CTO Sessions: Pete Hirsch, BlackLine

What predictions do you have for the role of the CTO in the future? "The CTO of the future will be much more than a great technologist. The CTO must also be a great business leader..."

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What was your first job? I started my career at Hughes Aircraft as an electrical engineer - testing missile guidance systems, building automated test software.

Did you always want to work in IT? Not exactly, I had actually planned to become a venture capitalist after attending Harvard Business School for my MBA, which would have taken me out of technology - at least directly. As I was planning this though, I also founded a software startup in Redondo Beach which started to take off, so I couldn't leave to get my MBA.

What was your education? Do you hold any certifications? What are they? I received my Bachelor's and Master's degrees at the University of Southern California - both in Electrical Engineering. For my master's degree, I specialised in spread spectrum communication systems, just when spread spectrum was taking off.

Explain your career path. Did you take any detours? If so, discuss. I started off in electrical engineering, but in my first couple of jobs at Hughes Aircraft and TRW Space &Defense, I became so enamored with software, the ability to create mathematical simulations and 3D visualisations, that I founded a company, 3-D Visions, which developed the first scientific data analysis and 3-D visualisation application for the PC. It took off, and I then sold the company, which moved me from Redondo Beach to the Silicon Valley.

From there, I met Dr. Michael Stonebraker, one of the most prolific pioneers in the database industry. He had just become the CTO of Informix after selling his company, Illustra to them, and I had the opportunity to work for him for several years as chief architect, which provided me with an invaluable understanding of databases.

From there, I went to a Kleiner Perkins-backed company in 2000 and led engineering for one of the first SaaS application companies. After a few startups, which eventually led me to IBM through an acquisition, I went to join Ariba as CTO. From there, I went on to lead Technology at Ellie Mae, and now at BlackLine, where I also lead Product Management.

What type of CTO are you? I like setting bold visions and building great teams to bring them to life. I enjoy working with teams that are smart and energetic and only see barriers as opportunities rather than blockers. I'm not a leader who lives by, or in most cases even uses dashboards with quantitative metrics and burndowns. On the other hand, I like planning out the journey in advance, with milestones and checkpoints, rather than just figuring it out as you go. I operate at an intuitive level and feel comfortable making decisions with limited data, but I am passionate about always focusing on outcomes and the "why" before setting off on a journey.

Which emerging technology are you most excited about the prospect of? I'm very excited about what the Public Cloud offers and how it is transforming the way we build software systems today. It is making technologies such as serverless-compute available, which I think forces us to fundamentally rethink how we build systems. It is also making technologies such as AI much more mainstream, which opens the door to a much broader set of users - not just quants with PhDs, but to engineers and business analysts who build our systems.

Are there any technologies which you think are overhyped? Why? I think blockchain is one of the most overhyped technologies out there. It has usage in cases of distributed ledgers in the absence of a central "trusted" authority, but I see so many companies trying to figure out how they can jump on the bandwagon. It's great for cyber currencies, property deeds, and durable commodities, but otherwise, I see it distracting a lot of great innovators.

What is one unique initiative that you've employed over the last 12 months that you're really proud of? We've recently incorporated Machine Learning into our continuous accounting platform to look for patterns in how our customers correlate their transaction data between multiple sources, and then leverage these patterns to support greater levels of automation in their processes. These patterns are hard to detect by humans, but when dealing with millions or even hundreds of millions of transactions, the patterns become clear to ML algorithms. We're very excited about the promise of further investments in ML across many other use cases.

Are you leading a digital transformation? If so, does it emphasise customer experience and revenue growth or operational efficiency? If both, how do you balance the two? We're a SaaS company, which provides a key platform for driving digital transformation for our customers. Many of our customers are on this journey. Typically, the motivations are around driving greater confidence in the numbers that the CFO relies on when driving the business or reporting to investors. The BlackLine platform provides a great amount of automation and integrity to support that. So while there is tremendous benefit to operational growth, it is even more important to support the trust and confidence the CFO needs.

