Regardless of the title your company’s top technology executive uses — CTO, CIO, Chief Product Officer or VP of Engineering — your company will ultimately look to this person to produce the software and technical products upon which your business success depends. Through our earlier career experiences (at Quigo, eBay and PayPal), and now through our consulting practice (AKF Partners), we’ve noticed that there are five consistent reasons why a tech executive fails.
Perhaps the most commonly assumed “failure scenario” is that the CTO is simply not technical enough to inspire confidence in the engineering team. This is not the case. In fact, it is actually rare that a CTO is removed because he or she lacks technical acumen. The truth is that your senior technology officer does not need to be the brightest technical mind in the business, except, potentially, during the startup phase of your company. Over time, he or she need only be geeky enough to challenge the strongest technical minds in your company to add value to technical decision-making. Most often, we find that senior executives come to a bad end when they spend too much time relying on their technical brilliance and not enough time cultivating other important aspects of their job.
The Top 5 Tech Exec Failure Scenarios we list below are not mutually inclusive, but they all support one very important conclusion: when technology executives fail, it is not because they lack an individual skill. It is because they lack an an adequate balance of the many technical, operational and leadership skills necessary to make them a complete manager.
5. Failure to Build World Class Team
As important as any other aspect of your job is the need to cultivate the best team possible given the limitations of your budget, mission and headcount. Rather than spending time on improving the capabilities of their teams, we find that many chief tech execs spend a great deal of time attempting to compensate for deficiencies within their teams. A very typical example of this is a CTO personally taking responsibility for every technology decision within a company. While this is a necessary practice when the team is very small, it does not scale into organizations of hundreds or thousands of engineers. All managers must be able to delegate to succeed.
4. Failure to Execute
At the end of the day, our jobs are all about creating and maximizing shareholder value. Failing to bring products to market in a timely fashion, releasing products with unacceptable levels of defects, and failing to meet contracted delivery dates are all examples of failing to execute to the expectations of your customers, partners and, ultimately, your shareholders.
3. Failure to Lead/Motivate/Inspire
Leadership has to do with those things that inspire an organization to achieve remarkable and extraordinary results. Painting a vivid description of the ideal future of your organization and setting aggressive but achievable goals are some of the aspects of leadership most often missing within the office of the chief technology executive.
2. Failure to Manage Operationally
Often, performance lapses by technology executives root to a lack of planning, communication or measurement — the very building blocks of operational management, as taught in business school. But you cannot improve what you do not measure, and you cannot guarantee maximum shareholder value without showing how you are improving results. Planning is an essential management activity as it helps align your team with your vision, mission and goals and helps ensure the efficient use of resources. Communication between and within organizations as well as to your shareholder base helps keep everyone in sync with your progress, needs, accomplishments and corrective actions.
1. Lack of Financial Acumen
In our experience, this is the top failure scenario among technology executives. Most technology curricula do not teach the basics of how businesses operate in financial terms, such as: capital markets, equity or debt finance, sales accounting, cash flow management, or even business strategy (such as Michael Porter’s 5 Forces). By the time most technologists have become executives, they’ve spent a lot of time learning their engineering trade, but they’ve had precious little opportunity to really learn about the mechanics of how a company runs.