Building tech leaders who think like CEOs (and deliver like operators)

To make your CTO succeed, get them involved in the strategy early on - it is the actual combination that transforms technology leadership into one that is stuck in the mud. Imagine following situation: Your new CTO is in his first executive meeting and has much technical expertise and real interest in digital transformation. Jump six months later, and they are getting exasperated, your digital efforts have stalled, and your board is doubting the technology leadership strategy. It is not a story of the wrong choice of candidate. It is a tale about making the wrong environment to succeed.

Based on his analysis of the C-suite dynamics, Charles Sims notes that being in the executive role, you cannot expect people to figure out their path on their own. You must create the pathway. The firms who are winning the digital transformation are not merely finding better CTOs; they are creating whole new cultures in which technology leadership is possible.

Before we find a way to remedy the situation, we need to know what is actually going wrong. It is not a matter of personal ability, it is organization. The majority of executive structures were created at the time when technology was viewed as a cost centre and not as a strategic asset. The developed processes, meeting times and decision systems assume that technology is strategic rather than involved in its development. This creates what I call the integration gap - the difference between the position and the position of technology leaders to create real transformation. The work of Deloitte on resilient technology functions offers an eye-opening look at the matter: The workings of high-performing, tech vanguard organizations are fundamentally distinct in terms of how they structure their technology leadership. According to Khalid Kark and Anh Nguyen Phillips, these organizations embrace the concept of joint accountability and instilling sensing mechanisms which enable them to predict the business change. That is, they do not just adopt technology as part of business strategy, but rather, they do so entirely.

The strategic exclusion issue

This is the most expensive mistake that organizations make which is their use of technology leaders in attempting to validate their strategy instead of developing it. I have witnessed such a trend in a lot of changes. The business leadership takes months in the development of the digital strategy. They talk about the market positioning, customer experience, and reactions of the competitors. They then, lastly, bring in CTO to check on technical feasibility. It is not an act of collaboration, but a recipe of implementation failure. According to Isaac Sacolick, one of the leading advisors, the problem lies in making strategic plans written and conveyed to the leaders. Your business partners have to realize that you would be the key point in strategy development. The capacity to approach visionary planning with business leaders, technologists, and data scientists on a regular basis, whether we keep on course with our strategy or need to change it, that is the necessity of technology leaders today, constantly revising as technology changes. In cases where predetermined strategies are given to the technologists, they end up inheriting the restrictions, assumptions and omissions of non-technical decision-making. The outcome? Plans which sound promising in a presentation and which fail to deliver in action. The approach to integration: What makes successful organizations enlist technology leaders when they are setting goals? As Sims stresses, they do it. Technology leaders are no longer implementers.

The translation issue

Every organization boasts of seeking CTOs who are able to translate the technical complexity into business value. But the majority of these create circumstances under which it is almost impossible to translate efficiently. It is not that technology leaders are not communicative. It is the fact that business leaders arrange interactions in a way that prevents strategic thinking.

• Infrastructure decisions of 15 minutes
• Prohibition of technical presentations of high level only
• Breaks when the discussion goes into architectural details

Sims states the real need in a very eloquent manner: "Ask to be told how technology can be used to achieve something, not only to avoid failures. Going the way of empowering results requires time, situation, and substantive communication- not precipitous position statements. The integration strategy:

• Provide forums of large-scale technical deliberation
• To train business associates on possibilities, limitations and trade-offs, set aside time with the technology leaders

The innovative leaders I have studied do not talk about integration, but they plan it out systematically. The following are the four pillars that separate transformation champions and digital performance art.

Pillar one: Strategic co-creation

Traditional approach: Engaging technology leaders to get feasibility. Innovative approach: Having them on board in the strategic development. The paradigm shift is simple: Technology limitations and opportunities cannot be used to shape strategy, but only constrain it. Technologists can see opportunities that the pure business thought process may miss when they are involved in the strategic development. Implementation activities:

• Incorporate your CTO with your other quarterly business reviews (not technology reviews)
• Require technology executives to deliver as much accountability as other executives

Pillar two: Accountability based on outcomes

Traditional approach: Ask deliverables, and schedules. Creative procedure: Success as business performance and as it should be measured. This conversion makes the issue of translation to be completely absent. Technology leaders tend to be impact-oriented more than implementation-oriented when the definition of success is business-oriented, to begin with. The Deloitte study addresses the concept of value-based investments that are in line with the iterative development cycles. The real innovation is, however, not methodological but definitional. Business value created is the measure of success, not delivered features. Implementation actions:

• Substitute project status meetings with outcome assessment meetings
• Compensate technology leader based on business metrics, not technical ones only
• Develop shared dashboards of business impact of technology programs
• Compel business cases updates, not project updates only

Pillar three: Information architecture alignment

Creative strategy: Making sure that technology leaders share the same strategic environment as business leaders. Sims is correct when he states the following: The organizational structure must take note of that. Nevertheless, organizational design is not just about reporting, it has to deal with flow of information and decision making power. The Deloitte study underlines the fact that there is a need to have sensing mechanisms that can be used to envision business change. But sensing does not only demand reaction responsibility, but the availability of information. Implementation steps:

• Incorporate technology leaders in to customer advisory boards and market research evaluations
• Share competitive intelligence and industry analysis with the entire C-suite, rather than business functions only

Pillar four: Translation excellence

Traditional approach: Hoping to have implicit translation talent. Creative step: The systematic building up of bi-directional translation competence. This is the area that a majority of organizations get it wrong. They demand CTOs to translate well but do not develop, provide feedback, and encourage this critical skill. According to Sims, the best CTOs are those who can reduce complexity to clarity. They improve the knowledge of all people. That is the leadership ability that we need to consider. Nevertheless, the translation is a two-way process. The leaders of business need to also come up with the abilities of posing strategic questions to open up technological understanding. Implementation actions:

• Have monthly translation workshops where technology leaders get practiced in explaining complex things to different audiences
• Train business leaders to get better at asking superior questions: "What are the trade-offs?" instead of "Is this possible?"
• Lay the groundwork with technology education among non-technical executives
• Compensate and recognize technology leaders who successfully train the others within the company

The result of effective integration of technology leadership is spread far beyond personal performance. You make what the Deloitte study calls enterprise agility: the ability to respond to the ongoing change in a strategic way and be able to run. The argument is strong: when companies have combined technological leadership, they outperform their rivals in all important measures. When business and technology leadership truly work together:

• Revenue develops
• Profit margins increase
• The business has satisfied customers
• Employees are engaged
• Market share develops

Nevertheless, velocity can probably have the most significant influence. Integrated organizations are more flexible since they do not have the handoff delays, translation cycles, and rework processes that overwhelm the compartmentalized structures.

The competitive fact

As you continue maximization in technology leadership integration, your rivals have a choice. Others will be traditional: will take on smart technologists, deliver business needs, and ask why change does not come easily. The integration revolution will be adopted by other people. They will create conditions in which technology leaders are better. They will incorporate strategic partnership as part of their organizational base. They will gain more speed than their rivals as other firms grapple with shallow digital efforts. The study indicates that tech vanguard organizations are already differentiating themselves even out of baseline performers. It is not just a technical difference, but structural, cultural and strategic.

It is not the direction you take now toward your next technology recruitment, but your environment that creates technology leadership success.

This is up to you: To keep working with the old-fashioned technology leadership models or to build the integration capabilities that lead to the actual change. The new generation leaders are in the process of making decisions. What about you?