How Technical Does A CEO Need To Be?
A CEO needs to understand every part and function of the business: accounting, finance, HR, marketing, legal, operations, supply chain, sales, and yes, information technology. Especially considering the dominant role technology is playing in the course of day to day business, as well as in disrupting existing businesses. How much the CEO needs to know about each area will vary by industry. Think of the CEO as a conductor of an orchestra - they need to understand how all the pieces work together and bring to together to create something that is greater than the sum of its parts. It is certainly helpful if the conductor can play more than one instrument, and very helpful if they are very familiar with every instrument, but the conductor doesn’t need to know how to play each instrument in the orchestra.
CEO’s often rely on their department heads and other senior executives to be deeper experts in their domains (chief marketing officer, chief financial officer, chief information officer, chief technology officer, etc.) but they ultimately have to weigh in and make the final decision on crucial investments and strategy.
You can get by for a while just following the advice of your CIO/CTO, but the real question becomes are those executives doing what’s right for the business as a whole, or just what’s good for their departments? Will the CIO tell you where the IT capabilities are weak? Do they choose only the benchmarks and KPI’s they know they can easily hit? Is the “next big thing” touted by the press, really “the next big thing” or another red herring?
A CEO who doesn’t “get” technology today is a liability. Every part of the business relies on technology to get their work done. Marketing is increasingly data driven. Accounting runs on software. Complicated ERP systems determine strategy and operational decisions. IoT is transforming manufacturing and supply chain. Cloud technologies are disrupting traditional IT infrastructure. AI will disrupt things further. In just a few years, something else will emerge that will disrupt and transform things again. Being human, we tend to avoid things we don’t understand. We often stay within our comfort zones and focus on our areas of understanding. This tendency in a CEO that doesn’t understand technology can be disastrous. It leads to either lack of investment in key areas, or investments in the wrong areas. Modern CEOs need to have a deeper understanding of technology and it’s impact on the business to be successful. In the last century it was the bigger fish that ate the smaller fish. In the 21st century, the faster fish are out swimming and starving out the big fish. It’s not enough to “just keep swimming” and doing what you’ve always done.