Architects of change: Technology as a strategic imperative

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A digital revolution is underway at leading companies around the world. With the explosive growth of Big Tech and disruptions from start-ups, companies are increasing their investment in tech and elevating leaders with digital expertise to drive digital transformations and shape overall company strategy.

In the vanguard of this evolving technological landscape is Shaun Bohannon (LON 17-22), Director of Digital Technology (Digital Chief Technology Officer) at Virgin Media O2, the U.K.’s largest combined telecommunications company. The McKinsey Digital Practice alum and software engineer is part of a growing trend of leaders with technical backgrounds whose ability to understand the granular complexities of the digital world is as critical as their overall management acumen. No longer can companies solely rely on traditional business stakeholders to drive technical decisions. Shaun believes that if companies are to succeed in this new world, “technology decisions need to be made by technology-aware people.”

In this interview, we sit down with Shaun to discuss the digital age, the evolving role of the CTO, and digital best practices that every chief executive should know.

Tell us about your company and role.

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Virgin Media O2 is a joint venture between Telefónica and Liberty Global, and the U.K.'s largest combined telco. Virgin Media O2 brings together a huge, fixed broadband connectivity provider and a mobile cellphone carrier to offer all our products to one customer base in a wider ecosystem.

As Digital CTO, I oversee all customer systems of engagement, including apps, websites, and other non-direct touchpoints, such as retail and call centers, to offer a seamless customer experience. To enhance customer experience, we’re rationalizing the technology estate of both companies into a logical, best-in-class, and cost-effective offering available to our 20-million-plus customers.

What are your chief imperatives?

I’m highly attentive to creating a stable employment environment, particularly in light of the wage inflation in software engineering roles across Europe over the past five to ten years. Managing the cost-effectiveness of our highly efficient engineering teams is critical because of the cost-of-living crisis and the challenges we've seen coming from start-ups and Big Tech companies who are hemorrhaging talented engineering staff.

Second is maintaining key technical talent internally and avoiding outsourcing critical roles to ensure a hold on the IP of your blueprints for digital success. Lastly is reevaluating the relevance of software engineers as a strategy in a world where ChatGPT exists. As code can purportedly now “write itself,” we must decide to continue investing in human engineering or adopt this new way of working in so-called no-code, low-code, or code-generation solutions.

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As an ex-engineer, I believe technology leaders should encourage their engineers to embrace new technologies rather than fearing their future relevance and dismissing the quality of work generated by today’s AI, as AI will only get better with time. An analogy would be the transition from artisanal hand tools to power tools. Programming was previously akin to craftsmen exclusively using artisanal hand tools to create. Now, we can upgrade to power tools to expedite routine tasks, but with the ability to switch back to our beloved hand tools to finesse the project at hand. This is the magic formula for unlocking business value at increased speed and palatable cost. I’m excited to see how the next twelve months unfold in this unchartered territory.

How is the CTO role evolving?

Something that has always stuck was when Tunde Olanrewaju [current UK Office Manager] said to me early in my career, “Your aspiration of being CTO is too low: People like you should now be aspiring to be CEO one day." What I'm seeing is that the CTO is actually your future CEO. As companies become more digital natively, and more of the challenges of running a large organization are inherently technology-related, the importance of the CTO – which, historically, was a role that would report to the COO or CFO – has grown. In many cases, the CTO is de facto the top role at some of the world’s biggest companies. Nowadays, your technology product and digital strategies ultimately define your entire strategy.

The CTO role is becoming less about managing the underlying technology and systems estate and more about efficiently enabling future business ventures. If you look at EBITDA multipliers, nobody's interested in having a 4X, 6X, or 8X. The aspiration now is 15X or 20X, which is only possible through ‘hyperscale’ capabilities, like Cloud. This only comes if you have a truly scalable business model that can go global without being hindered by constant technical limitations. The CTO is the person within the organization who can make that happen. Globally, we continue to see a shift among businesses from having a 'technology department' to being a tech-first business.

How important is it for companies to invest in digital?

If you're not investing in digital, you're relegating yourself to irrelevance in a future generation. As customer expectations evolve, it's not so much about trying to innovate – although that should always be encouraged— as it is about trying to be the least slow in terms of your digital maturity.

By not investing in digital, you likely won’t stay competitive with your peers, who are trying to out-digitize you, and your current peers are the ones to be least worried about. Your biggest competitor will likely be a start-up you've never heard of that completely disrupts your industry and rewrites the rules. That's why I always believed the Leap offering from McKinsey is important to clients. It's a hedge against what could happen to what you currently consider your core business.

How did the Firm shape your skillset?

I’m probably as strong a technologist as when I entered the Firm – I’d like to think I’ve improved, but my pure engineering friends might disagree. But my leadership skillset is magnitudes stronger than it was. That's where I really grew at the Firm.

As a software engineer before McKinsey, I realized that my good ideas often weren’t communicated effectively to senior management. They would get lost in translation or under shifting priorities as they made their way through layers of management, resulting in decisions that were counter to good software engineering and technology practice. At McKinsey, I learned to adjust my communication style and employ different influencing methods to convey ideas better and gain the confidence of senior management to shape overall strategy to be more digitally aligned. Once company strategy was defined, I could directly accelerate change and skip months of change preparation work by using my engineering knowledge to communicate directly from top management down to engineering teams in concepts they could understand, skipping many levels in between.

McKinsey also shifted my approach from individual contributor to enabling others. When I joined the Firm, I was focused on my technical skillset to drive change. The Firm taught me that there is only so much you can do as an individual, but you can have a far bigger impact by leveraging different skill sets and working in cross-functional teams. That was a huge unlock that the Firm helped me with at a crucial part of my career.

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Name the first thing that comes to mind for the following: Digital, icon, guilty pleasure, McKinsey.

Analog. Volodymyr Zelenskyy. Fried chicken. PowerPoint.

What are three digital best practices companies should understand?

Number one is understanding the difference between "Using the Cloud" and aspiring to be "Cloud Native." Companies often make the mistake of simply moving their existing systems from data centers into a Cloud hosting environment. Instead, they should take a step back to understand what they need from their technology system and use the opportunity to radically transform their estate by leveraging what cloud technologies make possible. For example, it’s now possible to build an entire retail bank entirely in the Cloud. You can serve a customer in any country without needing a physical server that could be compromised.

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Number two is that investing in great software engineers is always worth the extra cost. I fundamentally believe in the concept of a 10X engineer – that one great person who can have the same output as ten mediocre ones. The difficulty here is having leaders who can both identify these unicorns and create an environment that not only attracts and retains them but unlocks that potential; it’s never just about compensation.

Number three is investing heavily in an effective “DevSecOps” [Development, Security, and Operations] culture to minimize the time taken from an idea to a production environment. The best-in-class cycle time should be as low as a few days, which can truly revolutionize your business. I recommend the book “The Phoenix Project” by Gene Kim to any non-technical executive, which lays out the challenges of traditional corporate IT processes and ways to improve them. The basic principle is to “Shift Left” tasks traditionally done at the end of a project plan and instead use automation to do them in parallel to increase the velocity of change and reduce manual effort.