Are CTOs finally getting the respect they deserve?
Photo: @amynmc via Twenty20

Are CTOs finally getting the respect they deserve?

Thirty-seven percent of CEOs identified the CTO/CIO role as among those responsible for the most crucial functions over the next two to three years, the highest-ever spot in the “2021 CEO Study” by IBM.

The CTO/CIO role ranked third behind the CFO, cited by 57 percent among crucial functions, and COO, 56 percent.

Among the roles the CTO/CIO is gaining on:

  • Chief marketing officer (CMO), was cited by 19 percent of CEOs as crucial this year, down from 66 percent in 2013;
  • Chief innovation officer (CIO), was cited by four percent as crucial, down from 47 percent in 2013;
  • Chief strategic officer (CSO), was cited by six percent as crucial, down from 67 percent in 2013.

The streamlining of exec roles reflects the study’s finding that “flatter, faster, and more flexible structures are succeeding.”

The study, based on a global survey of 3,000 CEOs, further found tech maturity is “an even more important” performance differentiator, with organizations investing in cloud computing, artificial intelligence (AI) and the Internet of Things (IoT) performing better than peers during the disruptions of 2020.

The report referenced IBM’s “Digital acceleration” report that showed digital maturity is significantly correlated with financial performance. The researchers in the CEO study wrote, “Technology not only enables agility — it is central to enabling a hybrid workforce, as well as both operational efficiency and customer engagement.”

Asked which technologies will most help deliver results over the next two to three years, the top answer was Internet of Things (IoT), cited by 79 percent; followed by cloud computing, 74 percent; and artificial intelligence (AI), 52 percent.

The study still found that the role of corporate leaders “has become even more complex” as managing technological disruption competes for execs’ time with demands for sustainability, corporate purpose, employee engagement and other priorities.

Asked which skills will be most important to their company’s needs over the next two to three years, the top answer among outperforming organizations were those that were industry-specific, cited by 70 percent; followed by technology, 69 percent; flexibility, agility and adaptability, 51 percent; innovation, 46 percent; teaming and collaboration, 40 percent; and ethics and integrity, 40 percent.

BrainTrust

"If the other C-suite roles are not equipped with first rate tech and digital skills, then they are competing with analog skills in a digital world. "

Jeff Sward

Founding Partner, Merchandising Metrics


"More than any of your CXOs, other than the CEO, The CTO/CIO should be a driver of the future of the company."

Gene Detroyer

Professor, International Business, Guizhou University of Finance & Economics and University of Sanya, China.


"The most effective technology leaders I’ve worked with don’t focus on technology. The best focus on how their technology customers will experience the technology."

John Hennessy

Retail and Brand Technology Tailor


Discussion Questions

DISCUSSION QUESTIONS: Is the third position behind the CEO about right for the CTO/CIO role when it comes to c-level hierarchy? Have roles such as chief innovation officer, chief strategic officer and even chief marketing officer become less relevant amid digital transformation or is it a temporary shift?

Poll

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Patricia Vekich Waldron
Active Member
3 years ago

Retailers run on technology. Every critical function uses systems, data, devices and digital connections to plan, operate, analyze and iterate. Without a stable, secure, agile and extendable technology foundation and a top team to manage, monitor and continually search for new innovations to improve operations a retailer will fall behind.

In 2020 the companies that prioritized and invested technologies were the ones who succeeded. The pandemic revealed many cracks in our society including the digital divide in industries and individuals. Talented technical teams are critical to keep companies operating efficiently and innovating at scale.

Dave Bruno
Active Member
3 years ago

The last year has taught us that the ability to rapidly adapt to change is a mission-critical organizational capability, and technology is a critical element to creating enterprises built for change. I think that’s why CEOs now – more than ever – recognize the CTO as the executive responsible for implementing a technical infrastructure capable of enabling their organizations to thrive amid constant disruption.

