CTOs Get Paid to Predict the Future
Addressing an Overlooked Skill in the Technology Leaders Toolkit
The Executive Brief
Big. It was a movie released in 1988 starring Tom Hanks. It’s about a young boy who was disillusioned by his lot in life and makes a wish to “be big” that is granted by a fortune teller at a carnival. He wakes up the next day as a 30-year-old version of himself. Hijinks ensue.
It was a clip of that movie that I saw the other day that became the inspiration for this article. In watching the scene, I found myself empathizing with the fortune teller (sorry, Mr. Hanks, but it’s true) because predicting the future is a huge part of my job as a CTO.
I spend a healthy chunk of each week trying to predict outcomes for my team, the business and even my peers. It’s…exhausting. And it makes me wish I had something like this in my office to relieve the stress. But until that happens, I’ll just content myself with passing along a bit of what’s worked for me.
Btw, before you dive into it, here are the most interesting bits in technology from the last week.
Elon Musk is suing OpenAI for a “stark betrayal of the Founding Agreement.” OpenAI responded with a statement that the suit is really about Musk’s disappointment over no longer being a part of the company.
Part Game of Thrones, part Succession, the saga of OpenAI is riveting. Will the constant drama affect their ability to innovate? Is it going to cause management to take their eye off the ball long enough for rivals like Musk to catch up? Time will tell.Security researchers created an AI worm in a test environment that can automatically spread between generative AI agents—potentially stealing data and sending spam emails along the way.
AI and chatbots are fertile ground for novel attacks that steal data and generally wreak havoc. I expect stories like this to be a regular feature for some time to come.The EU notified X, ByteDance and Booking.com that they may meet the criteria to be classified as gatekeepers on Friday. If classified as gatekeepers, the companies would be required to abide by a number of rules include making their messaging apps interoperable with rivals and allow users to remove pre-installed apps or software.
This could be a benefit to smaller competitors, but the wheels of regulation turn slowly so it will be a while before anything tangible comes of this.
CTOs Get Paid to Predict the Future
Many technology leaders and CTOs don’t realize that we’re very well-compensated partly because of our ability to predict the future accurately.
This responsibility is no different than those some other kinds of executives have, such as Sales Leaders, CFOs, and of course CEOs (who must pretty much be Nostradamus at all times, about everything!)
But for some reason many CTOs don’t realize they have to develop the prediction skillset until it’s too late. In fact, some technology leaders even resent having this responsibility placed on them at all.
The best, “elite-level” CTOs are good predictors of the future and know how to make accurate predictions across a number of different areas.
For example,
Predicting whether a software delivery will be on time
Predicting when, where or how a security breach will occur
Predicting outages and downtime
Predicting when and where staff attrition will happen
Predicting budget & financial impacts from project slippage
And if you’re a CTO of a somewhat influential company, you may even get asked to predict major industry trends. Take Amazon CTO Dr. Werner Vogels and his 2024 predictions, for example.
The list of things a CTO has to predict is very long. But even under immense pressure the best technology leaders get the majority of these kinds of predictions correct most of the time.
If you think back to the many asks over the course of your career, you’ll probably find a good bit of them had an element of predicting the future or making a projection of some kind.
The typical business is very often asking CTOs to not only predict the future but to do so accurately, so business stakeholders can run the business well.
Lets Look at an Example
You’re the CTO of $150M revenue company which likely means you have at least 150 to 200 engineers. The BoD asks you to reduce the in-house team to 50 headcount and move the remaining 100 slots to a 3rd-party partner based in Latin America. And they want it all done in 6 months.
There’s a lot of complexity involved in this initiative, for sure. There are dozens of factors to consider, from developing a relationship with the new 3rd party, to establishing a knowledge transfer plan, to getting the new team up and running in a relatively short amount of time. And that’s just the tip of the iceberg.
Regardless of the challenges with this kind of effort the business is going to want to know a few key projections from you:
When will the new team achieve the same productivity as the current team?
