Archive for March, 2012

How to practically guarantee an offer to become the new CTO

March 29, 2012 1 comment

Highly admired, rapidly growing technology company has been searching for a new CTO who would play a critical role in the company’s next growth cycle.

You – the reader – were selected as one of the top 10 candidates and later as one of the two final candidates.   However, the company decided to hire the other candidate.  Why?  The truth is – you will never know.   But with hopes to help anyone being considered for a senior technology leadership position, I wanted to provide more visibility about the reasons why a seemingly terrific candidate ultimately did not receive an offer.

The top 3 reasons why the offer has not been extended to you:

1.  You did not ask the right questions, in the right sequence.

2.  You did not explain correctly what you would doing next Monday in your new role as a CTO

3.  You did not exhibit enough evidence of being able to quickly win the respect of both technology organization and other executive peers.

You did not ask the right questions, in the right sequence.

The job of any CTO in a software company is not to manage technology but to ensure that technology strategy supports the economic goals of a business, or 100% alignment between different phases of growth and how technology must evolve to support each phase of growth, while thoughtfully recognizing that some key initiatives must be sponsored and financed well in advance.

You must learn as much as possible about the company’s business during the interview process – in the right sequence.

First – learn about the company from the CEO (not an exhaustive list):  roots, key evolution milestones leading to the present, broad market conditions, major competitors (VP of Sales will provide more details), capital structure, investor profiles, investor goals, and resulting financial targets as well as time constraints.   It may or may not be possible to grow revenues 200% in 3 years.   These matters will have a significant impact on you as a CTO.

Second – ask to speak with the CFO.   That’s right – the CFO.   He / she will share with you how the company’s strategic plans are translated into operational plans and budgets which include all other organizations.   Is there a history of underinvestment in the technology organization and product engineering?   What’s the budget history of the technology organization during the last 3-4 years?    Are you walking into an organization where you may not have the right budget to ensure the success of the product development goals?  Or – the organization is mature enough to have a meaningful discussion and agree with you (hopefully the very leader being sought), even at the price of reducing investment in other areas?

Third – speak to VP of HR.   Learn about the state of technology organization / ask for the organizational chart.  Compensation – is it competitive?  Are there any open requisitions?   Imagine a growing organization where a principal level engineer role has been open for 6 months.   Why couldn’t the right person be hired?    Start making notes.   Can you have a meaningful conversation with VP of HR if the compensation structure in the technology organization you are about to inherit and lead is inadequate and about to trigger significant attrition?

Fourth – speak with VP of Sales.    What are we selling?   How?   Are the customers happy?  If not – what are the reasons?   Is there a detailed win-loss analysis process?   Can you get a copy of the latest report?

Fifth – speak with VP of Marketing and Product Management.   Is the requirements management process rigorous?   Are the requirements collected from all the channels:   customers, competitive intelligence sources, professional services?   How are the requirements managed:  documents or requirements management system?  When was the last time the product roadmap was changed?   What were the reasons?   How did the organization respond to some critical features being delayed instead of accelerated?   Ask for the product roadmap presentation.

Sixth – speak with VP of Professional Services to validate the state of the customer.   Is the customer community satisfied?   What is the typical deployment process:  duration, complexity?   How can the product be improved to reduce the complexity of the customer deployment process?

By this point, you have demonstrated 2 items the executive team is looking for:

– Ability to learn about the business from key executive peers (something you will have to do anyway but the key is to demonstrate this competency during the interview process)
–  Ability to extract key insights which will allow you to begin thinking about aligning the goals of the technology organization with the goals of the company

You did not explain correctly what you would doing next Monday in your new role as a CTO

If someone interviewing you asks, “what would you do during the first 90 days”, chances are your value as a candidate has already eroded.   Do not wait until this question is asked.

Find the right moment to mention that you are already thinking about the plan.   But before proposing the plan, you need to learn a lot about the business, your own organization, as well as every other organization that are critical to your success.

What every CEO is looking for in a new CTO when the CTO discusses the 90-day plan:

– 0 – 30 days:  make no changes in the technology organization.   Engage every employee.  Listen & take notes.   Resist every temptation to make significant changes.   Focus on creating a culture of transparency and accountability.   Team superstars will respect you from day one.  Underperforms will realize that the time for a new job search has arrived.

– 31 – 60 days:   become a silent participant in all other meetings.   Attend sales pipeline reviews.   Attend customer account planning calls.   Learn the pain points in every other organization that may be addressed later by adjusting the product roadmap or simply correcting product functionality.   Win the respect of your executive peers by sharing their daily challenges.

