Measuring the performance of a CTO can be a tricky process, and every company has a different way of doing it.
A lot of companies don’t use the full list from below — if you are a CTO or a CEO — I’d encourage you to look at this list and compare it to the way you measure performance for your CTO:
1. Technical leadership:
✓ their participation in technical decisions,
✓ their contribution to product development, and
✓ the technical skills and delivery of their team.
Measured through the development of:
✓ new and more productive ways of doing things (could be new engineering processes)
✓ new products (if they also hold a CPO hat as is sometimes the case)
✓ new applications for old products (perhaps slightly modified) (if they also hold a CPO hat as is sometimes the case)
✓ new markets for the same products (if they also hold a CPO hat as is sometimes the case)
✓ new patents, or
✓ other intellectual property.
3. Business impact:
Measured through metrics such as:
✓ revenue growth,
✓ customer satisfaction (including customer loss due to poor product experience due to bugs/tech issues)
✓ market share.
In my experience most companies don’t really do this one (including some corporations!).
If they did, more CTOs would realise that they don’t think about the business impact in their engineering decisions as often as we might assume.
E.g. In my experience often CTOs don’t think of using customer loss as a business case for building in time for tech debt.
Most CTOs I’ve met also don’t think about customer acquisition and how this is impacted by engineering.
4. Team management:
✓ employee engagement,
✓ turnover rates,
✓ the overall culture of the engineering team.
5. Technical excellence:
✓ the adoption of new technologies,
✓ the development of technical talent,
✓ the implementation of best practices.
6. Strategic planning:
The ability of a CTO to develop and execute a technology strategy that aligns with the company’s business goals can be measured through:
✓ the successful delivery of products and projects
✓ their ability to consistently take into account business impact in their technical (direction) decisions.
7. Industry recognition:
The industry recognition and reputation of a CTO can also be a measure of their performance.
but I wouldn’t get too hung up on this one as it can be a popularity contest.
They might be a top geek in your technological area, but if they shy away from public speaking, they won’t be invited or known about except in some very specialised circles.
What would you add or remove from this list?
How many of these do you use for measuring the performance of your CTO?