As a CEO of a small or medium-sized business, you’re likely no stranger to working with technology leaders. But in today’s rapidly evolving tech landscape, understanding the full potential of CTO responsibilities – whether in-house or outsourced – can be the difference between not lagging behind the competition and truly driving innovation. Let’s dive into what you can expect from modern CTO responsibilities and how they can propel your business forward.
The Evolving CTO Responsibilities
First things first: the CTO role isn’t static.
I was a day-1 CTO at a kids media startup. Ran all of tech for a public listed telecoms company. Been through rapid growth, and rapid decline. Dealt with angel investors, Venture Capital, Private Equity ownership and public shareholders. And while my title was CTO that whole time, my day to day focus was incredibly different.
In “The CTO you want or the CTO you need?” we discussed how the role goes from hands-on coder to strategic conductor. It is crucial to keep this evolution in mind when considering CTO responsibilities that fit your current goals.
In this article I’m highlighting the broad array of what you should expect from a CTO. Though not every CTO will cover all areas equally of course.
That’s where CTO-as-a-service can come in. It doesn’t have to be a CTO replacement, it could help your current CTO fill a gap just as much.
What to Expect from a Modern CTO?
1. Strategic Alignment of Technology and Business Goals
Gone are the days when a CTO was just the “tech person.”
Whether you’re working with an in-house CTO or utilizing outsourced CTO services, you should expect a strategic partner who aligns technology initiatives with your broader business objectives and can articulate that.
This is a topic we discussed in our CTO network. We all agreed that the most successful CTOs can speak the language of technology and business.
Take me, for example. I found my MBA in corporate finance extremely helpful. Compared to other CTOs, I can often help CEOs refine their business strategies from a technology viewpoint or work closely with CFOs to review the R&D tax claim or financial statements. Those executives who worked with me for the first time were often surprised by my knowledge of broader business operations.
Afterward, they enjoyed working with me because I could contribute to the tasks they previously had to deal with in isolation.
What to look for in a CTO:
- Ability to speak both technology and business languages
- Capability to input business strategies from a technological viewpoint
- Broad understanding outside the technology to work through, e.g., R&D tax claims, impact of regulation changes, …
2. Navigating Emerging Technologies and Innovation
Technology changes all the time. Sometimes you should be ahead of the curve, sometimes you want to let the dust settle. Your CTO, whether in-house or outsourced, should be your guide through the ever-changing tech landscape.
A good CTO understands current technologies and can foresee how emerging trends might impact your business in the future.
Ideas of course are cheap. What you really want is an environment where ideas are surfaced, quickly triaged and the best are explored further. This is a cultural challenge as much as a technical one, and impacts the entire organization. So expect your CTO to champion this initiative in your exec team.
The flip side of innovation is your current stable system. The mark of a good CTO is their ability to channel that innovation into production-grade improvements that bring real benefits.
Expect your CTO to:
- Understand current technologies and foresee future trends’ impact on your business
- Create an environment with a constant input of ideas and quick triage
- Foster a culture of innovation within the organization
- Balance new technology adoption with operational stability
- Generate commercial value from innovation
3. Risk Management and Cybersecurity
Risk management or cybersecurity isn’t just an IT issue—it’s a business imperative. The most recent example is CrowdStrike.
Fortune 500 companies, excluding Microsoft, are expected to suffer $5.4 billion in losses due to CrowdStrike’s global tech outage.
It is your CTO’s responsibility to include robust risk management strategies and cybersecurity protocols in their purview.
A modern CTO needs to be proactive in identifying potential risks, whether they are related to cybersecurity, data privacy, or system failures. Steps a CTO should take for effective risk management:
- Collaborate with all executives to strategize on protecting the company, with a focus on tech-related risks
- Review existing risk management strategies upon joining the company
- Identify and prioritize immediate or high-cost risks for immediate action
- Discuss risks with executives, ensuring understanding of downsides and response strategies
- Conduct periodic risk reviews
- Implement and regularly update incident response plans
- Conduct regular security audits and penetration testing
- Ensure compliance with relevant industry standards and regulations (e.g., ISO 27001, NIST)
Moreover, as data protection and privacy regulations continue to evolve (think GDPR, CCPA), your CTO should be at the forefront of ensuring your company’s compliance. This isn’t just about avoiding fines; it’s about maintaining your customers’ trust and your company’s reputation.
