C-level roles have been established for many years in the key aspects of an organisation's operations: finance, information, technology, marketing and running the whole show as CEO.
But over the past few years a new C-level executive has started to appear at board meetings: the chief digital officer. The CDO is tasked with changing the way organisations work in the digital era. This is no small task, as was made very clear in a PwC Strategy paper published at the end of last year.
“[The CDO role involves] nothing short of transforming companies for the digital age, overseeing 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 themselves,” the report said.
McKinsey also made this point, referring to the CDO as the “transformer in chief". "[The CDO is] charged with coordinating and managing comprehensive changes that address everything from updating how a company works to building entirely new businesses," the firm said.
That's putting it nicely. Former Cisco chief executive John Chambers has been far more blunt on the issue, arguing that the survival of many organisations is at stake if they don't embrace the digital era.
"The companies that succeed will be those that embrace digital transformation and manage it right. They will be those that don’t get comfortable doing what works for too long and are willing to make those changes,” Chambers said last year.
However, as the PwC Research paper also noted, this is a huge challenge for a CDO made harder by the fact that “almost no-one arrives as an experienced CDO as the role has just begun to come into existence”.
The lack of definition of a major new C-suite role may seem unnerving for some organisations, but PwC Strategy claimed that this is just what’s needed to ensure that new thinking and new ideas make their mark.
“The CDO’s task is to bring changes to companies and their cultures, which many are likely to resist one way or another,” it said.
So, in short, the CDO is a C-level leader who has to completely change how a business functions in a role that has no clear definition and which did not exist a few years ago but is vital to the very survival of almost all organisations.
Leading the way
Three types of CDO
So how should an organisation creating a CDO role set about the task? Analyst house Forrester cited three key areas on which a CDO role should focus:
- Overall digital strategy
- Having responsibilities linked to digital success, such as web sales
- Bringing digital know-how to the executive level that is otherwise missing
This is a fairly open interpretation, and the specifics of the role are likely to be tied to the organisation's individual requirements when creating a CDO role.
Indeed, IDC analyst Jan van Vonno told V3 that there are three main types of CDO evolving to meet these requirements.
“The first is CDOs in consumer industries who are focusing their energies on customers and ensuring that new ideas benefit customers above all else. They generally report to the CEO and have their own team,” he explained.
“The second is CDOs in more business-to-business environments, where the CDO reports to, say, the CTO or CIO and is more about using technologies anywhere in the business to improve workflows.
“The final type of CDO is found in more conservative organisations that are perhaps less apt to disruption, but where the CDO plays the role of ‘digital evangelist’ to encourage new projects and ways of working that can improve investments or RoI using digital where relevant."
Organisations need to establish what kind of CDO they want and make sure the role is broad enough to have the necessary impact, rather than being too defined at inception.
Next page: CDOs and their impact
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