The right person (CTO or CPO) for the job could be someone else…

How to keep strategy and skills aligned.

To get right to the point; there is no simple way to tell if you have the right Chief Product Officer (CPO) or Chief Technology Officer (CTO) on board to meet your value creation plan. A systematic analysis of your company’s context and leadership, will provide you with the insights you need. Only too often, the judgement of Product and Tech leadership is based on gut feeling; “I had a strategy session and a great dinner with that person and trust they can do the job”. So it’s about time to introduce more ‘science’ and less ‘art’ to the “people domain” and hiring decisions. 

How it all started

Let’s take a step back before diving into that systematic analysis. The founding team of most tech companies these days consists of a CEO and CTO. Over the last ten years the Product function at startups and scaleups has become more and more dominant with the CPO now being the hottest job title at Tech companies.

Finding your next CPO or CTO, or assessing whether you have the right one in the team – for a new investment or within your portfolio – is a hefty challenge and one that is hard to quantify. Especially in Tech, where triple digit growth rates are quite common. And also because moving through different stages of (hyper)growth requires different types of leadership. In addition to that, the pure focus on indefinite growth (up to 2021/2022) has shifted to a more down to earth focus on profit and extending your runway.

The impact of leadership

For us to understand the impact of leadership on a company’s success, it is important to take note of the research from Bain & Company. Their article – a left-brained approach to talent decisions – states that the biggest driver of success (71%) is the calibre of the Management Team. Likewise, the lack of necessary skills within the Management Team, is the second biggest driver for failure (64%). 

And where knowledge about General and Commercial Management positions is often well at hand, knowing how to assess Product and Tech leadership seems to be much harder. Many problems with scaling a tech company originate from where it all starts; its leadership. 

To illustrate: Imagine a tech company where the two founders – CEO and CTO (the traditional set up) – are still active in the company. They have been growing at a fast pace and moved into the scale-up phase a year ago. While their international ambitions got bigger, the speed of delivery of their products went down. There is way too much customization for clients and a lot of friction between the Product team and the Tech team. 
Product is complaining about an unstable and unpredictable roadmap. Because management (sales) is constantly throwing in new feature requests, the product team has become more of a project team than autonomous Product Managers.  The tech team, on the other hand, is complaining about lack of focus and about the lead time available to build high quality products. Also about Product not reckoning with the performance or security of the products. Some efforts to improve collaboration have been made but so far unsuccessful.

In this case, product development maturity seems the obvious problem whereas it’s not. Further investigation is necessary from the top down to understand how the current product development practice came to be. So you need to pin down what the impact of the driving forces within the company are. Often, change should start at the top.

Another example is where a tech company recently raised a second round of money and is now ready to move into the “hyper” growth stage. A big chunk of its funding is used to grow the tech and product teams, aiming to add new products and services and being able to internationally deploy and roll out quickly. Both a new CTO and CPO were hired. The tech team expanded from 20 to 100 people and the product team from 3 to 10 Product Managers. A middle management layer has been put in place, in order to manage the teams. Although the output of the team has grown, it is not at all in line with the extra investments and costs let alone expectations.

Growing the team and adding new hierarchical layers, asks for many transformations: new processes, ways of working, collaboration and deliberation, KPI’s and letting go of the old and familiar practices.

Both hiring a new CPO and CTO at the same time, might seem the right thing to do, but with a big transformation on almost every aspect, it might cause too much stakeholder management, decision meetings, mis alignment and thus slowing down of speed and less output than wanted. If you want to scale up that fast, it might be easier to have just one person as a CPTO, instead of hiring two separate positions.

Putting all this into perspective

After interviewing 15+ CEOs, CPOs, CPTOs and CTOs or VCs, we found that having (or getting) the right leadership on board completely depends on the growth phase of the company, the maturity of Product and Tech, the present leadership team, the team and other factors as shown by the model below.

Based on the interviews and additional research, we have created an outline with the five most important topics and the questions needed to be answered in order to assess the most vital capabilities and requirements for successful leadership. The result of this analysis will give you a more objective view on the Product & Tech leadership that you currently have or need in the future.. 

This systematic analysis takes some serious effort. It’s a combination of knowledge, understanding the context of the company and its leadership and knowing how to ask the right questions^*1. It provides insights that one can quantify and both current leadership as well as future candidates can be judged in the light of it. Thus making a search much more objective instead of subjective (gut feel), especially in the people domain. It leads up to a combination of science and art, both the left and the right side of the brain.

Many thanks to all people who have shed their lights on the context of Product and Tech leadership: Jeroen Jonker Roelants, Dimitra Retsina, Marieke Saeij, Niek van Leeuwen, Jim Banister, Adrian McPhee, Quintin Schevernels, Auke van den Hout, Jasper van Tongeren, Kris Boon, Sohrab Hosseini, Daniel Gebler, David Vismans, Andre Woons, Serge van Steensel and Maurits Koning.

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Do you want to know if your CPO/CTO is adequately equipped to meet business goals? Do you have questions about the right setup for your start-up or scale-up? Or would you like to hire a CTO, CPTO or CPO? Then contact Werner Spronk at 06 144 24 436 or werner.spronk@newpeople.nl.

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^*1 Examples of these questions are:

• Is Tech a driver or enabler of your business?
• What are the driving forces within your company? What is their individual experience, management style, archetypes, et cetera?
• Is your leadership fit to meet your value creation plan? If not, what skills need to be trained/coached or hired?
• What is the balance between Product, Tech and Business?
• What growth phase are you in? And on which parameters do you base this?
• How do you do product based budgeting?
• Do you have the same goals, KPI’s and mental model?