– 61 – 90 days:   Invest time in creating a very clinical perspective on what you learned.   Present it to the executive team.   They may not even realize certain issues or opportunities exist.   Then begin working on a plan to meet current operational goals while introducing methodical changes to position the company for growth.   Present it to your own organization.   Do not hold back any information.   Your commitment to transparency and clear goals will be the reason why everyone will accept you as the new leader.

You did not exhibit enough evidence of being able to quickly win the respect of both technology organization and other executive peers

The best part about item 3:   if you have done well with items 1 and 2, this one becomes a non event.  You have already demonstrated your ability to win the respect of everyone you will be closely working with.

If you act as a CTO while being interviewed for a CTO role, the offer to become the new CTO will be practically guaranteed.



5 mistakes growing companies make when hiring a CTO (the results could be fatal)

The examples of hiring the right person for the job – outside of the software business – are everywhere.

– Passengers on a Boeing 737-800 know that the pilot in command has been properly trained to fly this aircraft
– Passengers on an Airbus A320 know the same
– The country or state where you reside asked you to pass a driver license exam in order to drive

Yet growing technology companies make mistakes – often fatal mistakes – when hiring a CTO, in this case someone who will play a leading, critical role in formulating a technology strategy (with a plan to deliver of course) in growing the business.

Mistake 1:  Failure to ask the right questions and assess how you – as a company – arrived at the present moment in time

“There is a reason why today is meaningless and meaningful at the same time.  Meaningless – because today is simply an outcome of everything we have done yesterday.   Meaningful – because everything we do today will influence tomorrow.”

– Are you a company that has evolved via acquisitions or organic growth?   How would you rate yourself against the industry and closest competitors?
– Who is your competition?  How well do you know your competitors and their technology leadership team?    Will your new CTO be as capable as their CTOs?
– What is your growth strategy?  Is there an organizational strategy to support the growth strategy?
– What is the true state of the product?  Zero technical debt or lots of technical debt?
– Is there tension between members of the executive team?   There is always some healthy tension.  But – is there a fundamental misalignment between the strategic agenda and the ability to execute?  Would the new CTO simply add to the tension and – despite their best efforts – fail early?

Mistake 2:  Failure to create a clinical competency matrix which clearly defines who we want as the new CTO

Yes – the competency matrix has to be clinical (or “binary clear”).

Imagine the following scenario.   The new CTO joins the company and quickly notices that the sales team is actually very average.   What’s the point of building a fantastic product if the sales team cannot sell it?   Removing the constraints of organizational boundaries, what is the right thing to do?   Will the new CTO have the organizational courage and maturity to engage and help the sales team sell?  And if this approach does not work, approach the CEO and explain the problem?

That’s why Mistake 1 above is the one that almost always leads to a fatal outcome.   Growing companies that do not know themselves – or fail to learn about themselves – have very little chance of successfully hiring the right CTO.   Unless the company knows itself, it cannot create the very matrix which will define the right CTO against which the candidates will be compared during the search efforts.

Mistake 3:   Failure to hire the right candidate vs seeking “safe” candidate

“Safe” candidates are very attractive:  do not have to relocate anyone, may be coming from the competitor (but are they capable of quantum innovation or simply able to avoid mistakes that the competitive circles already know).

The right candidate are much more difficult to identify unless the competency matrix is “binary clear”.   Once identified however, open all doors to get this person onboard.

Mistake 4:   Failure to accommodate the friction which is always associated with progress

The right candidate will cause friction.  It’s inevitable.  Progress is impossible with friction.

Does the executive team understand the strategic direction and how the newly hired CTO will help achieve the desired business outcome?  Change will be inevitable and with progress friction will arrive.   Is everyone truly ready for change and some healthy incremental friction?

Mistake 5:   Failure to support the newly hired CTO

Newly hired CTOs fail for many reasons.   One of the major reasons is failure to understand and engage their team.  I always suggest that any new CTO should spend the first 30-45 days in the trenches to understand everyone’s challenges and needs.  Only then the new CTO will have enough organizational capital to  describe the mission and inspire everyone to follow.   The second major reason why a new CTO fails is lack of support from the executive team that invested an incredible amount of time (and sometimes money) to find the right person and not the “safest” candidate for the job.  As an agent of change and progress, the new CTO will be a messenger of disappointing news in the beginning.   One of their early goals is to understand what works and does not work before suggesting a specific course of action.   Do not shoot the messenger.   If the new CTO fails, you will fail with him or her.