January 19, 2016
by Chris Curran
As digital investments soar and technology permeates the enterprise, more companies are waking up to the importance of placing a single leader at the helm of digital initiatives.
Only 6% of companies have appointed a Chief Digital Officer to chart a course for digital transformation, according to PwC’s Chief Digital Officer Study. The problem isn’t the lack of CDOs, but the scarcity of digital leadership.
Overhauling an organization for the digital age is a daunting task. This leader must oversee the transition of operations, sales and marketing, systems, and production—along with the internal corporate culture and in some cases the company’s products and services.
Some corporations have a CIO or maybe a CMO who is taking charge of digital, but most do not. More than likely, executives with competing objectives are steering the organization in different digital directions.
For example, maybe marketing is communicating digitally to customers but the CIO is unaware of marketing’s agenda. As a result, employees aren’t empowered with the devices and data they need to walk marketing’s talk. In the end, brand promises are broken and potential revenue generation is lost.
“If digital is important to you, and you ask who is in charge of digital and you get more than one name, then you have to ask yourself who’s in charge,” said Baron Concors, the CDO of Pizza Hut, in a video interview about the responsibilities of the CDO role. “Having one person who’s accountable for driving the results and the organizational alignment around that is very important,” said Concors, who was formerly Pizza Hut’s CIO.
According to our Global Digital IQ survey of nearly 2,000 business and technology executives, 31% of respondents say their companies are investing more than 15% of revenue into technology investments that span all areas of the business, not just IT. Without a cohesive digital strategy, businesses will fail to extract the full value from technology investments.
The challenges of on-boarding a CDO
As digital investments soar and technology permeates the enterprise, more companies are waking up to the importance of placing a single leader at the helm of digital initiatives. Of the 86 CDOs the survey surfaced, 31 were on-boarded last year.
Introducing a new CDO requires working through some complex questions. How is the CDO role different from the CIO and CMO? What skills are needed? Among CDOs at top companies, more than 50% have a sales & marketing background; only 14% hail from the technology discipline.
Plotting roles and responsibilities is the primary step. For example, maybe IT retains responsibility for the systems for internal customers but the CDO gains responsibility for the external customer/consumer-facing technology. Maybe marketing drives all campaign planning and design, but the CDO is responsible for all of the campaign delivery and measurement in the digital channels.
Can a CIO step into the CDO role?
Sometimes the CIO will be a natural fit for the CDO role and other times not. B2C industries such as retail or travel must have a digital leader with deep knowledge of customer service, sales, and marketing. CIOs in more industrial and B2B industries are likely more suited to the CDO role.
However, even in the B2B industries, the CDO role is about creating new and better human-technology experiences. A would-be CDO must also have an enthusiastic appreciation for emerging technology evaluation, user experience design, mobile and IoT-based strategies.
Creating a new CDO role may or may not be necessary. What’s essential is creating a cohesive digital strategy that aligns the top, bottom, front and back of the business. The journey to discovering your organization’s digital leader begins with one question: what does digital mean to us?
Image shared by nwhitford.