Chief Technology Officer (CTO) is one of those job titles with widely varying definitions. As defined on Investopedia: A person in this role, "examines the short and long term needs of an organization, and utilizes capital to make investments designed to help the organization reach its objectives … [who] is the highest technology executive position within a company and leads the technology or engineering department." To be more specific, a CTO guides company-wide decision-making on topics such as; cloud migration, technology stack components, information and system security, staffing strategies, and, development process practices.
CTO is not the same role as VP Engineering; a role focused on the day-to-day management related to delivering the next version of product.
Nor is it the CIO; a role which is primarily focused on internal company users and the systems that enable their business processes, which includes everything from email to ERP systems, and, systems integration, and, internal systems security, and, business data analytics, and, custom software that supports some client-facing processes. CIO skills and experience vary vastly across industries.
Neither is a CTO the same as a VP of User Experience, nor a VP of Product nor even a COO. And yet, the CTO is often called upon to perform parts of many of these roles because they are the most senior technology manager available even though these roles require quite different skills and abilities.
So, back to the original question; Do I really need a full-time CTO?
The first step in deciding is to define the roles your company needs given the above definitions. Second, decide on the skill level and the time commitment you require for each. Then allocate your available budget.
Of course, your budget may not cover all your requirements. So, how do you decide whether you need a full time CTO on staff, or, will an interim or part-time role suffice?
What else does an effective Chief Technology Officer do?
A CTO must grasp relevant technology industry trends to make good strategic decisions. For example, to make decisions like Selecting Languages and Platforms, you need to weigh innovation against risk. Selecting the latest and greatest but unproven open source project, for example, might not be the best call. Selecting a new programming language with few expert practitioners might be good in the long run, as long as in the long run, the training costs don't kill you first. These kinds of decisions are only made occasionally and so can be scoped as specific analytical tasks.
An effective CTO brings to the firm both a grasp of technology and business and guides company decision making with an eye to future business strategy disruption prompted by technology. This kind of corporate advisory role is rarely a full time job.
Most importantly, the CTO must also be an effective communicator with non-technical executives and be able to talk to the C-level executives as a peer. An authoritative CTO is therefore usually an experienced CTO. One of the best means for acquiring effective communication skills and breadth of experience is to work with many companies in many contexts. So, a consultant with experience advising many firms is often the most effective.
Most startups don't need a CTO and here's why.
In our experience, for small firms and startups, the guidance a CTO provides is needed only on an interim basis for certain key decisions and as a fractional role for corporate decision making. For smaller firms, what is most essential is a full time Director or VP of Engineering, overseeing daily technology work, with only periodic strategic advice from a seasoned technology leader. So an interim or Consulting CTO makes far more sense.
2. Help define a technology architecture aligned with the business strategy.
5. Determine the Minimally Viable Information Security a firm needs, since only the best-funded can afford a dedicated CISO.
Where can I find a qualified consulting CTO?
Network with business associates, board members, or advisory firms for recommendations, and spend the time necessary to be comfortable with their candidates.
Watch startup social networks like Cofounders Lab and Crunchbase for talent coming available.
Introduce yourself to Telegraph Hill Software where we specialize in Interim Technology Leadership consulting.
Telegraph Hill Software provides skilled, experienced and affordable consulting CTOs, highly experienced with startups, smaller firms and more mature organizations. We employ multiple former startup CEOs, CTOs and Engineering VPs to solve such challenges. Our clients benefit from a periodic infusion of experience and discipline, and get long term benefit by retaining our consultants at a fraction of a full-time CTO's cost.
You can read about our Interim Technology Leadership services.