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CTO job description: What does a CTO do?

More than a glorified IT manager, a CTO can have real clout in an organisation

CTO plaque on desk with office chair

With businesses taking on more new technologies, the role of chief technology officer (CTO) has become almost as important as CEO. Some CTOs even enjoy a sort of celebrity level of fame, like AWS executive Werner Vogels. 

The role is about leading a company's IT departments and all its technical operations. As such, to be a CTO, you need a relatively diverse set of skills, as well as a tech-focused mindset. Speaking to the IT Pro Panel, Moonpig CTO Peter Donlon said: "Standing still will never be good enough in IT and that works for me. I always want to learn more."

Part of the job requirement is to predict what types of tech the business might need for the future, both hardware and software. This is also in addition to overseeing the current IT setup and whether it is sufficient enough to help the organisation reach its targets.

To help reach those targets, the CTO will also have to build and maintain an IT team, which will include hiring new members and or training the existing team. This requires extensive knowledge and experience to keep on top of the industry and the relevant training courses. 

Digital transformation was on the lips of every organisation long before the pandemic, but it's now one of the most important strategies for future-proofing the business. So it is understandable that CTOs find the work more critical than ever, with higher reach and a greater demand placed on them for success. 

What does a CTO do?

The CTO won't always be the head of engineering; that, in a lot of circumstances, will be the vice president of engineering. They don't have to be the best engineer or, in fact, any kind of engineer. However, they do have to have the necessary skills to communicate complicated technical goals to non-technical people and make them enthusiastic about the possibilities it can offer.

They must manage the technology an organisation uses by working with other C-suite officers to maximise an organisation's potential and take advantage of any technology that could add to a company's bottom line. An executive first and a technologist second, a CTO will look at the short-term and long-term needs of an organisation and make use of capital to make investments that will help a business achieve its objectives.

They will develop procedures and policies and exploit technology to improve products and services that centre on external customers. They will talk to customers, both internally and externally, try to understand their problems from the technology standpoint and help them understand the technology an organisation uses. They must ensure the proper balance between business and technology strategies, taking in information and distilling it into the important trends that show where a company needs to go next.

CTOs need to evangelise to inspire people inside and outside the company and drive change where necessary. They can also act as magnets for talent, pick the best candidates and foster them to become leaders in the future. They can create an environment where developers can come together to achieve ambitious goals.

Increasingly, CTOs are a driving force in an organisation's digital transformation efforts, as they are ideally placed to know how such technologies will impact employees and how they can be used to achieve business goals and modernise processes, as well as make existing workflows more efficient.

What skills does a CTO need?

Some of the key skills needed by a chief technology officer are:

  • Communication: a large part of a CTO's role involves helping less technical people understand how technology will help them achieve business goals, often at many different levels in the business. They also have to be able to communicate effectively the other way, and clearly explain business goals to more technical people.
  • Leadership: CTOs have to have outstanding leadership skills to be able to enact their strategy and convince both C-suite and management to invest in various technologies. They also have to be able to inspire the various teams they manage to work towards the company's big vision.
  • Business development: being able to work to achieve high-level business goals is an important skill for anyone in the C-suite. A good CTO will keep on top of industry trends and emerging technologies in order to help the business stay competitive.
  • Financial: the day-to-day role will require a firm grasp of complex projects and finances, as well as things like resource allocation and software licensing. Having strong financial skills will mean a CTO can effectively budget for their organisation's technology needs.
  • Technical: these skills are native to many CTOs who will have started their careers as engineers or coders. Having a good understanding of the various technologies the organisation is working with is a critical part of this role.

A CTO needs to work with the CEO on strategy and anticipate business decisions that could influence the technical direction of a company. The CTO can advise a CEO on technical bets, provide options and spell out how these options with help the organisation's overall direction.

The CTO will also work with the VP of engineering or product heads to make sure any work is aligned with the technology vision. They must champion these teams' opinions and feedback to the rest of the company.

Additionally, the CTO will support the efforts of an organisation's marketing teams and work with them to develop strategies that create communities around products.

A competent CTO will be the voice of the company, customers, and employees. Their insight can be invaluable as they can take a step back and see the bigger picture.

In terms of qualifications, many organisations will require an advanced degree such as an MBA, as the role involves a great deal of complex financial, business, and management skills.

How much are CTOs paid?

As you may imagine, being a CTO of a successful enterprise pays – a lot. How much exactly? This depends largely on the scale of the company, its location, as well as the experience of the CTO in question.

According to data from compensation software provider PayScale, a London-based CTO who is relatively new in their role can expect an average total compensation of £82,723 per year, including tips, bonuses, and overtime pay. A mid-career CTO with five to nine years of experience in the position earns an estimated £83,078.

However, after a decade into the role, a CTO can expect a significant raise. Those who had anywhere between ten and 19 years of experience had an average total compensation of £102,779, while those who had spent over two decades in the role were paid an average total compensation of £121,913.

When it comes to a CTO's base pay, data from the company review website Glassdoor estimates the average at around £101,000 a year – an £11,000 increase since April 2019. This growth suggests that the average salary could continue to grow despite the difficult economic challenges brought about by the global pandemic.

CTO is considered a stable job role that is inherent to the proper functioning of a company and, even if a CTO decides to step down for whatever reason, the compensation can be extremely high. One recent example is the last year's departure of Uber CTO Thuan Pham, who was paid an additional $5.49 million ($3.96 million) following his decision to leave the company.

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