What will the cost projections look like in year 1, 2, 3 and beyond?
Will you lose any valuable players and what kind of attrition will there be?
How will the timing and scope of the roadmap be impacted by the effort?
Will you be able to scale up to new levels of headcount with the new 3rd party partner?
A good CTO must be clever at determining the answers to all of these questions. But many technology leaders lack the ability to make these predictions accurately.
Why might this be the case?
There are many reasons but there is one that I think stands out: by nature, most CTOs are not risk-takers and making predictions means taking risks (sometimes really big risks).
In my view, many technology leaders are held back in their ability to predict the future because of a natural fear of risk.
This isn’t unusual of course. After all, what if the predictions are wrong? An error may affect not just the leader but their teams and even the business.
But don’t expect to jump to the elite-level of CTO without overcoming this fear and learning to make predictions accurately.
So, how can you develop this skill?
I’ve seen many technology leaders make the leap.
Developing Skills to Predict the Future
First, you must make time for predictions. If you’re just reacting to everything as it comes and never carving out time to really think carefully about the future, then chances are you’re not going to become very capable at this skill.
Learn how to pattern match. You should constantly be relating current initiatives you’re working on to initiatives you’ve completed in the past. The more experience you have in your career the easier this will be for you, of course.
Build modeling tools. Elite-level CTOs have a number of spreadsheets & tools for modeling initiatives which they take with them from one company to the next. If you don’t have these then start building your personal predictive toolkit.
Talking to fellow CTOs is an important piece of the puzzle. Outside experts can be very helpful since they may have solved for the exact problem you’re currently faced with. Learn how to summarize your issue succinctly and then gain valuable wisdom from conversations with your peers.
Data and trend analysis isn’t just reserved for statisticians and is another key skill for a CTO or technology leader to develop. Predicting the future sometimes means sifting through reams of complex data to come up with what the future state will look like.
With the rise of AI you now have an additional tool to help you make projections and predictions. Whether it’s LLMs or Data Science you have a new toolset to help you think about the future and model out what’s going to happen.
Last but not least is to rely on your judgement more than you do now. This is a big part of becoming an elite-level CTO. Trust your judgement about big decisions and how the future will turn out. Most of the time your experience will enable you to make good predictions.
For More Information
If you really want to take a deep dive, start with the amazing article “Six Rules for Effective Forecasting” by Paul Saffo that appeared in the July-August 2007 edition of the Harvard Business Review.
The goal of forecasting is not to predict the future but to tell you what you need to know to take meaningful action in the present.
I strongly recommend reading the article. But for those that want the tldr; version I’ve put a brief description of the author’s six rules below.
Rule 1: Define a Cone of Uncertainty - The art of defining the cone’s edge lies in carefully distinguishing between the highly improbable and the wildly impossible.
Rule 2: Look for the S Curve - The most important developments typically follow the S-curve shape of a power law: Change starts slowly and incrementally, putters along quietly, and then suddenly explode, eventually tapering off.
Rule 3: Embrace the Things That Don’t Fit - The early part of the S curve before it explodes with indicators that subtly hint at things to come.
Rule 4: Hold Strong Opinions Weakly - In forecasting a lot of weak but interlocking information is vastly more trustworthy than a point or two of strong information.
Rule 5: Look Back Twice as Far as You Look Forward - The texture of past events can be used to connect the dots of present indicators and thus reliably map the future’s trajectory–provided one looks back far enough.
Rule 6: Know When Not to Make a Forecast - It can be a liability for forecasters to confuse novelty for change.
Closing Thoughts
As you can see, developing the skill to predict the future is very realistic even if you don’t have that skill today.
I would strongly encourage any CTO to embrace this area of responsibility as it can sometimes mean the difference between just being good vs being a great, “elite-level” technology leader.
Here are some other articles from Technocratic that you may enjoy as well: