Do I Really Need a Full Time CTO?

CTO, Interim CTO, Chief Technology Officer

Chief Technology Officer (CTO) is one of those job titles with a very slippery definition. 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.

But how do you decide when and if to hire a CTO if the short and long term needs of the firm are not clear?

Ideally, if finances are no object, a Chief Technology Officer is to provide strategic and forward guidance, a visionary capable of understanding the emerging technology landscape and anticipating disruptive trends.

In most firms, however, CTOs spend their day on tactical or reactionary management, which visionaries are often loathe to do.

What else does an effective Chief Technology Officer do?

An effective CTO brings to the firm both a grasp of technology and business. A well-qualified CTO makes technology decisions considering budgetary, funding, and market factors.  A CTO understands the challenges of talent acquisition, carrying costs, and return on investment associated with specific technology choices.

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.

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.

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 for certain key decisions. What nearly all smaller firms need is day to day technology management to guide technology development, delivery and operations.

In smaller firms and startups, a Chief Technology Officer is often added to the team to:

1. Help define a technology architecture aligned with the business strategy.

2. Hire a technical team.

3. Serve as a hands-on director of engineering, providing team guidance and daily oversight.

4. Increasingly, determine the Minimally Viable Information Security a firm needs, since only the best-funded can afford a dedicated CISO.

Such CTOs must be willing and able to involve themselves with the day to day grind of managing a technical organization, including operations. That’s not always the case with experienced CTOs, who may prefer the high ground.  And sourcing and recruiting an experienced CTO means premium recruiting, salary and equity costs.

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.

A good Consulting CTO will:

  • Have the interpersonal skills to provide strategic advice to executive staff.
  • Have the experience to quickly evaluate an existing team, its processes and products, and rapidly implement necessary changes.
  • Help firms hire their full time day to day Directors and VPs.
  • Provide periodic supervision and strategic guidance under a retained consulting contract that conserves available budget.
Where can I find a qualified consulting CTO?

A consulting CTOs will bring knowledge and experience to smaller firms that don’t have the time or money to make strategic mistakes.  You can find an interim or consulting Chief Technology Officer in a couple ways:  

  1. Network with business associates, board members, or advisory firms for recommendations, and spend the time necessary to be comfortable with their candidates.
  2. Watch startup social networks like Cofounders Lab and Crunchbase for talent coming available.
  3. Find for a consulting firm that specializes in technical management leadership — like Telegraph Hill Software.

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 here: https://telegraphhillsoftware.com/interim-cto/

Sources

https://www.investopedia.com/terms/c/chief-technology-officer.asp

Peter Parker

Peter Parker
Peter has over a decade of progressive experience developing and marketing digital products and services. He has extensive experience leading early and growth-stage companies in developing their strategy, product, marketing and business development.

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