The New CTO: Chief Transformation Officer

The New CTO: Chief Transformation Officer

by Daniel Burrus  |  11:00 AM August 14, 2013

We all know that if you put a frog in water and slowly heat it to the boiling point, the frog will stay put and die. But if you throw the frog into already boiling water, it will quickly jump out. Today’s IT leaders have known about the exponential growth of processing power, storage, and bandwidth, but like the frog, they didn’t notice the boiling point approaching because the change has happened over so many decades. These three change accelerators are what lie behind today’s avalanche of business transformation, and they are directly affecting the roles of CIO and CTO. In a recent article, I suggested that the role of the CIO needs to shift from Chief Information Officer to a Chief Innovation Officer, due to the massive, rapid, multiple technology-driven transformations that are occurring today. And, just as the CIO’s role needs to change, so too does the CTO’s—from Chief Technology Officer to Chief Transformation Officer. This fundamental shift is necessary to elevate the position’s contribution and relevance.

While the CIO has historically been focused on the technology needed to run the company, the CTO has been responsible for the technology integral to products being sold to customers or clients. However, over the next five years every business process is going to undergo a major transformation. For example, IBM executives recently shared with me that over 40 percent of their profits are now coming from products and services that were impossible just a few short years ago. That reflects the transformative nature of business today as well as the speed of the transformation. This is just the beginning and someone has to lead that transformation.

CTOs must embrace the role of Chief Transformation Officer. No longer will this position’s relevance be tied to how well he or she can oversee the development of technology. In the near future, the CTO will need to oversee the transformation of every business process, including how you sell, market, communicate, collaborate, and innovate. That means the CTO’s role will shift from aligning technology to applying technology to accelerate business strategy, from communicating technology plans to the executive team to integrating a transformation imperative and applying the process to all executive-level planning. That’s a huge shift.

This also means that the CTO and CIO need to collaborate more closely. Because so much of the CIO’s traditional responsibilities are now virtualized with nearly everything as a service (XaaS), the CIO is free to focus on innovation. Game-changing product and service innovations can be more easily identified when transformation is a business imperative. With the CTO focused on identifying how to use technology to transform processes, products, and services, the CIO can then use these insights to implement innovation.

For example, the CTO of Amazon, with a role focused on identifying transformational tools, would see that 3D printing (additive manufacturing) has recently reached a turning point and is now being used to manufacture a wide range of products, from jet engine parts to human jaw bones. This turning point has already opened the door to a rapid revolution in customized and personalized manufacturing for companies of any size. The CTO would make sure the CIO sees that a transformative turning point has been reached, and working together, with the CIO’s new focus on innovation, they could craft a major opportunity by offering on-demand 3D printing services for any individual or company.

Manufacturers of customized and personalized products would no longer have to own any manufacturing equipment thanks to Amazon. Instead, they would focus on designing a product and sending the CAD design to Amazon, who would manufacture it with one of their industrial strength 3D printers best suited for the design and then ship it directly to the customer.

The Amazon strategy I described above has not happened — yet. But we all know that Amazon’s cloud services have proven to be both profitable and disruptive. It’s not hard to see how this new cloud-based manufacturing service would take Amazon to a whole new level.

It’s up to the Chief Transformation Officer to ensure that your company is the one that not only survives the inevitable transformation, but also thrives after it. Only then can you experience transformation not as disruption, but as ongoing opportunity that leads to lasting success.

About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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