Rick Watson
Reply to  Dave Bruno
3 years ago

“The last year has taught us that the ability to rapidly adapt to change is a mission-critical organizational capability.”

You make an interesting point here. I think the note above places too much emphasis on a “role” and less on (often broken) organizational processes that hinder innovation – be it technological innovation or otherwise. The role is interesting yes and important, but collaboration and the ability to adapt and anticipate the needs of the organization without bureaucracy is critical.

Suresh Chaganti
Suresh Chaganti
Member
3 years ago

The number of players in a typical retail value chain has exploded with multiple sales channels, marketing channels, third-party logistics providers, and delivery partners. Technology enablement and analytical insights are going to be the key competitive differentiators. It is no surprise that CTOs are getting a seat at the table. Leading companies recognized this five to 10 years ago and were best positioned for the pandemic. Laggards are trying to catch up.

Jeff Sward
Noble Member
3 years ago

Sounds to me like the CTO/CIO role is first in line after the CEO role. If the other C-suite roles are not equipped with first rate tech and digital skills, then they are competing with analog skills in a digital world. That won’t cut it in this market.

Bob Amster
Trusted Member
3 years ago

This is a difficult question to answer for the following reason: The business of retail is to buy interesting products for the least cost possible and sell those products for the highest price possible, in the best locations, to the most customers. The word technology is not anywhere in here. Technology is an enabler to accomplish all of the above.

So as important as it is, merchandisers, marketers and store or e-commerce operators and supply-chain executives are all directly involved in the four objectives above, and as important – if not more so – than a CIO. The roles are changing in importance simply because technology has been found to be not just a competitive advantage, but table stakes. (This does not precluded successfully selling delicious fresh fruit from a pushcart for cash only.) So in the ever-changing analysis, the CIO is sitting at the C-table and not more than two rows behind the CEO.

Oliver Guy
Member
3 years ago

Technology cannot solve all retailer problems but problems cannot be solved without technology. It makes sense for the CIO/CTO role to move up the hierarchy in this way. Technology cannot be ignored by retailers when it is such a key tool for differentiation. Traditional differentiation methods such as price and assortment are now much more difficult to use. CX is a key tool but irrespective of which of these three a retailer picks to differentiate, technology is going to play a key and central part.

Brandon Rael
Active Member
3 years ago

With all momentum around digital and the imperative to modernize organizations, it is impossible to achieve any transformation without the right leaders in place. Unlike the traditional CIO role, the CTO has become increasingly important, as having the right technology infrastructure, organizational support, and innovations are key to success in the modern commerce world.

Having the right leadership in place ensures that organizations de-invest in failing/legacy processes and invest in the value-added technology investments. The digital-first imperative calls for dynamic leaders who can drive organizations to shift to a more agile strategy and ensure that innovations are prioritized.

Cynthia Holcomb
Member
3 years ago

CTOs not getting the respect they deserve? It’s a curious question given most retail leaders have, at best, limited knowledge of the technologies powering their supply chain resulting in customers being able to buy their stuff. Without a CTO, all the other “Chiefs” of this and that are stuck in an analog world. Personally, I hold high regard for the role of the CTO as a working partner, powering the digital execution of all things retail.

John Hennessy
Member
3 years ago

Being on the selling side of retail and brand technology for a very long time, the most effective technology leaders I’ve worked with don’t focus on technology. The best focus on how their technology customers will experience the technology. Their technology customer could be a delivery driver, shopper, store manager, supplier, partner, headquarters employee, or a blend of all. Each technology customer interacts with technology in different ways due to the their work environment, role, experience and skill set. Discussions I’ve had with strong technical leaders focus on how to simplify or automate routine tasks, how to deliver training to remote employees, how to offer self-directed refresher videos, how to support new employee onboarding, or how to replace system elements quickly and efficiently for continuous operation. When they are comfortable that you understand the audience they serve and can help them serve that audience, the conversation moves to validate the investment. Feature set and service enhancements are part of the conversation about serving their technology customers. Yes, you better be able to deliver, but more importantly, you must be able to align with and serve the unique requirements of their technology customers.

