Tech Org Structure In the Age of AI

It is critical to get the company org structure correct for maximum resonance, growth and achieving the AI Flywheel

I strongly believe that any company or organization to thrive and grow requires strong leadership, with vision and also the execution resolve and endurance to deliver.

You could have the best of the team, but still fall short. History is lined with great many examples and the tech industry is no different— Yahoo.com , AOL.com , Nokia, Kodak, Blackberry and more.

Strong leadership coupled with a strong team delivers the difference, In My Humble Opinion (IMHO)

AI Revolution:

The year 2023 started with a big-bang on AI with the launch of Chat GPT from Open AI. Generative AI quickly became the common parlance / hot buzz topic of the general population and even more so with the tech community.

While the term “Artificial Intelligence / AI" was coined more than five decades ago and while there has been slow but steady progress in the underlying technology itself, it is evident that the seminal paper on “pretrained transformers" in 2017 from the researchers at Google / Deep Mind proved to be the much needed booster to skyrocket the advancements in AI to the next level.

It is almost certain by now, according to many industry experts, that this is the beginning of a new era much like the Industrial revolution of early 20th century and Internet revolution in the 1990s

30yrs ago, almost none of the businesses had a online presence. 20yrs ago, a majority of the businesses had some online presence. 10yrs ago, a vast majority of business had both a website and social media presence to establish their brand. In 2024, its is basically a mistake if the a business, any business, does not have an active presence & brand identity online.

AI is going to be like that in 10, 20, 30yrs from now!

Almost every business will be compelled, due to market dynamics, to adopt AI in their day-to-day operations, products & services. In 10yrs time, it will only be a mistake not to leverage the power of AI!

It is in this context, that it is important to leverage the power of AI in operating and growing every business of the 21st century. It is important, now more than ever, to have strong leadership team with AI & technology acumen to steer the business for sustained growth.

Common Org Structures:

I am sure many have seen the below comical depiction of org structures in some of the biggest tech companies.

Beyond the fun part of it, there are quite a few org structure followed by some of the key tech and tech-enabled companies these days.

This Hubspot article has some nice details on them. This Forbes articles also goes in detail about some the most common org structures.

I started my career at Amazon and worked for 14yrs, had my own start up and then moved into Dubai almost 3 years ago as CTO for Namshi.com which is the largest fashion e-commerce company in UAE and the greater GCC. I have been in the Sr. management for 10+yrs and in the C-suite for 3+yrs. Here is my 2 cents about a strong org structure for Tech and Tech enabled medium to large companies. I am not focusing on startup team structure as its largely wearing multiple hats, hustling and bustling modus operandi.

Objectives:

Its important to define the objectives before we proceed with proposals.

• Clarity: The org structure needs to provide clarity in each leaders roles & responsibilities, ownership scope, chain of command and decision making authority.
• Efficiency: The org structure needs to reduce bureaucracy, increase productivity of each product line & each team, by clearly scoping the ownership boundaries. It is important the org structure matches the skillset and nature of work to bring about the efficiency in day-to-day execution.
• Alignment: The org structure needs to ultimately align with the 5 year / 10 year vision of the company to achieve resonance or the multiplier effect or the “firing on all cylinders” phenomenon

Org Structure Proposal:

Chief Executive Officer (CEO):

I believe this role is quite evident. CEO is the ultimate captain of the ship. CEO needs to set the broad vision of the company, needs to define the values and culture of the company, needs to set clear targets and goals for the business. The CEO reports to the Chairman and the Board of Directors depending the company structure, if it is public, private, or VC funded etc.

Chief Business Officer (CBO) / Chief Commercial Officer (CCO) / Chief Revenue Officer (CRO):

The names differ slightly based on the company preference, orientation and company’s domain practices, but they are essentially the same - the CBO is responsible for business development and bringing in the revenue. The KPI are around revenue numbers and sales targets.

Chief Marketing Officer (CMO):

It is often debated if the marketing department should be part of the business development unit as many of the KPIs overlap. It is true that the Marketing team and Business Development team need to work very closely and almost tied to the hip with each other. However IMHO, these serve two strategically different purpose. One of the key KPI of marketing team is build the “brand identity”. Just imagine the Nike’s advertisements and their positioning or the Apple’s brand positioning. Branding is a lot about creativity. Marketing is lot about numbers.

The Marketing team as a whole have the supreme & complex charter of pushing the numbers with creativity.

