I see that many managers or (even CEOs) running an IT company do not perform as well as those who have IT background. If I may take an example (without judging or pointing fingers), Microsoft's current CEO is one among many. I also see this in some smaller organizations.
Should a manager (or CEO) in an IT company have an IT background to perform in the organization? Will a manager that has an IT background perform better than those who do not?
Counterexample to your examples: Apple's CEO is doing a pretty good job.
There is no secret sauce. Some people can manage well, and others can't. A good manager can do a good job with a superficial knowledge of the subject matter. A bad manager can't do a good job, even if they're an expert. The absolute worst case is a manager who knows enough to be dangerous, without knowing enough to be humble...Good or bad, they're going to be trouble.
The CEO of a company is the head of the company. It doesn't matter whether it's an IT company, a bookshop, or a fast-food chain---they require a similar set of skills in order to provide direction and oversee everything. (I'm assuming the company is large enough that it contains some sort of middle management that are well versed in the company's day-to-day work.)
While it might be nice for a CEO of an IT company to have an IT background, I don't think it's a requirement. They're not going to spend their time writing code or documentation of an API for fun.
The only implication I can think of is that the employees' attitude and perception of the CEO would be unconsciously swayed (i.e. they would be more likely to respect the CEO, believe the CEO understood their daily work).
Does a manager in a tech company need a tech background?
NO.... but....
Non-technical people should not be making technical decisions. Its perfectly reasonable for person with a non-technical background to run a company or department. So long as they are delegating the technical decisions to the people that are qualified to make them.
In larger companies, a technical CEO isnt as important. Steve Ballmer isnt going down through the cubicles telling people how to write code. He has technical managers across all levels of the corp who he relies on to make those decisions, while he focuses on the financials.
On the other hand, when non-technical CEO's/managers/owners start micromanaging subjects over their head, failure will be lurking very nearby.
There's lots of variables and company structure/cultures/what-have-you but from my personal observations, I've always felt that it depends on what the company needs from a CEO, which is often related to its size.
In small companies and startups, you generally need to have the CEO be very technical; so much so that you work with her more than for her because aside from needing to get seed money, the CEO is a ground level grunt trying to get things done.
Once you move up to medium sizes, you generally need the CEO to have organizational skills as they will start directing the product/project in a management capacity. Often they still code a fair bit, but it is becoming less and less as success sets in.
Once the company starts getting larger, the CEO will require less and less technical ability and more and more people skills. Creating and enforcing the vision within the company while creating and maintaining an image of the company externally. At this point, financial decisions become more significant as things like plant & property, staffing, employee turnover all become investments. There's little to no HR or Accounting yet. Additionally, I've found that legal issues are always popping up at this point (not necessarily in a negative way, but there's more lawyers to talk to I noticed... patents, employment contracts and all that)
When you get to the point where the company is large, then you need longer-term strategic thinking which requires more management, planning and people skills. I also noticed at this point most CEOs I've known start working with other companies as opposed to producing something for them, or purchasing something from them. So there's more schmoozing.
At the huge level... I have no idea. It's a different breed of person that I've never met.
TL;DR: Yes; but there comes a point when the company is large enough that just managing the company as an entity and the individuals within it takes up more time than a CEO will have. Then managers get hired and the CEO does other... stuff... (I haven't personally known any people who were CEOs of companies that large, so I don't really know well what they do).
I'm not sure past experience matters as much as just plain understanding what their company does/makes/sells. Sales people can seem to get away with not completely understanding their product(s) but for a CEO to be truly effective he/she needs to fundamentally understand the technological advantage his/her company offers.
I really do not think that taking Gates or Jobs as an example is relevant today. They were dirvers in the tech revolution and were IT-aware. Hell, they created IT! But if you were to take a non-IT CEO and give him charge of a company and a technology which they do not understand , dont expect them to make a revolution
I think it depends on the person. Most of the responsibilities of a CEO don't differ that much whether you're in a technical or non-technical company, so there is no direct need for a CEO to have technical background.
However: If tough choices have to be made, and/or if an the organization itself has to be changed, then it definitely helps if the man on the top understands what the needs of the people "down there" are. A CEO always needs good advice from other people. The more he knows about what these people are talking the better he make his judgements.
So, in a perfect world, where everybody is a top-class employee, the company works really well, the customers are paying on time and you don't have any pressing issues, a non-technical CEO will do just fine. When problems arise that non-technical CEO might do just fine, too - but I think the chances will be a lot better if the guy on the top knows what he's talking about.
Gerald Weinberg said in one of his books that the skills required to be a great programmer and the skills required to be a great CEO were very similar.
Note that he wasn't saying that programmers make good CEOs. He was saying that the skill set was similar. Unfortunately, most programmers don't have the sociological and political skills to rise through the ranks.
The CEO of any organization has to understand what his organization does well enough to satisfy customers and motivate employees. Any more technical knowledge than that is a bonus.
Once, I worked in a government data processing department. The best director we ever had was completely non-technical and knew it. He got his information and technical education from us. He trusted us, tried to get us what we needed, and things in general worked well.
On the other hand, consider Steve Jobs. When he rejoined Apple, some analysts were seriously saying it was time to liquidate the company and give the proceeds to the stockholders. Now, it's the biggest computer company around in market cap and revenues, and last I saw edged Microsoft out in quarterly profits.
Jobs did it by deciding what he wanted, realizing what of it could be accomplished, and doing everything possible (including bullying) to get his people to produce it. His success depended a lot on his taste and ideas, and his ability to realize what was impossible and what wasn't quite.
For a company to do reasonably well compared to past performance (like Microsoft; very big but very limited growth prospects), it has to have a competent CEO. To perform spectacularly, like Apple or Google or Facebook, the CEO needs to have a vision, and the vision needs to be largely achievable. In order to pull that off, the CEO needs to have a good idea as to what's possible and what's not. That will usually require some technical knowledge, even if not actual proficiency.
For running a high-tech company that's already established, a non-techie can be CEO with no problems. For spectacular success, it really helps to have a CEO who's technically aware. I'd be really, really reluctant to invest in a high-tech startup that was run by non-technical people.
There is a difference between the two. (CEO and Manager)
The CEO is in charge of things that are much different the technology. They are responsible for the livelihood of the business. Their main focus is business. Whether its technology or textiles, the job of a CEO is similar.
Managers on the other hand, manage the day to day business within the organization. If you have a group of technologists, you need someone who has a technology background to manage that.
The problem we have today is that to many companies have the old "Industrial Age" management styles. To them quantity and speed are the most important. But we don't stamp out the same widget every day.
What we need are managers who fall more into the category of "Journalistic Managers". To them its quality and accuracy. There is no end to the products we create, only milestones. Like a newspaper, you do not write one article and sell it every day. You have to continue to write new articles every day. That is what we do as coders / developers.
So, in short, the answer is:
A CEO does not necessarily need the background.
A manager should.
There is no guarantee that a manager (or CEO) in an IT company who has an IT background can perform better. It is more about striking a balance between managerial skills and technical skills. A manager who comes from a non-IT background might be interested in technology though he/she may not have had any hands-on. On the other hand, it's hard to say that a manager with IT background will perform better unless that person is a visionary on his Company's products/services and has managerial skills as well. So, it has a great deal to do with the Manager's soft skills, technical skills, clarity in vision and in action. No one skill can be isolated. Skills for managerial roles needs to be considered in total and not in isolation from other supportive skills. It's a matter of perception that a manager with IT background will perform better because, the trust factor in such a situation is high.
