Digitisation is changing the skills profile of executives leading successful modern organisations. Whereas finance and accounting skills dominated the C-suite in previous years, technical competence in fields like software engineering are increasingly in demand.
Seven of the world’s 10 most valuable companies – measured by market capitalisation – are in the technology sector. The volume of the world’s capital flowing into tech is symbolic of the digital era and how pervasive technology has become in modern society.
It follows then that the leaders of these companies – the likes of Microsoft’s Satya Nadella, Alphabet’s Sundar Pichai, Nvidia’s Jensen Huang, Amazon’s Andy Jassy, Meta Platforms’ Mark Zuckerberg and Tesla’s Elon Musk – all possess deep technical expertise. Any of these leaders is capable of getting deep into the technical weeds; they understand at a fundamental level the technology that is driving the IT industry forward.
Indeed, the evidence suggests that placing non-technical leaders at the helm of companies at the forefront of technology innovation does not yield the best results.
Intel is a good example: the US chip maker had a strong legacy of highly technically proficient engineers at its helm in its heyday, including Gordon Moore, Andy Grove and Craig Barrett. But Intel slipped badly under less technically grounded leaders such as Brian Krzanich and Bob Swan, and is still counting the cost of strategic mistakes made by those leaders.
The same could be said of Microsoft, which thrived under the leadership of its programmer co-founder Bill Gates, struggled in the era of the more sales-orientated Steve Ballmer, and found its feet again when Nadella – another “geek” – took the reins.
Companies outside Silicon Valley are taking note of the trend and incorporating technical competency criteria into their executive hiring decisions.
New Naspers CEO
In an investor call this month to introduce the market to new Naspers/Prosus CEO Fabricio Bloisi, chairman Koos Bekker said that in hiring for the role, the group found that 55% of the most successful tech companies of a similar size to Naspers have leaders with strong engineering or programming skills.
Bloisi’s background as a programmer, Bekker explained, made him stand out since Naspers and its European spinoff, Prosus, want to tap into his technical nous to navigate the complexities (and opportunities) that the rise of artificial intelligence presents.
The argument for technical proficiency in tech companies seems obvious, but non-tech companies are also seeking technical competence in their leaders to help them deal with the complexities of running organisations, like financial services companies, that are increasingly reliant on technology to thrive.
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“There are people who started out in technology but have the aptitude to lead, and then you have people who started out doing something else and have the aptitude for technology,” said Alexa Bisschops, CEO of Calybre, a data consultancy with offices in the UK and South Africa. “It is the combination of the two where the power lies.”
These leaders often also possess skills required to manage people and deal with “front of house” tasks like hosting financial results presentations. These roles aren’t typically associated with the introverted personality types that thrive in technical disciplines.
“We have to recognise people that are deeply skilled in technology that might not be as good in the leadership space because then they probably shouldn’t be in a leadership role,” said Bisschops.
She said technically competent leaders are better at identifying opportunities presented by new tech and incorporating these into the business.
They are also able to discern between what might bring real competitive advantage to the organisation and a fad – or, even worse – a scam.
The purchase of technology solutions is complex and often expensive, with vendor lock-in difficult to escape from once certain integrations have been made. Leaders with a better understanding of technology are able to ask the right questions before signing off on a purchase. Digitisation is forcing companies to reassess their identity, and leadership must know what changes to make and how to implement them.
“It’s a little bit of the Netflix story. Netflix started by hiring out DVDs and then morphed into something else entirely. What you need to understand in order to become successful in that [new] business is very different to what you needed to understand some 30 years ago,” said Bisschops.
The changes brought on by digitisation also require change management to ensure that people within the organisation accept and adapt to developments in productive ways. According to Hina Patel, MD for data and AI for Africa at Accenture, leaders who have a deep understanding of technology are able to help others in the organisation better understand their role as the company digitises – this helps ally fears associated with job and career security.
Curious
Patel said technically minded leaders combine their understanding of technology with their ability to communicate so as to benefit the organisation in different ways.
On one hand, they are able to plot a vision for the company that shows employees how they fit into a digitally transformed organisation and what they need to do to adapt their skillset to upcoming changes. On the other, they are able to sell the benefits of technology to stakeholders, including the board of directors and external investors.
“Technically minded leaders tend to be curious, so they experiment with new technologies and tell others in the organisation about them. They will give a useful assessment of the tech’s capabilities as well as its shortcomings, and they know to assess risks associated with new technologies.
“More importantly, they create a culture of innovation that spreads across the organisation. Adaptability is a very difficult skill, and if the executives themselves are not willing to change, then the organisation will not do anything innovative.” — © 2024 NewsCentral Media