Forbes.com
This article originally appeared on Forbes.com (subscription may be required).
“Why in the world would I want to further complicate the C-suite with another position?” asked the largest shareholder on the board of a major Japanese industrial conglomerate. “Isn’t it the job of the CEO and existing team to transform the company?”
In fact, the idea of a dedicated chief transformation officer (CTO) has been around for a number of years, but given today’s ever-increasing pace of change, it’s gaining steam. Why?
A growing body of evidence indicates that large-scale transformations need a dedicated CTO to partner with the CEO to successfully navigate and accelerate change. Early data from Bain & Company’s database of corporate transformations shows that large-scale change programs achieve 24% more of their planned value when overseen by a dedicated CTO.
Distilling input from more than 250 CTO attendees of Bain Full Potential Transformation Forums over the past five years and work on more than 700 business transformations, there are five critical roles a CTO must play: strategic architect, integrator, operator, coach, and controller.
Each will be important at different times. Often, a CTO plays several at once. The former CTO of a global technology company compares the role to using a Swiss Army knife: “There are multiple tools in the knife. You have to use them all at one point or another and be equally adept at all of them.”
1. Strategic architect
In the initial stages of the transformation, the strategic architect is the single most important role, according to the executives surveyed.
As strategic architect, the CTO advises and aligns the CEO and the executive team on their shared ambition and what the transformation will involve. The CTO also shapes the portfolio of initiatives and ambition, articulates how all that work will be done, and identifies who among the company’s A-level players will be needed to lead the work.
2. Integrator
The integrator role, connecting the value expected from the transformation program to its delivery, is also critical from the beginning. As integrator, the CTO builds the organization’s capacity for change and cultivates new leadership behaviors that ensure sustainable results. This often requires simultaneously working on strategic initiatives designed to change the business while supporting the efficient running of everyday operations.
In order to maximize the transformation’s return on investment, the CTO, as the one person who can see across the transformation, must identify, prioritize, and facilitate the capital, people, and time devoted to the highest-value initiatives.
Integrating different parts of the organization and helping silos work together is necessary because the solution to many of the challenges that arise will require the involvement and leadership of various parts of the organization. The CTO must at the same time manage the transformation team’s capacity, setting realistic expectations, or risk burnout. The most successful CTOs do this by avoiding politics, acting as diplomats between functions and levels of the organization while pragmatically focusing on its evolution.
3. Operator
Later, as strategy and design become clearer, the operator role becomes more critical. In this role, CTOs plan and guide initiatives that bridge multiple functions and business units. They solve problems, manage conflicts that inevitably arise, and rally operational business leaders by identifying their concerns and helping address operational issues.
4. Coach
As coach to the CEO and top executive team, CTOs support their journey of adoption by listening to their concerns and revising and adapting plans based on that input. They also identify the limited number of critical skills an organization needs to win market share; they then strengthen organizational capability by putting the best people in those roles and offering them training and coaching.
Like any great coach, the CTO must also be a master communicator, the cheerleader providing encouragement and inspiration, celebrating progress and victories, and injecting energy and confidence into the organization.
5. Controller
In the controller role, the CTO manages risks, ensuring a “red is good” mindset that values honest reporting and early warnings. This includes watching out for “watermelons”—initiatives that look like they are going well on the outside (green) but just below the surface are struggling (red). The CTO and their team track progress and help overcome roadblocks as they arise. When they are able to create a sense of urgency based on this experience, a CTO can help the transformation log early successes, giving the project energy and momentum.
The degree and complexity of change required in business today increasingly necessitates additional resources and expertise. It simply is not reasonable for investors and executives to expect a different output—transformative change in their organizations—while doing “business as usual.”
In this environment, clarifying when and how to set up the chief transformation officer role is critical. Like the Swiss army knife, there are multiple roles that a CTO needs to play over the life cycle of a business transformation. Using the right tool at the right time can make all the difference.
First published in Juni 2023