New Heavyweight In The C-Suite
In the boardroom, more and more often one finds a Chief Technology Officer sitting next to the CEO, CFO, CMO en COO. The reason for is clear. No organizational or financial expert is able to assess strategic impact of the dazzling amount of technological innovations. However, CTO's can; as they dare to choose innovations that are - sometimes - opposing mainstream thinking but are favorable to meet company goals on the longer run. “Wild ducks is what we are.”
Can a management and organization expert of a big ICT company assess whether a new party on the market has developed an interesting algorithm for research on the Big Bang? Surely not: this expert is at a loss for words. Big Bang? Algorithm? This is one bridge too far, not only for the expert in question, but for financial experts and communication specialists as well. In order to consider the abovementioned device, one needs a Chief Technology Officer.
The Chief Technology Officer is a new heavyweight in the technical labor market. “In the last couple of years new Chiefs have popped up ever more frequently” Thijs Manders mentions.
“Wild ducks is what we are.”, says Gerard Smit of IBM Benelux, referring to the rare combination of qualities a CTO possesses: a fascination with cutting-edge technology and insight in financial profit. Smit: “We screen important trends on the intersection of market, organization studies and technology and then explain them in dummy-proof language to our fellow board members. What do decisions imply? Should we make investments? Does a takeover candidate yield added value? We are supposed to say prudent things about these matters”.
In IBM Benelux’s board, next to Smit, there are the General Manager Benelux, the CMO, CFO, COO and the six business-unit managers. Smit: “It does happen that our General Manager calls me at ten at night about making a quick decision. Then I put together a research team to evaluate whether a technical solution is feasible or whether a financial matter is profitable.
When Smit mentions the developments about which decisions have to be made, we understand at once why his fellow board members feel slightly anxious at times. With great joy Smit tells about the already mentioned cooperation with other parties on research about the Big Bang, sensor technology for water management, the self-learning computer named Watson (that, through dialogues with an oncologist, advises on complex cancer problems) and cognitive computing with neuron chips for self-learning computers. Smits says: “Those chips have 256 neurons (processors), 256 axioms (memory) and 64,000 synapses (connections). They are the brainchild of neuroscience, nanotechnology and supercomputing. Computers are starting to learn, think and act like human beings. We invest a lot of money in it, but our General Manager likes to leave the weighing of pros and cons to us, technicians.”
An important advising role
A wild duck dares to take unorthodox steps. The same goes for CTOs. Smit frequently introduces partners from unexpected places. He says: “A market party had developed a fan with an air stream that was compressed in such a way that the amount of DBs could decrease by 25 per cent, whilst energy was saved and the cooling capacity increased. Up till then this technology was only used for fridges, but is also very suitable for computers. A board member would never have come up with an idea like that”.
A similar story was told to us at Vanderlande Industries, a specialist in automated systems for luggage handling and the sorting of packages in distribution centres. At Vanderlande, Vincent Kwaks is CTO. From strategic, tactical and operational perspectives, Kwaks keeps a close eye on developments on the market. He plays an ‘initiating and strongly felt advising role’ in Vanderlande’s Innovation Roadmap. He is the man when it comes to technical content. He also makes decisions about the question whether strategic knowledge should be hired ‘in the house’ or rather be contracted out.
Kwaks: “In view of our business model Vanderlande must be innovative. As a CTO, I consequently have to think outside-of-the-box. Cradle to cradle (i.e. the recycling and rendering biodegradable of machines and waste material) is an important development to us. Through Michael Baumgart we met new partners and got acquainted with brand new techniques. We connect the latter to the newest trends in our own fields, like vision technology, mechatronics, real-time controlling, energy technique and material science. If we do this in the right way, we have an added value for customers like Plus, Zalando, Amazon and Nike. By purchasing a Vanderlande system, they increase their return more than by putting their money in the bank.
Directing and pushing
The CTO’s voice is also heard in the SimGas boardroom. SimGas is a design and production company for affordable basic amenities (like energy and sanitation) for consumers in Africa and Asia. The SimGas management team consists of a CEO, a business developer and a CTO called Chandler Hatton. She directs the product strategy and stimulates product development. Hatton: “My R&D team is involved from the first drafts all the way up to our production lines in Tanzania and Kenia. We wish to become market leader in Africa and Asia. In order to accomplish this, I make decisions about strategic investments in product development and joint ventures with strong partners”.
Biogas has special qualities. It ensures a strong decrease in diseases and death rates among women and children caused by indoor air pollution. Cooking on biogas instead of wood makes sure that kitchens stay clean and soot-free. On top of that, the use of biogas counters deforestation and desertification.
By innovating extremely, SimGas makes this sustainable technology attainable for large groups of people. The systems must be suitable to be build up in three days’ time (instead of three weeks), they must be light-weight (150 kilos of recycled synthetic material instead of 12,000 kilos of concrete and bricks), it must be possible to produce them in large quantities and they must be so cheap that households in the mentioned regions can afford one.
With the help of her R&D team, Hattons estimates which are the most promising developments. Hatton says: “Good R&D costs much less than bringing an average product on the market. Our R&D routes emanate from a close cooperation with the business developers and the operations team. The interaction between product development in The Netherlands and the implementation in East-Africa requires short communication lines and flexible work processes. Only then a technologically innovative concept can become a product that is ready to be brought on the market”.
Seeing right through it
The CTO keeps track of trends, which has its pros and cons. A multinational like IBM receives many ‘break-through’, ‘cutting-edge’ ideas from creative people and fortune hunters. The most promising of these are tested and, sometimes, one sees right through its downside. Gerard Smit gives a nice example: “Some months ago, I was contacted about a compression machine that could be improved a million times. We tested it in our research centre in Zurich. It turned out to be an urban legend.”
Kwaks of Vanderlande is also frequently put on the spot. This means: testing. As an example, Kwaks mentions RFID technology: “This development has affected our field for thirty years now. It is a great technique for labeling and tracing products. We have started with this a couple of times and then given up on it again. The last time we did this was not so long ago, after a test on airports. We established that the number of airports that wished to continue with it, was limited. Besides, one of our partners already had the required knowledge. So then I said: Let’s not go there”.