The growing importance of an executive with technology savvy

In today’s business climate, every company’s strategy is anchored around technology. To maintain a competitive edge is to prioritise innovation, and in most instances that translates to some sort of technology.

Inside every boardroom, the dialogue is about differentiation, adaptation or innovation. There are endless ideas being tabled, most of which rely on technology as the enabler. Digital transformation usually means crossing vertical product lines or introducing entirely new customer-facing products, all made possible with modern tech.

After the excitement of the green light, these projects are then too quickly delegated out to engineering teams or are outsourced to vendors. Due to the misconception that executives don’t need to understand technology in detail, projects are distributed without them staying closely–enough connected to the subsequent execution. The ideology that the engineering teams “know what I want” puts these projects on a course to disaster. There are important decisions to be made, and many options to explore which require executive and business insight – these are not just “details”.

Below are a few reasons why tech competency and understanding are critical at that highest decision-making levels.

1. Internal decision-making relies on tech knowledge
Executive teams with only business knowledge won‘t be able to evaluate the engineering requirements of a project idea.

Without technology insights within management, it’s not possible to short-circuit product or project ideas. Technical insight allows us to identify obvious low-effort solutions that could avoid costly engineering involvement altogether or upfront.

Explaining the problem properly gets a better solution. If you understand the technology, you can explain the problem and expectations better. This closes the understanding gap, sets a coherent project path and saves a lot of time.

These decisions cannot come from lower- or mid-level management, such as technology or team leads, because they still lack holistic context into business, history, strategy or product.

2. There is a natural trust boundary between the business and a vendor
In any project with a technology partner, there is an implicit and unavoidable trust boundary present due to the existence of a commercial engagement. This boundary can create friction when the business doesn’t understand what the vendor is doing, and rely entirely on decisions and advice exclusively from the “other side” of that boundary.

This is entirely solved with an inherently-trusted internal party to sense-check, validate or oppose vendor views using business context and constraints. Critical or impactful technical decisions must be made on an informed, collective basis.

Without a fairly detailed level of knowledge and background into technology teams’ work, the business can’t keep them honest or have constructive conversations if something breaks down. When executive teams and vendors can interrogate each other’s decisions, it creates confidence and builds more robust trust in the relationship.

3. Vendors work better with executive teams with the relevant insights
With any technological partnership, vendors will need to work alongside a tech representative at executive level. Someone who has the relevant history, context and technology of the business.

It’s negligent to leave teams to run projects on their own without internal expertise and guidance, and they would never be able to gain this context on their own. Even with the best of intentions, in the absence of that context, the team cannot help but make short-sighted decisions. In these instances, engineering teams can easily go off on the wrong path, building solutions that aren’t in line with the business strategy.

Ultimately, executive teams need to have widespread knowledge that covers all areas of the business, which now includes technology. To draw a comparison, none of us would opt to outsource all finance and accounting responsibilities to an external service provider without deep internal understanding of what they are doing. Specifically, the ability to critique their work at both input and output levels. We would absolutely have a finance executive with the relevant financial knowledge to oversee and interrogate their work.

The same applies to technology and we need to stop seeing this differently. Execs don’t all need to be technology experts, but every executive team must have a representative who holds enough experience, skill and context to steer engineering teams in the right direction.