CTO vs CEO–Who Is Responsible For Business Growth?

by | Aug 1, 2022

Although both positions, CEO OR CTO, have different characteristics and job responsibilities, it is necessary for them to work closely to achieve the correct result. It is in their hands to grow and prosper an organization. 

However, there are some boundaries of their responsibilities in any tech company. So, the question arises once again: What are the differences between CEOs and CTOs? Simply put, companies hire CTO services to oversee the organization’s technical staff, whereas a CEO supervises the overall operations of the company.

The C-Suite consist of crucial executive leaders behind every successful corporation or business. These executives take decisive decisions which affect a company’s marketability and can affect its performance in varying sectors. 

The critical job of the CEO–chief executive officer & CTO–chief technology officer is basically related to designing strategies and norms for the betterment of the business growth. But still, some questions confuse understanding the key differences such as;

  • How does one manage a business? 
  • Is there a difference between their education and skills? 
  • How does their role differ from each other? 
  • How to hire one? 

Let’s go into these topics for a better understanding CEO and CTO

What Is a Chief Technology Officer (CTO)?

A CTO is a technical head who monitors the technical aspects of a company and ensures all hardware systems, applications, and networks can help achieve the company’s vision with an innovative technology strategy.

cto vs ceo

This group of executives focuses on the acquisition, development, and operation of all technology products and looks over the employees’ responsibilities for its direct management.

Organizations hire CTO as a service for coordinating technology development for employees and customer management of IT operations to ensure technologies match company goals.

Read More About: Detailed Guide on Fractional CTO

What Is a Chief Executive Officer (CEO)?

The highest-ranking executive in a corporation is the chief executive officer (CEO). In general, a chief executive officer’s principal duties include making critical corporate decisions. Moreover, overseeing a company’s comprehensive and entire operations and financial resources and serving as the primary conduit for information between the board members and functional departments. 

cto vs ceo

The chief executive officer (CEO) represents the business in public with its successful management. The board and the company’s shareholders are responsible for hiring the CEOs. Moreover, the CEO and chief operating officer are answerable to the director and chairpersons.

CEO vs CTO—Roles and Responsibilities

The CEO must perform their duties efficiently to increase corporate strategy for better business performance. It is done under challenging conditions and even under extreme pressure with the help of other executives, such as the chief operating officer. Whereas organizations hire CTO consulting services for business growth, to get maximum profit and reputation. 

Let’s look at the roles and responsibilities of the CTO and CEO separately;

1- CTO – Technology Leaders

  1. To ensure that the company’s strategy is in line with its commercial objectives, CTO develops the technical parts of it
  2. Discovers and uses cutting-edge technologies to your advantage
  3. Facilitates departments’ profitable utilization of technology
  4. Monitors system infrastructure to guarantee performance and effectiveness
  5. Creates processes for quality control and data protection.
  6. KPIs and IT spending are tracked to evaluate the technical performance
  7. Utilizes stakeholder feedback to inform essential technological advancements and modifications
  8. Shares your technology plan with investors and partners.
cto vs ceo

2- CEO

  1. Creates effective business strategies and plans, making sure they are in line with short- and long-term goals.
  2. CEO is considered to be the most senior officer in terms of designations. CEO leads and inspires others to increase employee engagement and create a top-performing management team.
  3. Maintains control over all operations and company endeavors. This is done to guarantee they yield the required outcomes and adhere to the overall strategy and purpose.
  4. Makes wise investment choices to progress the company and boost profitability.
  5. Maintains the company’s legality and business ethics by enforcing compliance with internal regulations and legal requirements.
  6. To come up with remedies or changes, it examines the financial and non-financial reports.
  7. Creates trusting relationships with major stakeholders and partners, and serves as a point of contact for significant shareholders.
  8. To ensure the survival and expansion of the business analyzes troubling scenarios and occurrences and offer solutions in the right direction.
  9. Upholds a thorough understanding of the company’s business goals, markets, and sector

