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Chief Transformational Officer – the New CTO

Chief Transformation Officer

According to Indeed, the Chief Transformation Officer (CTO) is “an executive who focuses on a company’s innovation, its future and its ability to gain forward momentum through executive, personnel or technological changes.” The CTO helps a company optimize its business processes and focuses on increasing the satisfaction of external target audiences as well as internal constituencies.

The Chief Transformation Officer challenges norms, looks for growth opportunities and introduces innovation. Essentially, the CTO is a change agent

Role of the Chief Transformation Officer

Whereas most CxOs have clearly defined roles, the CTO’s role is fluid. A Chief Financial Officer manages a company’s finances. A Chief Technology Officer manages the physical IT infrastructure, cloud services and software of the company. The Chef Transformation Officer works in all areas of the business to change processes, products, strategy or anything else that can bring positive change to the organization.

CTO – A Change Agent with No Defined Role?

Change is hard and often avoided by organizations. The CTO role is not well defined and fluid. Who would ever want such a job? How can you be successful as a change agent without a role and often without a staff? The success of a CTO is predicated upon a mandate and executive support.

  • A mandate is a clearly defined objective. Integrate the Chief Transformation Officer’s mandate with the bonuses of all C-Suite executives for maximum impact.
  • Principal Owner, CEO or Board of Directors support must be clear and unequivocal.

The specifics of how to achieve the goal should not be clear at the onset! After all, if the company knew what to do, why would they need a CTO?

Characteristics of a Successful CTO

When working in a transformational role, a person needs to have specific characteristics to be successful. According to articles by Forbes, BCG and McKinsey the characteristics which describe a successful CTO include:

  • Strategic – Having the best product does not guarantee sales! Strategic thinkers can see a vision of a new future state. A strategic leader sees a path to a unique position of value with the target customer. External conditions outside the company control drive strategy. A strategic leader creates plans based upon the best forecasts and assessments of external factors. In this aspect, the CTO is an architect of a future state.
  • Business Savvy– Successful CTOs have a solid understanding of the company, industry, target customers, and competitors. The knowledge and understanding often comes from parallel or tangential relationships with the industry. CTO’s who come from the “outside” are independent of past decisions, policies and “norms.” When an entrenched individual proclaims. “We have always done it this way,” they may be pointing out areas of opportunity.
  • Chief Conductor – The CTO must be a master orchestrator. Coordinating leaders and their staff to forge a new direction requires an integrator with great communication skills. Transformational change cuts across the organization and requires the support of leaders in operational, financial and other management roles. The CTO also needs to work with every level of the team to gather data, perspectives, insight and support. Similar to a conductor of an orchestra, the CTO not only directs, but coaches, delegates, and inspires throughout the organization.
  • Diplomat – Negotiation is a discussion aimed at reaching an agreement. There are many battles that need to be fought when transforming an organization and they are not all fought with big guns. A diplomat needs to understand when to use honey, carrots, sticks or howitzers. Although some decisions need to be made quickly, at other times, persistence and patience are key. Conflict is inevitable, and to be successful, the CTO must manage conflict in a constructive manner.

Why Hire a Chief Transformation Officer?

The pace of change is faster than ever. New technology is bringing competition from unexpected places. Artificial intelligence threatens many while also posing great promise. Sometimes change is necessary, but rarely easy!

According to McKinsey, less than a third of transformation reach their goals to improve organizational performance and sustain those goals over time. Reasons vary by project but include:

  • Lack of executive support or commitment over time.
  • Insufficient planning, monitoring and measurement.
  • Inexperience with change management.

Early research shows large-scale change programs achieve 24% more of their planned value when led by a Chief Transformation Officer. An experienced outside transformation expert can set the stage for success and train the team how to maintain momentum.

The Transformation Journey

Transformation is not a project. Transformation journeys only end when a business is sold or closes. Within the journey, there will be periodic projects which align with the business strategy to meet performance objectives. The journey never follows a straight path. It is imperative to periodically review the transformation journey and business strategy.

Large enterprises staff a transformation team that continuously interacts with other departments. Mid-market companies may have a full time Chief Transformation Officer and possibly a few staff who help coordinate ongoing projects. In smaller organizations, the transformation often starts with a consulting firm or fractional CTO with a specific mandate. In all these scenarios, the journey must continue after the initials project to sustain and maximize benefits.

Start Your Transformation

A clear understanding of how a company creates value for its target customer(s) drives Business Transformation. Although Digital Transformation is all the rage, technology is merely a tool that enables the strategic creation of value. Of course, the right tool in the hands of a skilled craftsman can increase efficiency, speed and beauty of the end product, used without skill or knowledge, technology can also destroy.

I-Business Network provides CxO services, where x is a wildcard, to help companies plan and/or implement a strategic initiative. Our outsourced CxOs work for, and represent you. as a member of the leadership team. I-BN executives have extensive experience designing, planning and leading digital transformation initiatives for companies between $10-$250 million revenue for distributors, discrete and job based (ETO, MTO) manufacturers, professional and project based services in a broad range of industries. To learn more schedule a no-cost or obligation CxO Explore to determine if we have the skills to help transform your company.

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