The Point: At Tip of the Spear Ventures, and our Business Transformation consulting firm — The Zeroing Agency — We know that a highly skilled and experienced leader will significantly enhance the odds of an effective business transformation. This leader — the Chief Transformation Officer (CTO) — is the key to Business Transformation! But what if your organization doesn’t have a CTO? Through our experience with a variety of organizations that have taken this path and have seen CTOs who are devoted to driving the company forward, and held accountable to those responsible for the numerous (even thousand) of activities and projects that comprise the typical business transformation plan. Effective CTOs are able to inspire employees and serve as role models for the kind of behavior required to inspire and instill changes. So in this post we’ll look to answer the question, “Should you hire a Chief Transformation Officer (CTO)?” along with eight questions… Enjoy!

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A Chief Transformation Officer’s (CTO’s) Job Description

At the core of the CTO’s job is the capacity to achieve the proper equilibrium between carrots and sticks in achieving short-term improvements as well as long-term value and between ensuring that line managers take personal responsibility for change , and ensuring that they can deliver their results swiftly and with the appropriate level of expectations. This judgment is crucial when it comes to allocating the resources that are often at resources to address the diverse needs of a change.

CTOs must be impartial (certainly not tied to the decisions made in the past) They should have had experience in similar corporate environments that were turbulent during their previous careers, and receive the support of the CEO, the board and the upper management. Their mandate–responsibility for ensuring that the full bottom-line target gets delivered–must be clearly defined at the outset. They must be integrated fully in the team of executives (not isolated to separate units for transformation) and their pay is to be tied to their results, including a significant reward for exceeding the target. Ideally, they should act as an extension of the CEO or the board, and have the ability to hold highest-ranking managers accountable.

The CTO – A Project Manager on Steroids?

The CTO is the top-level orchestrator of a complex system that includes a variety of distinct initiatives. The responsibility for making day-to-day decisions and implementing the initiatives is with the management, but the CTO’s role is to ensure the task is completed. This isn’t always easy.

The CTO is the persona of the change and sets the tone, encourages excitement, and challenges the conventional wisdom. Similar to a drill sergeant in the military who insists on daily push-ups as well as 10 mile runs The CTO has the goal of ensure that the organization is fit in order to maintain the efforts over the long term.

Excellent CTOs are those who believe in nothing without the benefit of facts and an independent analysis. They aren’t just business leaders and problem solvers They also have an emotional quotient that is high and excellent interpersonal abilities. The most effective transformations we’ve seen result from CTOs in generating enthusiasm and leveraging the capabilities of a wide range of abilities. They recognize and reward the best performers.

The book “Outliers,” author Malcolm Gladwell famously promoted the idea (since challenged by other authors) that it requires around 10,000 hours of work to master the area. Being a competent CTO definitely requires this kind of instruction. In this regard it is essential that CTOs are able to draw on a broad cross-functional background (as as opposed to being an expert in a particular field) and have experienced many different circumstances and issues in their professional career. With this knowledge, they be able to tell how to encourage and praise and when to work tough.

The Biggest Threat to Chief Transformation Officer (CTO) Success

We’ve witnessed CTOs fail when their authority is compromised. Here are two instances of what could fail.

1. Poor Governance. Issues arise whenever the CTO is treated as an employee on the corporate staff. This is often the case when businesses set up the traditional office of program management. The CTO’s authority and capacity to influence the process is derived from his or her CEO. The CEO clearly lends the CTO authority as well as support to the process of transformation. Anything that violates this implicit agreement undermines the CTO. For example, when the board or the CEO are able to hold the CTO accountable, but do not give them the ability to influence the decisions of business transformation. The CTO should be able invite senior executives (including even the CEO) for attendance at meetings and, in turn, the CEO should provide regular and consistent messages of their confidence and support in the business transformation initiative.
2. A Negative Environment. If employees and managers do not recognize the urgency of making changes, the CTO’s task will be a continuous struggle. The CTO must make a conscious effort to change these negative attitudes and behaviors, instilling within the workplace a preference towards actions. A mindset such as “that’s the method we’ve always used in this organization” are extremely destructive particularly when they are shared by the top managers and must be resisted with vigor. The time wasted in useless debate and bureaucracy indicates that the company isn’t fully supportive of the methodology and tools of the business transformation shift in which case the message of the CTO isn’t being heard now or ever.

Eight Questions for the Chief Transformation Officer

The success of a change initiative is dependent on the CTO being able to solve a vast array of business and organizational problems. Here are eight (8) important questions CTOs must consider:

1. Have I got the complete backing of the CEO as well as the Board of Directors?
2. Have I gotten involved with the vested interests of my current employer and killed any/all/most sacred cows?
3. Have I created a pattern like a clock that changes the rate of metabolism in the company?
4. Have I gotten to know the frontline team members and have I created a sense of their struggles and views?
5. Do I have the ability to coach the CEO and top management team in successfully changing the way they manage the change?
6. Have I got a clear perspective on where the true value is within the organization, and when/where we can’t allow ourselves to make compromises?
7. Have I purposely made a few squabbles with the top line leaders and persuaded them to make changes successfully?
8. Do I know the dominant mindset/culture and the areas it should change?

SUMMARY

In this post we’ve looked to answer the question, “Should you hire a Chief Transformation Officer (CTO)?” along with eight questions. This leader, the Chief Transformation Officer (CTO) is the key to Business Transformation! A highly skilled and experienced leader that significantly enhance the odds of an effective business transformation. Through our experience with a variety of organizations that have taken this path and have seen CTOs who are devoted to driving the company forward, and held accountable to those responsible for the numerous (even thousand) of activities and projects that comprise the typical business transformation plan. Effective CTOs are able to inspire employees and serve as role models for the kind of behavior required to inspire and instill changes.

Sam Palazzolo