Read More About: Reasons Why You Should Hire a Part-Time CTO

Knowledge and Skills Requirements For CTO or CEO

CTO

  • Certified experience as a CTO or comparable leadership role
  • Understanding technology trends to develop a strategy
  • Recognizing business planning and finances
  • The capacity to perform technological research and analysis
  • Superior communication abilities
  • Possessing organizational and leadership skills
  • Strategically minded
  • Possibility of solving issues

CEO

  • Experience in managing others in a managerial capacity or as a CEO experience in creating profitable approaches and carrying out a company vision
  • Strong command of corporate finance and the fundamentals of performance management
  • Knowledge of a variety of company operations, including marketing, public relations, finance, etc.
  • Comprehensive understanding of corporate governance and best practices for general management
  • A spirit of entrepreneurship combined with exceptional management and leadership abilities
  • Capabilities in analysis and problem-solving
  • Excellent public communication and presentation abilities

Qualification of a CEO and CTO

For almost all employers, both jobs require bachelor’s or master’s degrees for eligibility. The CEO needs business expertise, so many of them are studying business administration or business management. Depending upon how well-trained the person is in the business field, they can get a degree from any university in any subject. For example, CEOs in pharma companies can study nursing alongside business classes. 

Many CTOs have degrees in information technology.  A CTO position usually starts with a bachelor’s in computer science or information technology, such as software development and security, management information systems, and information technologies. Although most companies require doctoral degrees in IT, pursuing your knowledge helps to demonstrate your expertise to prospective employers. 

Read More About: Key Benefits Of Software Engineer That You Should Know

CTO vs CEO – Strategy Design

Business strategy refers primarily to setting company goals and the ways in which a leader plans to accomplish these goals. The CTO and CEO determine their strategy but are sometimes closely related. CEOs choose the long-term system of their business. Often the company may use outsourcing to help reduce operating expenses. Organizations hire CTO advisory services to get appropriate planning and deployment of an IT strategy that includes reducing storage and IT operational costs. When planning a system, the executives can work together to determine a possible approach.

CEO vs CTO—Salary and Job Outlook

Recruiting managers’ salaries vary depending on location, company size, industry experience, and company culture. Professionals in this role can earn much more in a large technology company or a smaller publisher. The average annual salary for a CTO is $144,889, and the average yearly wages for the CEO according to June 2022 results are $601,764 and $1,025,744.

Performance Metrics

KPIs for a CEO

Managing directors evaluate performance differently from staff and managers in general. However, specific parameters can continuously be monitored for a particular organization. The timeframe to conduct a report should have an acceptable duration, e.g. 12 months or longer. This will help create an efficient assessment system.

KPIs for CTO

Technical skill is their main strength. However, as a leader, the chief technology officer’s performance is evaluated with other constraints. For evaluating CTOs, the review must cover a period of time. It must include all the responsibilities of the executive leaders. 

Read More About: A Complete Guide on How to Build an MVP

How Can a CEO and CTO Relationship Work?

In simple terms, a CEO manages a company, whereas a CTO oversees the technical team. Clients and staff in every organization search eagerly for the relationship between CTO and CEO because both roles carry a lot of responsibility. 

Let’s discuss two scenarios that describe their relationship bond and boundaries in any organization for smooth working.

1. Internal and External Technology Environment Satisfaction of an Organization

The CTO helps every department solve a tech problem. If a company’s website is down or its servers are down, an executive should have a solution to deal with this problem. At the same time, others regard CEO as innovators. Sometimes the CTO prepares potential training sessions. This enables anyone who uses technology to its maximum. It is therefore crucial for the chief technology officer to keep up with technological developments and new products. They need to be integrated into an efficient development plan. Keep in mind that technological trends change.

