šš» Welcome to Lead and Scale, the newsletter for the leaders navigating the complexities of scale-ups. In today's issue, we're studying four key areas where a CTO must be both strategic and tactical.
When I transitioned from systems engineer to a leadership role, my biggest challenge was understanding when I needed to be strategic and when to be tactical. After spending the past 15 years managing crises, sitting down and thinking about your next move is anything but a habit.
I found help in the most unexpected way: a 2,500-year-old book.
In "The Art of War," Sun Tzu distinguishes strategy as the art of winning wars versus tactics as the art of winning battles.His famous quote, "Strategy without tactics is the slowest route to victory; tactics without strategy is the noise before defeat," perfectly captures how CTOs must balance long-term vision with immediate problem-solving.
1. Team Development
I had the opportunity to experience both the hyper-growth and stabilization phases of a scale-up. Neither of these will end well if you don't mix the right amount of strategy and tactics.
The strategic part comes with the creation of a capability framework, something I never heard of during my 15 years in startups.
A capability framework is a tool used to define, assess, and develop the skills, knowledge, and processes required for effective team performance. It allows alignment (that's a word you'll read a lot in this newsletter) of the engineering team with the company's goals.
In other words, a capability framework is the blueprint for your engineering team.
Starting the hyper-growth phase with a capability framework in mind helps a lot. It allows you to hire at scale while building for the future.
One of the biggest challenges I remember was constantly adjusting the engineering team organization to deliver our products while incorporating new hires almost every week. It requires being constantly present with the team, understanding the bottlenecks while avoiding becoming one.
An amazing example of leadership balance comes from Microsoft's Satya Nadella. Nadella implemented his "growth mindset" culture while personally reviewing code during Azure's critical transition to support Linux.
2. Technical Debt Management
There's no right time to start managing technical debt. You only notice it when it starts to hurt.
Aristotle (384-322 BC)
From a strategic perspective, managing your technical debt means two different things:
Planning your architecture evolutions, which involves both keeping your technical edge and knowing your codebase well enough to understand where it's going to be a problem.
Deciding to address it before it's too late.
For most of my career, "when" was actually "when it's not sustainable anymore". Some signs you're already lagging behind include: increasing time to production, abnormal number of bugs and regressions, and degraded performance.
From a non-tech perspective, technical debt management is often misunderstood as a waste of resources: if there's a need to rewrite the code, then it's the "techies'" fault for not doing their job properly.
A codebase is like a road. It's first built to handle a certain amount of traffic between two points. Then, it connects to more roads, the amount of traffic increases, until it gets too small and bumpy, eventually breaking cars and causing accidents. That's the moment you need to close it, at least partially, fix it and add one or two lanes to handle more traffic.
That's the tactical part: critical system stabilization.
During the 2010 World Cup, X (formerly Twitter) experienced the "Fail Whale" crisis, named after the image displayed when the service was over capacity. Twitter's CTO shifted from strategic planning to hands-on system reliability work, then back to strategic architecture redesign.
3. Customer and Stakeholder Relations
Managing customer and stakeholder relationships begins with transparent communication about the technology roadmap.
The technology roadmap - which includes product features, scalability, and tech improvements - is a bridge between customer needs and business expectations. Transparent communication comes with metrics and KPIs that customers can associate with their problems.
From the stakeholders' perspective, communicating the technical roadmap creates confidence in the company's technical direction for growth and operational efficiency, while staying competitive in an evolving market.
Most of the time, your customers and stakeholders neither understand nor care about your technical roadmap. What they care about is the problems they expect you to solve in a timely manner. Being able to translate technical choices into measurable business outcomes is a skill a CTO must develop to ensure cross-disciplinary work.
Here, you can notice how thin the line between strategy and tactics becomes.
After discontinuing Bitcoin payments in 2018, mostly due to market volatility during transactions, Stripe decided to reintroduce crypto payments in 2022. The strategy included:
Supporting stablecoins like USDC, which mitigates volatility risks
Relying on faster blockchains like Ethereum for quicker transaction speeds
Implementing automatic crypto-to-fiat conversion to reduce complexity for businesses
While implementing the platform strategy, former CTO David Singleton engaged with the company's major clients during the second crypto payment integration. This helped Stripe overcome the initial "cold start" they experienced.
4. Reading Market Signals
Reading market signals is not (only) a CEO responsibility. It is a key CTO skill to forecast the next paradigm shift, plan upcoming hirings, or turn an internal tool into a multi-billion dollar ARR solution.
AWS started as Amazon's internal hosting platform, and it took 4 years before S3 and EC2 were released to the public.
Allan Vermeulen launched AWS internally in 2002, understanding the growing importance of virtualization as a way to scale infrastructures. Werner Vogels later expanded this vision, developing a pay-per-minute/request virtual infrastructure model. S3 was released in mid-2006, quickly followed by EC2 a few months later.
Today, AWS contributes 17% of Amazon's revenue, generating $21.4B annually.
In 2012, Vogels had to manage a significant service disruption in the US-East-1 region caused by an electrical storm in Northern Virginia. The storm led to power fluctuations and generator failures in one of the data centers, affecting services like EBS and RDS.
Werner Vogels operated both at the tactical level, coordinating the US-East-1 region response, and at the strategic level, leading AWS to implement measures improving resilience against extreme weather events. The company now replicates critical system components across multiple Availability Zones to ensure high availability during natural disasters such as fires, tornadoes, or floods.
As you can see, thereās often a thin line between building the strategy, and being on the front line. In the complex and fast world of fast growing tech companies, it is easy to lose sight of the big picture when facing critical issues. Being able to step back and ensure youāre still going in the right direction, even in the middle of the storm, is a critical skill for a CTO.
Thank you for reading, and let's meet next Tuesday at 8:00 CEST.
Photo by Arjan de Jong