Customer-focused conversations about technology adoption used to be unique or an afterthought. It was buy tech on features and ROI and push it out. I don’t miss those days.

The evolution of those in technology leadership roles from evaluating technology features to serving customer segments through the right approach has a lot to do with elevating the importance of CTOs.

Kim DeCarlis
3 years ago

The relative importance of a specific C-level position varies based on the company, its strategy and its relative maturity, as does the scope and definition of a specific role. (Does it strike anyone else as interesting that this is about CTO/CIO — they are different roles in MANY companies.) So it is not wise to paint everyone with the same brush.

For companies that have been behind the digital eight-ball, it is logical that the CTO/CIO role has risen in importance as the pandemic has accelerated the need for digital-first thinking. For companies undergoing brand transformation, the CMO role is likely the most important. If a strategic change is in the works, then it is likely the CSO.

And it is important to note that the skills highlighted as critical — agility, collaboration, ethics — are not positionally specific. So the long and short of it is that I believe this is a temporary shift and in a year or two from now, the market will have made another position “most” important!

Gene Detroyer
Noble Member
3 years ago

I don’t believe technology is getting the respect it deserves in the retail environment. Therefore neither is the CTO/CIO.

What too many people call the CTO/CIO is the person who takes care of today’s technology challenges. What the position should be is the person who sees how technology will affect the company in the next 5 years. More than any of your CXOs, other than the CEO, The CTO/CIO should be a driver of the future of the company,

Craig Sundstrom
Craig Sundstrom
Noble Member
3 years ago

Many, if not most companies are dominated by sales people, and every other department — logistics, facilities, finance, technology — has to struggle to be seen as something other than a cost center. It’s an unfortunate, indeed child-like perspective for management to have, but it is what it is.

So with that in mind, I would have to disagree with the idea of other “C”s becoming LESS important. Tech has just joined the list of EQUALLY important.

Ivano
Ivano
3 years ago

This is a really strange discussion. CTO is responsible only for development, not for business or product. The key position in digital business is Chief Product Officer (CPO), that person is responsible for R&D, customer success and digital service. Not CTO!

Ricardo Belmar
Active Member
3 years ago

I suspect most retail CIOs/CTOs are looking back at 2020 as both the worst of times and the best of times. Worst, because of the huge lift it imposed on technology in retail and the need for IT departments to rise to the occasion and do things at a rate they’ve never encountered before. Best, because, well, the exact same reason!

IT departments learned they CAN execute new things quickly and reliably when pushed to do so. In 2021, it’s not surprising to see CEOs feel these executive leaders are critical to their success. 2020 proved how valuable well-executed technology can be to retailers. While technology isn’t the answer on its own, it’s a tool that requires good leadership to implement effectively. I don’t think this is temporary. While the immediate focus is, the long-term implication is that retailers will become more dependent on technology not less so these leaders will continue to be an important part of the leadership team.

Kenneth Leung
Active Member
3 years ago

A strong CTO doesn’t help if the rest of the leadership does not recognize the importance of technology in retail across supply chain and customer experience. Merchandising decision always come first for retailers (bad product mix decisions can’t be fixed by technology based customer service or supply chain) but technology and HR goes hand it hand after that.

Rick Watson
3 years ago

Here’s the problem with most companies – they don’t prioritize digital expertise across the company and they completely miss the fact that the skillsets required to compete in modern business have transformed.

The critical question for me is almost always: is there a technology leader who is responsible for customer and revenue-facing systems exclusively?

If the answer is no, then what you often have is “head in the sand” IT, project-based work, slow innovation, and a fear of change because it will mess up compliance.

IT is (sadly still) mostly a blocker and in many companies the CTO or CIO are the same person. If the department is BOTH enabling business insights and resetting executive’s Salesforce passwords when they forget them, then “Houston, we have a problem.”