It’s time to hire a CTO

CTO

Most business leaders agree that their “…technology is mission critical to the success of the organization.” Who then should be planning this aspect of the business? Intuitively, small business owners depend exclusively on their IT Department for their technology planning. It may seem counter-intuitive, but business technology fails because leadership was not involved in planning the technology. As a result, statistically, 50% of technology projects fail. To grow small businesses to large businesses, the technology must grow in alignment with the business mission. Without business leaders, technology fails because the business technology does not fully support the mission of the company.

In an Industry survey of IT technicians in mid-size (and larger) businesses:

  • 50% had no idea what service or product their company provided.
  • 100% are unaware of the objectives behind the company’s strategic business initiatives.
  • 95% are unaware of the mission and vision of the organization; and
  • 90% judge employees and leaders by their technical skills and not by their business position, or their business experience.

This is important because, for the small business, the IT technician is planning a mission critical aspect of the organization. Most IT experts are not qualified to make business decisions at the strategic level. To compound the problem, most business leaders don’t feel qualified to influence technology either. As a result, frequently technology decisions are made without an understanding of the business objective they are supporting. In retrospect, it makes sense that technology projects fail so frequently. The projects fail is that business objectives is not driving the project. Successful technical projects are more likely an accident than successful planning. By contrast, technology project failure is almost inevitable.

Enterprise business are still going through the trials and errors to solve this failure problem in technology. Presently, large and enterprise companies use a hybrid business executive (Like a CTO) to make sure that business objectives are being met as the technology is planned, deployed, and managed. The Chief Technology Officer (CTO) has both an understanding of business objectives and can discuss the technical requirements for these projects with the IT Department. From the board perspective, the CTO answers to the board and is held accountable for the success or failure of the IT Department. In the IT Department, the CTO translates the boards business objectives into the technical requirements. With the IT Operations Manager, the CTO develops the metrics to quantify IT Departmental success. The difference between small and enterprise businesses is that IT Departments are held accountable for business success. What this would mean for your organization is more control of costs, productivity, and, ultimately, your organizations business mission, vision, and destination.

If you are a mid-market CEO, it seems intuitive that managing a small organization is very different than management of a large organization. IT Department leaders are still learning this concept and are making lots of mistakes. For example, a common mistake I see are IT Leaders implementing (and maintaining) expensive old-tech. Microsoft setup Cloud Computing because it is less expensive managing the technical platform, than trying to support the common mistakes made by millions of technicians trying to build private, on-premises, systems for the first time. With the dramatic changes in technology, a single key technical expert just can’t keep up. If the technician is falling behind, it means the company technology is also falling behind. Since technology is truly mission critical to the success of the organization, the company will also inevitably fall behind technically savvy competitors.

What enterprise businesses are doing is outsourcing their IT infrastructure to other companies like Amazon and Microsoft. As an example: 15 years ago, companies like American Express many other enterprise organizations, found savings in the initial Microsoft Cloud offerings. These offering promised email access (and MS guaranteed security) at 99.9% availability, at a cost of $5.00/employee/month. At the time, small business using their own emails servers spent between $20 - $75/employee/month. Also, the availability average back then was 95% (meaning email was down 3 weeks per year) and had no security breach guarantees. Small business had the same opportunity as the enterprise, but the email server technicians always recommended avoiding the cloud.

Why? We believe that these technicians, believed their technical mission was to provide email (and other technologies) to the organization. Going into the cloud, meant losing that technical mission responsibility. They believed they could manage the company’s email technology better than Microsoft.

A few CEOs went against the recommendation of their technicians. CEOs that migrated their technology, embracing the cloud, where able to reduce capital and operational costs for their organization. At the same time, they improved security, improved reliability, and improved email systems quality. All this at a 75% reduction in technology cost. The CEO that took the technician’s advice received no competitive advantage over competitors moving into the cloud. We’ve found that CEO’s that make the best decisions about technology, have also hired the best CTO (full time or part time).

Your next step and our advice:

If you are a CEO and want your business to grow, it is mission critical to hire a qualified CTO.

If you are a CEO and want your business to grow, it is mission critical to hire a qualified CTO.” James Murray

Along with a CTO, every Executive and CEO we’ve met has a trusted inner circle of advisors. (We are on many executives’ advisory boards.) We suggest having at least one technical advisor for each mission critical technology in the CEOs inner circle. At a bare minimum, there should be someone who can find those experts for the CEO. Then a CEO can let their inner circle identify new technology opportunities.


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