Why the traditional CTO is history

A Fortune 100 company's description of the chief technology officer it hoped to hire read as follows:

"S/he will have strong business acumen, and will likely have spent time in the high-tech business development arena. S/he will also have a proven track record of working successfully with venture capitalists and be able to negotiate complex deals with stakeholders." The CTO selected was also required to "work with product group general managers and business development managers to determine future technology opportunities."

This was not an exception to the rule.

As companies face a more sophisticated marketplace, the CTO's role is shifting to include a broader business and financial focus. No longer can companies inform shareholders they intend to invest in projects that have uncertain destinies. The days of developing "cool toys" without regard for the "real world" are gone.

Despite the misnomer in the title, most of a CTO's time and energy is not directed at technology issues, per se, but at the business strategy related to technology.

"Everything I think about is related to the company's core business strategy and financials," says Linda Capuano of Honeywell. "I think about what technology is going to differentiate us in those markets. From there, I go into execution mode."

Mike Liebhold, VIP Tone's CTO, spends 70 percent of his time thinking about long-term strategic issues and working with outside labs, scientists and engineers. "When we are thinking about making a strategic investment or acquisition, I spend most of my time thinking about the due diligence behind the deal."

Most of a CTO's time and energy is not directed at technology issues, per se, but at the business strategy related to technology.

Another CTO, Greg Powers of GE Plastics, agrees. "In addition to understanding products and their underlying technologies, I want to thoroughly understand the competitors and what the barriers to entry are."

During the course of research, we discovered that many of the self-titled "propeller heads" holding CTO posts come from highly technical fields and academia. To make the leap into business, nearly every CTO stressed the importance of obtaining management training at a large company like IBM or GE, where one can learn "how things are done" and develop effective management skills that will drive growth. Failure to do so could result in the marginalization of an otherwise gifted executive.

While the CTOs we spoke with agreed about the need to obtain management training, their paths often diverged from there. Some chose to stay with the large companies where they cut their teeth but switched focuses, like a senior scientist at Apple Computer who moved to the business development group.

Others went on to smaller companies or even start-ups. Linda Capuano made such a shift and co-founded a start-up after being an engineer at IBM. Unlike large companies, where someone trying to effect change outside of their immediate area of expertise may be viewed as a distraction, the small company experience allowed Capuano to experience different areas firsthand within the organization and make change happen on an almost daily basis.

More than glitz and glamour
While some people see the CTO as the person who "gets to do all the cool stuff," the position is not without its drawbacks. "The most challenging thing about being a CTO is that you don't have production-class deliverables. As a result, sometimes you are treated as an outsider from line engineers," Liebhold said. Another CTO lamented, "Divisional line managers don't have to take your recommendations because you have no explicit line authority. Your only power is the implicit power and your ability to persuade and explain."

The modern CTO is part propeller head, part M.B.A. student, with a strong dash of independent sprit thrown in for good measure.

One former CTO of a privately held company agreed. "I think being a CTO is the most thankless job because you're stuck between the business guys who treat you like an overgrown engineer and the engineers who no longer respect you because you have crossed over onto 'the dark side.'"

This challenge can be partially mitigated by regularly gathering all the senior technology gurus and product planners for strategy sessions to attempt to "share the glory" and solicit everyone's input.

So what is inside the mind of the CTO? An executive equally comfortable with business and technical concepts, the modern CTO is part propeller head, part M.B.A. student, with a strong dash of independent spirit thrown in for good measure.