Redefining CTO: Analog Tech, Global Scale, and AI
Max Jopen, CTO of Bechem, challenges the software-centric definition of the CTO role. This analysis explores how a 192-year-old specialty chemicals firm navigates geopolitical supply chain shocks, integrates AI for operational efficiency, and manages global scaling across diverse time zones and cultures.
The Non-Software CTO: A Strategic Imperative
The traditional perception of the Chief Technology Officer (CTO) as a software-centric role is a significant misconception in traditional industries. Max Jopen, CTO of Bechem, a 192-year-old specialty chemicals company, illustrates that the CTO role in such contexts is fundamentally about product technology, R&D, and global scaling of analog innovations. This distinction is critical for leadership clarity, as it separates the CTO from the CIO, who manages IT infrastructure. In Bechem's case, the CTO oversees a global network of laboratories and R&D teams, focusing on formulating lubricants, coatings, and specialty chemicals for diverse sectors including automotive, mining, and healthcare.
Navigating Geopolitical and Supply Chain Volatility
Recent geopolitical conflicts have exposed the fragility of global supply chains, particularly in the oil and chemical sectors. Jopen notes that while the fear of job loss or project cancellation is often exaggerated, the operational impact is real. The CTO must shift from a 30-40% strategic focus to a 90-100% operational focus during crises, managing resource scarcity and employee anxiety. The company leverages its long history and diverse workforce to navigate these challenges, using institutional memory to identify alternative raw materials and sustainable solutions, such as ester-based oils, to mitigate dependency on volatile mineral oil markets.
AI as a Local Efficiency Tool
Artificial Intelligence is being integrated into Bechem's operations not as a transformative disruptor, but as a tool for local efficiency. AI automates repetitive tasks such as report generation and document drafting, saving significant time for R&D staff. However, Jopen emphasizes that AI does not accelerate the end-to-end process; it merely optimizes specific nodes. The strategic value lies in redeploying the saved time to high-value activities, such as hands-on laboratory work and human-centric leadership, rather than expecting a systemic speed-up. This pragmatic approach avoids the hype of 'AI replacing humans' and focuses on tangible operational gains.
Global Scaling and Cultural Adaptation
Scaling from a mid-sized German firm to a global corporation presents unique challenges, including time zone conflicts, cultural differences, and varying regulatory environments. Jopen highlights the need to adapt processes to match the speed of global markets, particularly in Asia, where 'China Speed' demands rapid response times. This requires a balance between maintaining German quality standards and adopting agile, fast-paced operational models. The CTO must facilitate this cultural and procedural integration, ensuring that global teams can collaborate effectively despite geographical and temporal distances.
Conclusion
The CTO role in traditional industries is evolving to encompass a broader scope of technology management, from analog R&D to digital integration. Success in this role requires a clear understanding of the distinction between IT and product technology, a pragmatic approach to AI adoption, and the ability to navigate global complexities. By leveraging institutional knowledge and diverse talent, companies like Bechem can maintain resilience and innovation in a volatile market environment.
Key insights
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The CTO role in traditional industries is often misunderstood as purely IT-focused, but it actually encompasses analog technology, R&D, and product innovation. This misalignment leads to irrelevant vendor pitches and stakeholder confusion.
Impact: Clarifying the CTO scope improves stakeholder alignment and ensures that technology investments are directed toward core product innovation rather than just IT infrastructure.
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Geopolitical conflicts significantly impact supply chains, forcing a shift from strategic to operational focus for CTOs. This requires managing resource scarcity and employee anxiety while maintaining production continuity.
Impact: Proactive crisis management and diverse sourcing strategies can mitigate the impact of geopolitical shocks on production and profitability.
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AI provides significant time savings in repetitive tasks but does not accelerate the end-to-end value chain. The strategic value lies in redeploying saved time to high-value human-centric activities.
Impact: Pragmatic AI adoption focuses on local efficiency gains, allowing employees to focus on complex problem-solving and innovation rather than administrative tasks.
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Global scaling requires adapting rigid local processes to match international speed, such as 'China Speed,' without compromising regulatory compliance or quality standards. This involves balancing German quality with agile operational models.
Impact: Adapting processes to global market speeds enhances competitiveness and customer satisfaction, particularly in fast-moving industries like automotive.
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A diverse workforce with a mix of long-tenured and young employees provides institutional memory and fresh energy, enabling faster crisis response and knowledge transfer. This diversity is crucial for navigating market disruptions.
Impact: Leveraging diverse talent pools enhances organizational resilience and innovation capacity, allowing companies to adapt more quickly to changing market conditions.
Action items
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Clearly define and communicate the scope of the CTO role to distinguish it from the CIO, focusing on product technology and R&D rather than just IT infrastructure. This involves updating job descriptions and stakeholder expectations.
Impact: Reduces misaligned expectations and ensures that technology investments are directed toward core product innovation, improving strategic focus and resource allocation.
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Develop a crisis management plan that includes diverse sourcing strategies and alternative raw material options to mitigate the impact of geopolitical shocks on supply chains. This involves identifying and qualifying alternative suppliers.
Impact: Enhances supply chain resilience and reduces the risk of production disruptions, ensuring business continuity during market volatility.
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Implement AI tools for repetitive tasks such as report generation and document drafting, and establish protocols for redeploying saved time to high-value activities. This involves training employees on AI tools and defining clear use cases.
Impact: Improves operational efficiency and allows employees to focus on complex problem-solving and innovation, driving higher value creation.
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Adapt local processes to match global market speeds, particularly in Asia, by adopting agile operational models while maintaining regulatory compliance. This involves cross-functional collaboration to identify and implement process improvements.
Impact: Enhances competitiveness and customer satisfaction by enabling faster response times and better alignment with global market expectations.
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Leverage the diverse workforce by creating structured knowledge transfer programs that pair long-tenured employees with younger staff. This involves identifying key knowledge areas and facilitating mentorship opportunities.
Impact: Enhances organizational resilience and innovation capacity by combining institutional memory with fresh perspectives, enabling faster adaptation to changing market conditions.
Quotes
“Das T in CTO steht ja für Technologie. Und was einfach so heute, glaube ich, auch einfach durch die Megatrends geprägt ist, ist einfach, die Leute vergessen, dass es auch analoge Technologie gibt.”
“Die Angst ist größer als der eigentliche Impact. Das ist tatsächlich was, wo ich sagen muss, Unternehmen wie Bechern, wenn es 192 Jahre da ist, hast du noch nie in der Zeitung gelesen und sagst, boah, heute wieder Massenentlassung, 10.000 Leute entlassen.”
“Ich muss mir tatsächlich überlegen, wie finde ich einen gemeinsamen Prozess, der das, was ich an deutschen Anforderungen habe und an mich selber im Prinzip abbildet und gleichzeitig verhindert, dass ich in den anderen Ländern abgehängt werde, nur weil ich im Prinzip aus der eigenen Einheit einen Konzern gemacht habe.”