The Why, Who and How of Establishing a CDO (Chief Digital Officer) Role
A Look Back
Within the past decade, technology purchases by lines of business (LOB) without involvement from IT have risen exponentially in both volume and scope. In fact, IDC, a global provider of market intelligence, expects the trend to continue [IDC IT Spending Guide 2017] so that technology spending by IT and LOBs will equalize by 2020. This phenomenon is largely a result of many companies’ efforts to transform into digital enterprises due to customer demand, coupled with the explosion of cloud solutions. LOBs are no longer reliant on IT to support business requirements, especially front office initiatives. Consequently, the lines between the respective responsibilities of CIOs and CMOs are starting to blur while simultaneously paving the way to the growing popularity of a new chief digital officer, or CDO, role.
The CDO role has its origins in frustration as a reaction by CMOs to the slow response and expensive implementation of digital marketing initiatives by the CIO’s office. With the consumerization of technology, the proliferation of “As A Service” solutions in software and infrastructure, and the wide acceptance of BYOD (bring your own device), the CMO and other LOB leaders are procuring their own technology without involving IT to create a competitive advantage. Specifically for the CMO, the popularity of social media as the “go-to” source of information and collaboration for consumers has elevated digital marketing to become the most critical channel to promote brands and influence buying decisions. Previously outsourced to agencies, CMOs are bringing such capabilities in-house under the dominion of the CDO’s office.
What exactly is the realm of the CDO?
When hiring a CDO, how should the responsibilities be defined and boundaries drawn between the CIO’s and CMO’s realm of responsibilities? First and foremost, the CDO must be committed to the digital transformation of the entire enterprise. In other words, it’s not just about new contemporary technology deployment: it’s a new way of running the business. Professionals occupying this role can come from a variety of disciplines including technology, data, marketing, or consulting. Regardless, it is important that the CDO is aligned with the CMO, CIO and the LOB leaders on the transformation. The CDO is not only responsible for ideation and strategy but also for the education of the C-suite and the rest of the organization. In practice, the titles or the office leading the transformation becomes irrelevant. Instead, the enterprise needs to devote the necessary resources to hiring, training, and capitalizing on the new designated in-house digital chief.
Finding the needed skills
The building of a digital enterprise needs to originate in the CDO’s office. Finding the relevant skills for the hiring of a CDO is “almost” the easy part of the task, because those skills reside in IT and also in marketing. However, finding the combination of these skills within a single individual is a far greater challenge. Being an expert in the software development life cycle is only a piece of the puzzle. Expertise in user experience, creative design, and marketing are also critical skills. Poaching talents in the IT or marketing department may not always be a recipe for success. In fact, it is not uncommon to see a new digital team emerging as separate organization consisting of the “new cool kids”, those who can easily traverse between IT and marketing. So where do these cool kids come from?
Certainly, cross training is an option but may prove too slow especially in today’s competitive environment. On the other hand, abandoning that option is also not an entirely smart move since cross training can always benefit the enterprise down the road. After all, these talents are, in fact, hard to find. So instead, consider going outside of the enterprise to recruit new talents. To increase speed to market, engage a talent acquisition expert, at least until the digital team is established. Given the requirements for team members with such unique skills, it is best to give the task to those experienced in hiring “hybrid” talents. Some enterprises have internal talent acquisition teams, but they are often too busy with other priorities and lack the experience in sourcing, vetting, and hiring the type of talent the CDO office will need. So, bring in experts from the outside with the connections and credentials filling similar roles.
Change management on hyper-drive
As the team is being established, the CDO should begin the change management process in earnest, starting at the helm and down to the field-level staff of the enterprise. Even the most innovative ideas will fail – and most likely in a very visible way – without buy-in. Remember, the CDO will be introducing new leading, and sometimes even “bleeding”-edge products, and go-to-market strategies. Most likely, the CDO will guide the enterprise into uncharted territories and resistance may emerge in the most unexpected areas. Why? Sometimes it’s due to internal politics and territorial squabbles. Digital transformation is an enterprise-wide initiative and not isolated in the CDO’s office. This type of transformation by far is the most complex and impacts everyone in the enterprise. It forces the enterprise into different business models, new paradigms, and to depart from legacy thinking.
To get started, companies embarking on a digital transformation must first pick a champion. Is it a new CDO and is the talent coming from within or the outside? Then, plan how new “hybrid” talents will be brought into the enterprise. Will you build the skills internally through training or will you buy new skills from the outside to increase speed to market? Then, put the change management engine on hyper-drive. It will be a critical success factor.
About the Author
Jose has over twenty years experience in leadership roles for multinational professional services organizations and corporations including practice management, operations and business development. His Fortune 1000 industry experience spans financial services, insurance, consumer retail, healthcare and real estate.