Breaking Bad: Tech sector needs rethink on CTO

Published on the 18/09/2018 | Written by Pat Pilcher

Ministerial registrations_No CTO appointed

Ministerial resignations, $107k compensation, and did we really need a CTO anyway?…

While there was no shortage of outrage at the government’s bungled CTO appointment process, few asked what the role should entail and even fewer asked why do we need a CTO in the first place?

The chief technology officer (CTO) role was first mooted by tech doyen Rod Dury. NZTech then picked up on the idea, incorporating it into NZTech’s 2014 technology policy platform document as the industry’s contribution to policy debate. Industry leaders became so enamoured to the idea that they even went as far as proposing a Ministry of the Future. Both political parties appeared amenable to the CTO concept and Labour used it in their ICT policy heading into the 2017 election.

The logic was that having a tech-savvy figurehead would help the government keep one of the fastest growing parts of the economy on the right trajectory. (The political thinking was likely more along the lines of ‘gosh the kids are so into tech these days, let’s make like we’re doing something and they’ll vote for us.’)

Not everyone agreed. One actual CTO who had decided against throwing their hat into the ring noted that the role seemed nebulous with “no mandate and no deliverables”. Others saw the position as that of a technology cheerleader for the government and a low value, yet highly paid, waste of taxpayer funds (the role was to pay $400,000 a year, plus a $100,000 travel allowance).

In spite of the role’s high profile, none of the initial 60 applicants were deemed suitable. Two aborted recruitment attempts and a subsequent government rethink of the role saw the controversy ratchet up several notches. The writing was already on the wall. Things reached a head when it came to light that after an off-the-record meeting with the then minister of Open Government and Digital Services, Clare Curran, Derek Handley had accepted the position, signed a contract and was relocating his family back to New Zealand.

Handley, a Hong-Kong born, Kiwi-educated entrepreneur, has a mixed track record as a wealth creator. He co-founded the Hyperfactory mobile marketing consultancy in 2001, selling it to an offshore buyer for $10 million. He was also the founder and former chairman of mobile-first advertising agency Snakk Media, which raised $6.5 million from 1,200 investors who have since lost most of their investment.

Tech entrepreneur record aside, the prevailing consensus is that Handley is a savvy marketer, even if his detractors say he is more about self-marketing (current role ‘Astronaut in Waiting – Virgin Galactic’ states his social media profile). The debate around his suitability for the CTO role raged. While some said he would have been an ideal advocate for technology-centric policy making within a Labour government, others argued that he lacked the local perspectives and political savvy needed for the role. Either way, the time he spent in the US meant the local profile and support necessary was lacking.

This became apparent when Handley set out his case for the CTO job in a speech at a Techweek networking event in May. It saw him roundly derided by many tech pundits on social media. Their outrage at his eventual appointment, however, proved short-lived. Upon arriving back in New Zealand, Handley found the job he had accepted was no longer on the table.

That he then received, quite justifiably, a six figure payout, added fuel to an already raging social media bonfire.

Handley was gracious in his handling of what was, at best, an awkward position, stating on LinkedIn that “Earlier this week I was deeply disappointed to learn that the Government will no longer follow through with their commitment and will not be making that appointment at this time. However, given the unnecessary and sustained lack of transparency in the process and building pressure to rethink the approach, their decision to stop the process is understandable.”

Prevailing wisdom has it that the Government changed its mind about the appointment because of concerns around the former minister Clare Curran’s off-the-official-record handling of the hiring process. Curran was later sacked from Cabinet, and has since resigned as a minister, adding the Handley meetings to the earlier Carol Hirschfeld scandal. Curran did not respond to a request for comment for this article.

At this stage, many were asking if a CTO at the government level was a good idea. The CEO of NZTech, Graeme Muller has suggested a similar function independent of government support. Muller said “Let’s just get on with it. In the past three years, NZTech has managed to bring together and support 21 tech communities without any government funding to do so”.

What many armchair experts didn’t factor into their thinking was the fact that a cross-department CTO already exists within the Department of Internal Affairs. They work with departmental CIOs, and a Government CDO, to ensure that the various government agencies all sing from the same tech procurement/IT management hymn book, and look to the future with eGov initiatives.

It’s clear that the reality of a government level CTO is far more complex than many initially thought. New Zealand needs a tech-savvy futurist visionary who could, for instance, help the government navigate thorny legislative issues such as security and privacy as digital transformation deepens its impact on our lives. The role is also expected to involve a considerable amount of ministerial hand holding and steering the government away from the hype that so often characterises the tech sector. Possible outcomes could include growing New Zealand’s embryonic video gaming industry as well as increasing the number of Kiwi computer science graduates and keeping them employed within New Zealand.

So does New Zealand need a CTO? The risks involved in having populist politicians and their advisors lumbering blindly into an increasingly technology-dominated world are significant. Disruption and technology go hand in hand, so being able to understand and interpret tech-driven issues and ensure policies are developed to lessen potential downsides makes considerable sense.

Disruptions are many-fold. Resourcing of quality local journalism has been decimated by advertising revenues being sucked offshore by social media platforms. Offshore online retailers are challenging how and where people buy, and how goods get taxed. The gig economy is disrupting norms of employment, along with rapid automation. In short, disruption is already here and New Zealand needs good advice on how to respond.

The CTO role is likely to be far too big for any one person. What is probably needed, as is being echoed by the industry, is a Chief Technology Advisor who manages a team of specialists – a model which has worked well for the Chief Science Advisor.

Any such team would ideally combine strategy, planning and political process savvy in equal measures. The group would need to keep the many areas of government impacted by technology informed while simultaneously aligning industry thinking and keeping New Zealanders excited about a digital future.


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