day for a CTO.

Indeed lists a number of tasks a CTO might be expected to carry out. These include presenting reports on the company’s technology status, goals, or progress; creating and implementing technology strategies; aligning the company’s technology resources with its short- and long-term goals; serving on the executive committee to align technology goals to other departmental and organizational objectives; identifying which technologies can be used to improve the company’s products and services; creating and overseeing high-level key performance indicators; helping with recruiting, onboarding, and training technology professionals; and managing a budget.

“It is difficult to be precise [about job description] based on the many definitions of the chief technology officer title,” Stephenson says. “However, if the CTO is overseeing infrastructure, the executive is likely overseeing a balanced portfolio of strategic and tactical objectives.”

These might include infrastructure modernization, resiliency, cloud services, extensive interactions with security teams, and continued partnership with the engineering/software teams focused on quality and release management, Stephenson says. That means CTOs are likely spending a lot of time working in collaboration with others.

CTO vs. CIO

The responsibilities and day-to-day functions of the CTO and CIO might overlap depending on the organization, how it’s structured, its business model, and other factors. In most cases, however, it’s the CTO who is charged with staying on top of emerging technologies that might be of value to the organization.

The CTO also creates policies and procedures that leverage technology to enhance products and services delivered to external customers.

When an organization has both a CIO and CTO, the CTO usually has more technical know-how and expertise, according to the US Bureau of Labor Statistics (BLS). The CTO typically reports directly to the CIO and is responsible for designing and recommending the appropriate technology solutions to support the CIO’s policies and directives, the bureau says. CTOs also work with various departments to implement the organization’s technology plans.

When a company doesn’t have a CIO, the CTO determines the overall technology strategy and presents it to top executives, according to the BLS.

CTO skills

As a member of the C-suite, the CTO needs to possess natural leadership skills, including the ability to delegate tasks and inspire staff in their work.

“As companies push to effectively drive technology transformation, we believe there is a very strong push to find technology leaders [who] bring experience and capabilities from hands-on leadership and stewardship of such activities,” Stephenson says.

The CTO role naturally requires a strong knowledge of various technologies, and “real technology acumen, especially in the architecture, software, and technology strategy areas to address legacy technology challenges,” Stephenson says.

Knowing how technology works is crucial, but it’s also important to be able to explain the business value of a particular technology to C-level colleagues who might not be technically inclined. It’s also vital to be able to see how technology fits with strategic business goals.

“Technology vision coupled with strategic thinking beyond technology” is important, says Ozgur Aksakal, president of the Global CTO Forum, an independent, global organization for technology professionals.

“There are a lot of technology trends that do not live up to their promises,” Aksakal says. “Investing in wrong strategic choices can even kill a company. “A CTO should not be blinded by engineering superiority, but see how that engineering will fit into the company goals and the market.”

CTOs also need to have a number of soft skills as well, including strong communications and collaboration. These executives work with many people across various functions, and the ability to collaborate well is essential.

They also need the ability to grasp what others in the organization are looking to accomplish and the challenges they face, and to guide them in how to meet goals and address hurdles. “The CTO should convince diverse stakeholders to commit and invest in unknowns,” Aksakal says. “This requires strong conviction and empathy.”

Other soft skills CTOs should have include good problem-solving, time management, multi-tasking, and creative thinking.

CTO background and requirements

CTOs need at least a bachelor’s degree in computer science, information systems, or a related field, according to Indeed. In some cases, a degree in business administration or management is valuable. Many CTOs have at least a master’s degree, and some even have PhDs in IT or business administration fields.

Most CTOs undergo training throughout their careers in IT departments, and they might also earn certifications in development, programming, database administration, or other related fields. 

“CTOs typically need at least 10 years of experience in IT and management,” Indeed says. “They usually start in entry-level roles in technical support, development and programming, database and network administration, or engineering. After several years, they typically enter a management or leadership role, where they get the necessary leadership skills.”

Since CTOs need to possess knowledge of every department role, experience in several different technology positions is valuable.

A CTO without an engineering background is quite rare, Aksakal says. “A CTO who doesn’t have technology background is a no-go,” he says. “A CTO should understand technology, if possible a very wide spectrum of the technology.”

Organizations looking to hire a CTO should seek someone who is ambitious and bold, “someone who can shake the status quo, stay resilient, and turn technology into something useful for the organization,” Aksakal says. These traits can be demonstrated by earlier career choices and accomplishments.

Reporting structure

Depending on the organizational structure, CTOs can report to various other C-level executives. These include the CIO, CEO, COO, or CFO.

“If it is the top technology leadership role within an organization, we believe the strategic approach [is to] ensure this role reports to the chief executive officer,” Stephenson says. “This conveys a very important message to the market, technology function, and potential candidate community to attract the best and brightest talent to an organization.”

CTO salary

CTOs on average earn a salary of $163,309 per year, according to PayScale, a firm that provides a compensation platform to calculate compensation rates. Total compensation for these positions ranges from $89,000 to $294,000 per year.

CTO jobs

The job outlook for CTOs should remain strong, particularly since so many organizations are undergoing digital transformations and are looking for the latest, most innovative technologies and someone to lead the charge in deploying these tools.

The CTO job market is “extremely hot,” Aksakal says. “We observe it on the Global CTO Forum every day. [Being] a great CTO requires having a magnitude of skills in a single person. It is like a Swiss army knife. There isn’t a high number of people with the best combination of technology, people, and business skills.”

This versatility provides opportunities for CTOs to advance to the highest levels of organizations. “As understanding of technology becomes more and more crucial for every function of a company, the CTO can have a major impact on [the] success of every function of a company — marketing, sales, product, HR, and even the CEO function,” Aksakal says.

Related:

Copyright © 2021 IDG Communications, Inc.

The CIO Fall digital issue is here! Learn how CIO100 award-winning organizations are reimagining products and services for a new era of customer and employee engagement.