Technological advances are shifting the ground beneath our feet. Nothing is safe from the rapid pace of change: products, services, business models, and the way we work have all changed over the past years, and are likely to change again. What’s more, the pace of change is likely to keep accelerating as the years go on.

These changes can be exciting if you’re working with an agile mindset—but they can also be scary. We’ve seen many examples of technological disruptions rendering entire business models obsolete in a matter of months. Organizations that fail to stay on top of such disruptions risk the value their stakeholders have worked so hard to create.

It’s down to chief information officers (CIOs) and chief technology officers (CTOs) to make sure organizations stay technologically competitive. Organizations that build new technologies into their strategies and operating models have greater success than those that don’t, McKinsey research shows.

These executives have similar responsibilities, but they’re not the same. With the IT explosion in the 1990s and 2000s, the CTO role became intertwined with that of the CIO, who is generally more involved with the technologies supporting and facilitating information and knowledge management within a company than with those driving product strategy (exhibit).

Learn more about McKinsey’s Technology, Media & Telecommunications and Operations Practices.

Not every leader within an organization needs to “understand technology” in the same way. But there should be someone in the C-suite—the CTO—who is responsible for knowing which new, potentially disruptive technologies are surfacing, to grasp both the dangers and opportunities they pose for the organization, and to see and act across the company to help formulate and execute a holistic response.

Traditionally, the CTO provided a single “buck stops here” point of view on technology trends, policies, and procedures critical to developing or enhancing a company’s products and services. As technology has advanced, the CTO role has changed to keep pace.

Technology can describe everything from materials science to the deployment of robotics in internal processes to the latest “everything as a service” models. Digitization now permeates all aspects of so many businesses, making it hard to draw a line around what a CTO’s areas of responsibility should be. The difference between a CTO and other C-suite tech roles is that a CTO should be equally concerned with product and technology development. Other C-suite digital roles tend to be more oriented toward business models and digital products and are more internally focused than a CTO.

The most effective CTOs nurture personal qualities that enable them to turn technological opportunities into sustainable successes. These are:

But it’s not just personal qualities that make for successful CTOs. The role itself should be specifically configured to cater to a combination of the needs of the organization and the strengths of the individual.

Learn more about McKinsey’s Technology, Media & Telecommunications and Operations Practices.

There are at least four distinct potential styles CTOs can adopt depending on their position and profile:

Which style suits which company best is informed by the company’s industry. In general, firms in less technology-intensive industries are good places for influencers and enablers. Influencers, often found in consumer goods companies, for example, are deep thinkers who advocate for innovation through partnerships with providers of new technologies. Enablers are more managerial, tasked with driving efficiencies in multi-business-unit organizations with lots of overlap in technologies and projects among business units.

By contrast, challengers and owners tend to thrive in more technology-intensive companies that spend a lot on research and development. Challengers do best in companies with multiple business units, where the need is to prevent business units from becoming complacent. Owners, for their part, are often found in single-product companies, where one person can keep everything in their head.

CIOs have typically managed everything related to information and communication technology. This includes policy and practice development, planning, budgeting, resourcing, and training. But in today’s agile organizations, the requirements of the top information officer are a bit different. CIOs today establish the system and infrastructure for people to do their jobs effectively in an agile organization. They are not glorified IT managers; instead, they are product visionaries, defining and driving strategic technology initiatives.

For IT to become a driver of value, CIOs should inhabit five roles:

Learn more about McKinsey Digital.

Based on nearly 150 interviews with senior tech leaders and business executives, we isolated five ways CEOs and board members can support their tech leaders:

These approaches probably don’t come as a surprise to business leaders. But too often, boards and CEOs struggle to provide CIOs with these basics. And CIOs themselves struggle with how to address issues that arise.

Generative AI (gen AI) is big news. McKinsey research estimates that gen AI could add the equivalent of up to $4.4 trillion of value annually. For CIOs and CTOs, the gen AI boom represents a unique opportunity to apply those lessons to guide the C-suite in turning the promise of gen AI into sustainable value for the business.

Through dozens of conversations with tech leaders at more than 50 companies, we’ve identified nine actions all technology leaders can take to create value, orchestrate technology and data, scale solutions, and manage risk for gen AI. They are:

The space will continue to evolve rapidly. But these nine actions can help tech leaders avoid unnecessary—and potentially costly—delays in defining and shaping a gen AI strategy.

Learn more about McKinsey Digital. And learn more about technology-related job opportunities if you’re interested in working at McKinsey.

Articles referenced: