CTO Technology Strategy & Innovation 3

Question 1

A CTO is managing a portfolio of technology investments. Which portfolio view best helps balance innovation bets with core maintenance spending?

Accepted Answer

Horizon 1-2-3 framework

Answer

McKinsey's Three Horizons framework categorizes investments across core business (H1), emerging opportunities (H2), and transformational bets (H3) to balance short and long-term innovation.

Question 2

What is the primary risk of over-investing in Horizon 3 (transformational) innovation at the expense of Horizon 1 (core)?

Accepted Answer

Core business performance degrades while future bets may not materialize

Answer

Neglecting Horizon 1 can erode the cash flows and operational performance that fund innovation, creating existential risk if H3 bets fail to pay off in time.

Question 3

Which organizational model places small, cross-functional product teams at the center of technology delivery, reducing handoffs and increasing ownership?

Accepted Answer

Team Topologies stream-aligned teams

Answer

Team Topologies defines stream-aligned teams as long-lived, cross-functional teams owning end-to-end delivery of a specific value stream with minimal dependencies.

Question 4

A CTO discovers that 60% of engineering capacity is consumed by unplanned work and toil. What is the most strategic response?

Accepted Answer

Conduct an investment audit and establish toil reduction targets

Answer

Auditing where capacity goes and setting explicit toil reduction targets (e.g., SRE's 50% cap on ops work) frees engineering capacity for strategic innovation.

Question 5

Which of the following best describes 'technical strategy' as distinct from 'technology strategy'?

Accepted Answer

Technical strategy addresses internal system design and engineering practices; technology strategy aligns technology choices with business goals

Answer

Technology strategy aligns technology direction with business outcomes, while technical strategy governs the engineering approach, architecture, and practices used to build systems.

(CTO) Certified Chief Technology Officer Practice Test

(CTO) Certified Chief Technology Officer Practice Test

CTO Technology Strategy & Innovation 3