Chief of Human Resources (CHR) / Chief People Officer / Chief of Staffing:

Once again, I believe the role is quite evident. CHR owns employee benefits, their well being and other company benefit structure. In many IT services based companies or traditional companies, the HR department assumes huge significance with the authority that it dictates on several day-to-day operations. This can create unnecessary bureaucracy and relegating decision makers not being the subject matter experts, which only creates inefficiencies.

Chief Legal Officer (CLO):

Every company, be it small , medium , or large requires a strong Legal team. With the ever changing laws and ever changing business dynamics, it is important to respect the “law of the land” and ensure full compliance in daily operations.

Chief Finance Officer (CFO):

Managing working capital, maintaining book of accounts, ledgers, financial projections, managing account receivables (AR), tax reporting & compliance - all are complex but mandatory requirements of a successful business. The finance team with a strong leader is key to streamline this vertical.

Chief Operations Officer (COO):

Ecommerce companies, Supply Chain companies, and ground operations heavy companies will be greatly benefit from having the Chief Operations Officer who can champion the complexity of ground operations. A pure SaaS company for example, would not benefit from having a COO.

Chief Technology Officer (CTO) / Chief Information Officer (CIO):

I wanted to cover this role in more details and hence kept it to the last.

The titles CTO and CIO can be lucratively similar but there is fine line between the two. Let me explain this with some examples.

For companies who core business and revenue segments are physical industries, such as - Real Estate, Hotels & Resorts, Restaurants, Shipping, Oil & Gas, Automobile Sales - the company requires technology to streamline and bring efficiency to their operations. The CIO is the right person for this group of organizations, IMHO.

The company is certainly tech enabled and requires a strong IT team to ensure operations are in order. However, it does not make business case for these companies to invest in developing new technologies, in developing new software, in developing new products that are highly tech focused. The company is better off using & deploying existing software solutions in the right way for the right use case to deliver the business goals. The product or service being offered and the end customer satisfaction is delivered by something other than software.

This by no means is simple or straightforward. This requires a highly technical leader, the CIO, to asses the business goals and plan out the tech infrastructure to be robust, scalable and flexible for the future business growth.

For E-Commerce companies, Fintech companies, mobile apps, Software as a Service (SaaS) companies, smart devices, data analytics companies - Software Tech is right front & center of the product & services being offered to the end customer. The tech delivers the products & services. In this group of organizations, the CTO role becomes important.

The success of the product is a key KPI for the CTO. The sophistication and robustness of the tech infrastructure is a key KPI for the CTO. The customer experience of the product is a key KPI for the CTO. Transitively, the business growth is also a shared KPI of the CTO.

With the ever increasing open source products, with ever increasing SaaS products that are close to solving a majority of essential business needs, the need to develop custom software application in-house becomes increasingly less likely and stitching together a suite of SaaS products to meet to build and deploy the end product seems more likely these days. IMHO, I think this is where role definitions of CTO & CIO overlap quite a bit.

Zooming Into Tech Department Org Structure:

Typically the CTO manages and owns a lot of the tech KPIs along with the product & business KPIs. With the accelerated revolution of AI , which is surely going to influence and impact almost every aspect of the product being built, it is important to have a dedicated focus on leveraging & weaving AI capabilities in to the product from day one.

Debate #1: Should The Product Team Report to CTO or CEO?

The answers is always - it depends - however for the tech centric companies such as mentioned before (e-com, fintech, SaaS, apps & etc.), it is important that Product and Tech teams fall under the umbrella / org division. CEO’s need to have strong tech & product acumen, but they are burdened to drive the business charter, the public relations charter and settings the company culture & more.

It is obvious that Product & Tech teams are tied to the hip. In fact pretty much all the teams in the above mentioned tech org chart needs to work very closely with each other to deliver quality product & services to the end customer.

You could have a person whose core expertise is in Tech & is comfortable wearing the product hat to lead as the CTO. You could have a person whose core expertise is in Product & is comfortable getting hands dirty with system architecture and tech jargons as the CPO. Either one will work.

IMHO, this is why I strongly believe that for most tech centric companies, the role needs to redefined as Chief Technology & Product Officer (CTPO) due to the duality and due to the inseparable accountability.

It is important to focus on leveraging & weaving AI into every aspect of the Product from day one!

Debate #2: Do You need a separate Head of IT and CTO? Why can’t they be managed by the same person?

