CTO Reporting to CFO
Recently, I was talking to a colleague and friend about a pattern we’ve noticed;
in most Tech-Aided companies we’ve seen, the CTO reports to the CFO (Chief Financial Officer).
There are two types of companies:
- Companies that generate revenue directly from a tech product (like Uber, Twitch, etc.); these are Tech-First.
- Companies that already have a non-tech product and adopt technology to support or improve it; these are Tech-Aided.
Why is it that, in most Tech-Aided companies I’ve seen, the CTO reports to the CFO?
I think the reason is that these companies often see technology as a cost center, a “money pit”.
So the CFO needs to keep things under budget and tightly controlled.
Is that a bad thing?
Not necessarily.
You just need to evaluate whether you’re a good fit for that kind of environment.
Some of the challenges I’ve noticed in these companies include:
- They often don’t have a clear vision for what they want from tech.
- They may not know how to manage technical teams effectively.
- Communication tends to be top-down, like a war room, rather than collaborative.
Does it mean Tech-First companies are doing any better?
Again, not necessarily. I’ve seen plenty of Tech-First companies that struggle with the same issues, in different domains and industries.
I simply wanted to share a pattern I’ve observed. If you know of a company that doesn’t follow this pattern, I’d love to hear more about it over a coffee chat :)