What is the biggest issue that you're helping customers with at the moment? Some of the largest enterprises in the world depend on BlackLine for automating their accounting financial close at the end of each month and quarter. These companies typically have multiple ERP systems - in some cases dozens - spread across the globe in their business units. One of the complications they face is on consolidating their numbers across all these ERPs into a single enterprise view, which requires cross charges and journal entries between units, often in multiple currencies, and with tax implications. We've introduced a product called Intercompany Hub, or ICH, which helps them manage this complexity.

How do you align your technology use to meet business goals? I believe in outcome-based planning. Everything we do ultimately needs to drive the business forward, so I work backward from the desired outcome. Initiatives and investments all flow from the business goals you want to achieve. That in turn drives budgets and headcount. 

It's important though to make sure the business goals also include a long-term view of talent, efficiencies and scalability. So investment in modernising architectures and technologies needs to be included. There's a common model I use called a 60-20-20 model, where 60% of the capacity drives new capabilities, 20% drives reducing tech debt and modernising architecture, and 20% drives "run-the-business" investments in keeping the lights on, managing unplanned requirements and defects.

Do you have any trouble matching product/service strategy with tech strategy? Product and Technology strategy are inextricably linked. Companies that separate ownership of these functions often run into challenges with politics, collaboration, organisational alignment, and processes. These can be debilitating and create a drag on a company's ability to innovate. Fortunately, at BlackLine, I drive both of these functions, so we've been able to achieve an extraordinary amount of alignment and focus.

What makes an effective tech strategy? A technology strategy is the foundation for innovation, customer experience, company growth, and profitability. The more effective it is, the greater the success in these areas. A technology strategy must first be an enabler that results in meaningful and well-defined outcomes, such as openness, cost savings, greater access to talent, or extensibility to new use cases. It must also be achievable and consistent. 

A strategy should not change frequently, as driven by the latest cool technologies that are announced almost daily. However it can rarely can be pure, since purity leads to disproportionally expensive investments in low-impact corner cases. Finally, it must be easy to communicate and clear to understand. Without clarity and broad consumption by the organisation, it will never become more than a PowerPoint presentation, no matter how beautiful.

What predictions do you have for the role of the CTO in the future? The CTO of the future will be much more than a great technologist. The CTO must also be a great business leader, who must understand the business deeply. By understanding both, the CTO will have the ability to simplify complexity, drive innovation, and have even greater impact on the company. But just as important, or even more important is that they must also inspire people to greatness and want to be part of the journey. In this role, the CTO of the future will take their place as one of the top executives in the company.

What has been your greatest career achievement? I've had the honor and opportunity to drive the cloud transformation of two pioneering SaaS companies at scale - Ellie Mae, and now BlackLine. The transformations have fundamentally changed the businesses in ways that allow moving faster, providing more innovative products, and attracting very talented people. And that has been extremely rewarding.

Looking back with 20:20 hindsight, what would you have done differently? I might have held onto my startup in Redondo Beach a little harder. Looking back now, we were on the verge of some very transformational technologies like OLAP, which was still years away at the time. We might have taken Cognos' place as the pioneer in that industry.

What are you reading now? I just finished reading Three Days in Moscow: Ronald Reagan and the Fall of the Soviet Empire by Brett Baier. It's an absolutely fascinating back story about Reagan's dramatic battle to end the Cold War.

Most people don't know that I… am a huge astronomy buff. Learning about the mathematics and intense physics inside neutron stars, quasars, and around quantum gravity has always intrigued me. If I had taken a different career path, I might have become an astrophysicist.

In my spare time, I like to…race cars on the track and participate in road rallies. I'm a big fan of supercars and going really fast.

Ask me to do anything but… Role playing exercises. I know some people find them useful for planning or conflict resolution but I'm definitely not a fan!

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