With the proliferation of software, cloud infra, connected devices which are not just laptops and mobile phone anymore, it is ever more important to have a strong, separate IT team to procure & manage them efficiently. Software licenses, negotiating with vendors on pricing and quotes, installation of software, installation of office premise hardware, LAN, WAN, Smart Devices are heavy task that require specialized skillset and capacity to have everything in order.

It is important that almost every medium to large business need to have a tech leader who is actively wearing the product hat for innovation. The internal corporate tech infrastructure needs its own leader , the head of IT. However it is important that the IT head reports and works with the CTO of the company to meet the business KPIs by ensuring the house is in order.

Debate #3: Does the Data team report to the head of Software or head of product?

From notepads, to Excel sheets, the Data engineering discipline has come a long way in sophistication and sheer tech complexity. Setting aside the AI component for a bit, just the Data Engineering disciple is tech heavy and requires a lot of sophistication and deep integration to get it right. Even though the immediate and day-to-day stakeholders might be the business & product folks, the skill set & activities of the data-team is best managed by the tech org, preferably reporting the CTO.

The Case For Head of AI:

The role “Chief of AI” / “Chief AI Strategist” / “Chief AI Officer” was trending a bit in 2023 in tune with the AI hype. IMHO I believe Chief Technology Officer is good as or even more empowering than Chief AI Officer.

AI is going to change the way products & services are going to be delivered very soon. There should be no doubt. Unless you are company like NVidia, Open AI, X.ai , Anthropic or Mistral, who are building the core LLMs, then its is more than likely that you are leveraging the AI capabilities to build , improvise , innovate on products & services for your customers. For that matter, there even a CTO in OpenAI, Mira Murati , who is doing an fantastic job in stretching the envelope of core AI tech. I feel that naming a role a Chief AI Officer more as a fad than anything.

In the technology org, just like there is head of software engineering, head of mobile apps, head of data, there is absolutely a need to have dedicated “Head of AI” in the tech org.

The AI technology landscape - LLMS, Agents, Fine Tuning, RAGs, Text To Speech (TTS), Image to Video, Text to Video, Text to Image - a lot more are rapidly evolving and open up a huge plethora of capabilities for innovation. It is important for a dedicated lead and dedicated, small team if you will, to keep abreast of these advances, digest them appropriately and translate their relevance for the business needs is going to huge differentiator in the rapid growth of the business. It is almost certain that the rate of adoption of AI capabilities is going to be the key for accelerated growth for the business.

I do not think the CTO will have all the time and resources to focus on leveraging AI, purely because the field is so dynamic and already vast. Hence the need for a dedicated, senior head of AI to be part of the core tech org.

One of the best example or inspiration is Dubai Govt appointing Head of AI in all its govt departments to boost leveraging more AI capabilities in its services.

Also, with the dedicated Head of AI, we have this wonderful opportunity to create and nurture the AI Flywheel in any business

The AI Flywheel:

Clearly we have heard a lot about the famous Amazon Flywheel . Amazon’s Jeff Bezos coined this term and is still a huge proponent of this flywheel concept, which has since been widely adopted, admired and benchmarked.

Extrapolating the same concept and applying it with AI & Product lens, I believe we can visualize a continuous and robust flywheel amplified by AI.

The AI capabilities have simplified & increased the velocity of building prototypes. AI has opened up huge opportunities for innovation by creatively leveraging the power of AI capabilities to build completely new products and quickly ship it for customer engagement and feedback. The already existing telemetry strategies can instrument customer’s micro interaction and gather valuable feedback instantly. This data collected can be fed into the product design through AI itself, rather than elaborate methods as earlier, and have the AI spit out recommended tweaks to make it even better. The updated product can be released to customers within a few weeks and iterated again.

This virtuous flywheel of rapid innovation, releasing MVPs and tweaking to improve has been pumped up with AI tools now. AI tools and technologies have opened a whole bunch of avenues for product innovation and delivery that was not possible just a couple of years ago.

Uber for example wouldn’t have existed if it was not for iPhone. TikTok wouldn’t have existed if it wasn’t for the mobile phones.

These are entirely new business & business models on top of mobility platforms.

AI is the iPhone moment for productivity increase and creative innovations.

It is a must for businesses to tap in to this AI Flywheel for sustained growth and edge out competition

More about me at: https://vmbharathi.net

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Cheers

~ Bharathi Masilamani ~