4. Building and Leading High-Performance Tech Teams
Like everyone else on your executive team, the CTO is a people leader and a domain expert. The people aspect of the role is crucial for setting direction and culture and identifying talent and gaps.
While the process of hiring technical talent isn’t very different from any other talent, you need to bring in. A good CTO typically brings their network along.
Look for:
- A black book of talented developers they’ve worked with or can recommend, as well as recruitment partners
- A playbook for attracting top tech talent in a competitive market
- Create a culture of continuous learning and improvement within the tech team, which is proven to help with retention
- Understand they’re building a full team and therefore bring balance in technical skills, soft skills, business & product thinking.
- Implement effective performance management and career development programs
5. Technology Budgeting and Resource Allocation
We believe that in a modern technology organization the CTO and CFO should be best friends. Unfortunately finance is an area many CTO struggle with. Yet they are responsible for a large headcount, as well as significant opex and often capex. And it’s an area you can’t not invest in.
Not that every CTO should be a qualified accountant, but they should be able to articulate their budget in terms of cash flow and the impact on P&L and balance sheet items. And ultimately tie that back to margin and valuation dynamics. And provide you with a current state and a reasonable forecast.
Expect your CTO to:
- Develop a comprehensive technology budget that aligns with the overall business strategy
- Create a clear process for evaluating and prioritizing tech investments as part of their innovation strategy
- Provide data-driven justifications for technology spending
- Contribute significantly to financial statements and investor briefs, particularly on tech-related investment decisions
A reference frame typically used to bridge finance and technology is the idea of buying options. Your investment in technology, the choice of where to focus your development time and money, is akin to buying an options contract. You have a certain payment now for a potential future payout. You can then try to estimate the payout and when and what margin of safety you would like. While it’s not an exact ROI, in our experience, it changes the debate to focus on the right underlying drivers of value.
6. Data Strategy and Governance
Your CTO plays a crucial role in developing and implementing your company’s data strategy, as you are likely already aware of how important a solid data strategy is. This can be the difference between making informed decisions and flying blind in the market.
Expect your CTO to:
- Develop a comprehensive data strategy aligned with business objectives
- Implement robust data governance policies and procedures
- Ensure compliance with data privacy regulations (like GDPR and CCPA)
- Leverage data for business intelligence and decision-making
- Implement data security measures to protect sensitive information
- Promote a data-driven culture across the organization
- Translate complex data concepts into clear business insights for non-technical stakeholders
Remember, your CTO should be able to explain how data strategy translates into tangible business outcomes. They should be your partner in using data to understand your business and predict trends and drive growth.
Maximizing Success with CTO Services
If you’re scaling rapidly and need expert guidance to navigate complex technological decisions without the long-term commitment of a full-time executive, a part-time CTO can provide the strategic insight and leadership you need to drive growth efficiently.
The right CTO partner can be a game-changer for your business. Here’s why:
- Strategic Alignment: A skilled CTO aligns technology initiatives with your business goals, driving innovation and growth.
- Proactive Problem-Solving: They identify opportunities to streamline operations and enhance customer experiences through technology.
- Future-Proofing: With insights into emerging trends, your CTO helps your company stay ahead of the competition.
- Clear Communication: Complex tech concepts are translated into actionable strategies that all stakeholders can understand.
A premium quality, bespoke CTO service can drive your company’s technological innovation, align your technology strategy with your business goal, optimize your IT infrastructure, and protect your digital assets.
By partnering with the right CTO, you’re not just keeping up with technology—you’re leveraging it to lead your industry.
Ready to transform your business with expert CTO services? Let’s discuss how we can tailor our expertise to your needs and goals.
