When to hire senior technology roles
The Chief Product Officer (CPO) position first appeared in the 2000s, in Silicon Valley’s mid and large-caps, as software products started to create significant shareholder value for the first time.
Source: CPO Rising: A seat in the C-suite, Products That Count, October 2022, https://productsthatcount.com/cpo-rising-a-seat-in-the-c-suite
© Ramiro Checchi
Do you need a CTO or a CPO?
The most senior person typically sets the strategic direction of technology development, and the strategy they choose is likely to be biased towards their area of responsibility instead of what is best for investors.
The role of Chief Product Officer is to identify market opportunities and design new products to exploit them. CTOs are responsible for driving innovation and optimising all technology, whether proprietary or third-party. So who should set the strategic direction?
Essentially there are two types of technology strategy: invest capital to develop something new, or operate to conserve free cash flow. Which strategy is appropriate depends on product maturity and scale of operations.
When the product portfolio is immature, development is required to increase product-market-fit and so the strategic leadership of Product Management typically provides better ROI. Conversely, when operating mature products at scale, the technology strategies of the CTO office are likely to deliver better returns.
The scale of operations is also a factor in the seniority of roles. Product or Technology CxOs are seldom required if the scale of operations is relatively small (a Head of Product and a Head of Engineering often perform better, at much lower cost).