2. Supportive and Healthy Working Conditions in an Organization

The company’s chief technical officer also tries to recruit and retain talented employees for its projects. The CEO screens candidates to make every hire the most appropriate decision for the business. Not only must a CTO foster a supportive work environment for everyone to stay at the firm longer. This, in turn, results in increased productivity as all people are well equipped to work on projects. The rule applies mainly to companies whose CTO manages both the development and engineering teams.

What makes CTO a Successful CEO?

 A CTO needs to be business-savvy, a leader at the organizational level, and knowledgeable about business operations to make a great CEO. However, the following qualities can make a CTO a successful CEO;

  • Tech Expertise
  • Innovative characteristics and networking skills
  • Business-oriented leadership
  • Self and professional grooming
  • Willing to take full responsibility

Read More About: How to Reduce Bugs in Software

Can you be CEO and CTO at the same time?

Many people start a business with an idea and decide they don’t want to be the CEO. They find a cofounder, and then see themselves obstructing the CEO’s suggestions for what to achieve and how to manage things. If a technical entrepreneur, pick up the necessary business knowledge, so easily can take the charge as CEO.

Within the Same Organization

  • For Large Company Setup

It’s not impossible to be a CEO and CTO at the same time. 

The CTO might be capable of handling other duties if they can create a vision for the company, motivate others to carry it out, and has a charismatic personality. Although it is uncommon, one could choose to do this; doing so could hasten the growth of an organization, particularly a startup. 

Similarly, the CEO can also serve as the CTO if they possess the technical know-how and aptitude to offer leadership and advice for managing the technical parts of work.

This is easier said than done, though. It’s challenging enough to meet the requirements of one role; meeting both of them is a huge challenge. If your company is a vast corporation, you will inevitably sacrifice one component of your function to take care of the other.

  • For Small Company Setup

On the other hand, if your business is small, you don’t need to overuse titles like “chief” to make things confusing. You’ll be allowed to use any title you choose whenever you want. Improvements will need to be made as the company grows to meet the escalating needs of the changing positions. When that happens, you can hire a CTO or assign a CEO depending on your organizational needs.

Is it a conflict of interest to serve as the CTO for another organization?

Yes, there may hypothetically be a fundamental conflict of interest.  

Everyone involved is business-savvy enough and has approved a mutually advantageous arrangement. That is basically to satisfy both firms’ criteria to operate the business together just as you would on any other organization. The difference can be huge if the contract is written properly, in detail, and with care.

Read More About: What Is an Enterprise Application? A Complete Guide

How to Hire an Expert CTO?

Many businesses employ executives to oversee various business functions and operations. In an organization, both positions are responsible for growing the company. Moreover, they help to acquire and support members to achieve business objectives. 

With ENOU’s fractional CTO service you can help your business grow intelligently. We reduce your time-to-market and increase your return on investment by helping you build the right products, at the right time, with the right resources.

Remember the following qualities before hiring a virtual CTO, fractional CTO or full-time CTO;

  1. They must be able to advise on aligning your product with your goals 
  2. Help in building scalable technology, maintaining efficiency, managing infrastructure, and building your product
  3. Help you make feasible and cost-effective business decisions

Final Thoughts 

CEOs focus their expertise on business performance and leadership. A professional often gets a CEO position because executive directors and boards think they can manage a business in an integrated manner and continually learn and adapt to industry trends. Amongst the everyday duties, a CEO consists of representing their company at meetings and conferences and determining the strategy for business development

Typically only the expert CTO possess an in-depth understanding of ways in which technology is helpful to companies in accomplishing their mission. They can analyze the hardware and software businesses use to identify problems and improve them.

FAQs

1. Does the CTO report to the CEO?

The CTO typically answers directly to the chief information officer (CIO) of a company, though they may also respond to the CEO.

2. Can a corporation have more than one CTO?

The CTO actively participates in market research and maintains ongoing communication with important clients. With many CTOs who are experienced technical specialists and whose primary responsibility is to be the bridge to consumers, several larger software businesses have employed this approach with success.

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