The Changing Role of the Chief Technical Officer

In the early 1970s we were hired by a major natural resources company to find a Senior Vice President/Chief Technical Officer (CTO) for what was to be the "Bell Labs of the West." The requirements were typical for that era: a Ph.D. in some aspect of science or engineering who had developed a superior technical reputation and was well-known in the scientific community. In fact, the emphasis was on recruiting someone from academia who could bring instant technical credibility and help attract world-class scientists and engineers to the new laboratory.

This type of individual, if he/she had worked in industry, usually spent the early part of his/her career in a scientific capacity generating large numbers of publications and/or patents, eventually being promoted to Group Leader, Manager and ultimately Director, almost certainly within a corporate research and development environment. This was considered the management route for technical people, the alternative being to remain within a corporate research environment on the "scientific ladder" where an individual started as a Research Scientist, became a Senior Research Scientist then perhaps a Research Associate, Senior Research Associate, Scientific Fellow and ultimately Senior Scientific Fellow. We were also considering people in this latter category.

The search was successfully completed with one of the most famous chemists in the world, an individual who was fairly late in his career and was the head of the Chemistry Department at Columbia University. He was well-known in gas-phase kinetics, an aspect of chemistry with little practical, industrial application. However, this individual, throughout his long career in academia, had trained many students, written hundreds of scientific articles and published several books. His hiring was hailed a tremendous coup even though he had never worked one day in industry and had never supervised more than a group of graduate students. He was brought in as a Senior Vice President of a company with sales of over $5 billion to lead a corporate technology center with approximately 450 scientists, engineers and technicians. This was a stand-alone laboratory, hundreds of miles from any operating units, sales offices, plants, or other business-oriented functions.

In those days corporate research and development laboratories were not really thought of as integral components of an operating company. The charter of the laboratory was in many cases to do good science, publish papers and perhaps discover something that could be translated into a futuristic new product or process.

I recall two additional incidents while interviewing technical people during that period some 20 years ago. In the mid-1970s, I talked with an individual who was working at U.S. Steel's large applied research laboratory in the Pittsburgh area. At that point, U.S. Steel was the major steel company in the world and had, in fact, a more fundamental research laboratory even more isolated from the business of the company. The individual I met had been with U.S. Steel for ten years and had a Ph.D. in Metallurgy from Massachusetts Institute of Technology. He was in a group of eight people, all Ph.D.s, working on flat-rolled products. They were making steel sheet to be used in practical applications such as automotive bodies, major appliances, etc. The objective was to make steel sheet with no cracks or impurities within tight specifications.

During the course of the interview, the candidate told me that although he had been with U.S. Steel for ten years, he had never been in a steel mill in his life. He had no contact with sales or marketing and in fact had no contact with operations or manufacturing.

The second incident concerns a scientist I interviewed who was working for Exxon's corporate laboratory in New Jersey. During that period, Exxon was hiring brilliant scientists without much regard for their relevant technical expertise. The prevailing concept was that if you put a group of highly-trained scientists and engineers with superior intelligence in a room, sooner or later something wonderful would happen. There were no formal reporting relationships and scientists were left almost entirely on their own to do whatever they wanted.

The individual I interviewed had decided to make a job change because of a review by his laboratory manager he had just received. The scientist had not written a formal report in two years and his laboratory manager questioned what it was that he was doing. The scientist felt this was an inappropriate question, that the company had no right to ask him what he was doing since the goal when he was hired was to pursue science for the sake of science and that ultimately, perhaps someone else would take advantage of his research. He further added that he was somewhat concerned with the profit-oriented mode of his employer and decided that he did not want to work for an organization interested in making money.

I remember thinking at the time that if the CEO of Exxon had had an opportunity to meet this individual, who was highly paid, he would probably have become physically ill. The bottom line is that none of these things would happen today. Scientists and engineers are now part of cross-functional teams working with sales, marketing, operations and financial people to develop new and improved products and/or processes in addition to raising the core technical competencies of their companies.

The CTO role has changed from running the laboratories to advising the CEO on all issues relating to technology. In fact, while the breakdown varies from company to company, in many cases approximately ten percent of the CTO's time involves the line responsibilities associated with supervising the company's technical organizations, and the other 90 percent concerns all technical issues relating to "are we getting the bite for our buck" with regard to technology.

Therefore, very different criteria are required in recruiting a Chief Technical Officer today. He/she must be a business person with strong strategic/conceptual skills that can bridge the gap between the scientists and engineers and all of the business functions of the company.

The number one characteristic that companies are looking for in a CTO is leadership ability. A leader is generally an individual who can define a direction, facilitate change, inspire teamwork and make decisions quickly. He/she usually has a take-charge personality with a strong work ethic.

The modern day CTO should also have strong academic credentials, a broad interdisciplinary background and a solid record of technical accomplishments early in his/her career. This could be evidenced by publications and/or patents but more commonly is associated with success in commercialization of new products or processes.

More and more we see requirements for CTOs with experience in operations and/or general management somewhere earlier in their careers. Being able to understand the perspective of the operating management of a strategic business unit is considered a major advantage. In addition, as companies become more global some international experience, particularly in Asia, is becoming a valuable asset.

Since the CTO serves as the technology advisor to the CEO, he/she most likely will become involved with acquisitions, strategic partnerships, joint ventures and other industrial, government or academic alliances. Experience in this arena is also desirable. The CTO at many companies has become a senior member of the management team, and should also have the attributes sought for general management. These include a strategic/conceptual orientation, excellent verbal and written communication skills, sound judgment, high energy, flexibility, motivational and empowerment skills, and total dedication.

We recently completed a search for a Chief Technical Officer for a company in the electronic materials industry. Two finalist candidates emerged, both with outstanding records, yet they were on completely different ends of the spectrum. Candidate A had a wonderful scientific background both in academia and industry having published approximately 200 technical articles and several books. His hiring would bring instant technical credibility to the organization, raise morale among the incumbent scientists and engineers and help in recruiting.

Candidate B had an outstanding record of accomplishment in commercialization of both products and processes in an industry of great sophistication, that was, however, not as technically relevant to our client's business as that of Candidate A. In fact, as a scientist Candidate B was completely unknown to our client's employees. However, he had great expertise in the process of product development. He was working in a "world class" organization with an extremely strong background in new product commercialization. His expertise as a technical leader was in "increasing the hit rate," i.e. maximizing the percentage of research projects that ultimately become commercial successes. In addition, he had a strong record of reducing cycle time. He was able to point to very specific examples where project teams within his organization had dramatically reduced the time from idea conception to commercial product introduction. He was also a visionary with an international orientation who had spent considerable time in customer interaction.

In the 1970s, the decision as to who to hire would have been a no brainer. Today things are different.

Over the past few years we have conducted searches for the new generation of CTOs for companies ranging from start-up to major Fortune 500. These have covered a wide range of industries including biotechnology, pharmaceuticals, advanced materials, electronics, aerospace, chemicals, petroleum and consumer products. Although specific responsibilities and qualifications desired vary to a certain extent, there are many similarities. This is a summary of the "wish list" that guides us in seeking out today's most desirable and impactful CTOs:

· Strong leadership characteristics
· A broad interdisciplinary, technical background
· Operations, marketing and/or general management experience
· An international assignment
· A strategic/conceptual orientation
· Experience evaluating and negotiating partnerships, joint ventures, acquisitions
· Superior communication skills
· A persuasive personality

It's exciting to observe our candidates in their new positions as they help move their companies forward by combining technical and business acumen to turn technological opportunities into commercial successes.

Reprinted with permission from Hunt-Scanlon.