The CEO represents the power of the present and the past, for the opportunities of tomorrow, it’s the CDO. As the enterprises are trying to catch up with the Digital future, they are focusing more on what kind of leadership they need to guide their business in the new-age. So, more and more companies are finding that the Chief Digital Officer or CDO is the right choice. Although there are variations in the title, the duty of a CDO is to define the enterprise’s digital strategy and implement its cross-functional transformation into a fully Digital enterprise.
As organizations recognize the value of a digital strategy, many senior execs are asking what kind of expert it takes to lead the strategy. Well, that’s not the correct way to begin, instead even before they try to identify the right person to be CDO, they should determine what that person will need to achieve. What are the objectives of their digital strategy? Creating new user experience? Increase in operational efficiency? Entry into new markets? Cost reduction? Or some combination of the above? Every organization must be clear on its specific needs and strategic objectives and then appoint a CDO who can be a best fit to reach its goals.
So to take charge of leading the enterprise’s transformation you need a CDO who will be a strong base to your digital strategy. A CDO need not be a techie but rather a digital leader with all required skills to manage a lot of external as well as internal changes. Adding an Executive to a group of employees across the organization i.e., from IT, Marketing etc., and forming a mixture of talents helps the CDO in the business and at times to build out new revenue streams or new businesses and enhancing the existing ones. In short, they will be in charge of Digital Transformation in an enterprise.
But, Why do you need a CDO?
The answer to this question will very much depend on the size of your organization and the sector it operates in, as well as its current position of digital development.
“Only 6% of companies have a chief digital officer, which in part is explained by the fact many businesses are too small to require such a position. Contrast this to the proportion of businesses with another type of CDO, the Chief Data Officer, which Gartner estimates will reach 90% by 2019.”
Companies bring in a CDO for two main reasons:
All the enterprises are being pulled into the digital age. Users now expect seamless experiences with online products and services and they will tend to leave behind businesses that aren’t meet their digital expectations. As Digital’s importance has come to limelight and a stage where every organization is ready to face digital, the role of a CDO has become more prominent. This year, there were many enterprises who appointed CDOs for the first time. When the role of a CDO is pushing its way into the the boardroom, the CEOs realize how intimately tied digital and corporate strategy now must be. If your organization doesn’t make the right move or hire the right talent, get ready to be outwitted by your challengers.
“A recent PwC’s study on the CDO role found that the position has been implemented primarily at organizations in consumer-focused industries such as media, entertainment, food and beverage, and consumer products. The study also suggests larger companies are ahead of the curve with CDO positions.”
Any large enterprise which doesn’t already possess a digital approach in its DNA or If you’re not Apple, Google or a tech company, you should be looking at bringing in a CDO. Not only a large enterprise, a startup which wants to take a leap towards the digital future with right strategy can also have a CDO. Having a CDO to an enterprise is an asset to the company. CDOs help their organizations usher in the digital age, or guide them through some digital transformation.
The focus on Digital transformation is charged by concerns that organizations are not responding to market challenges quickly enough thus missing out on chances presented by a swiftly growing digital economy. Hence, calls for hiring of a CDO often rise from insecurity about an enterprise’s digital future.
A CEO might not be digital enough to run the company as if it was one of the leading businesses. There has to be a strong partnership between a CEO and CDO to avoid awkward situations and perhaps even tensions.
However, the CDO role has been around for some time, but the position evolves as the C-suite becomes over crowded. The CDO identifies the key areas where digital transformation can drastically improve the user experience and must drive that change to happen in the organization. Having an immense knowledge about most IT functions of the organization, given that today’s tech management is drifting into the cloud, the role of a CDO is a natural next step for digital transformation.
Finally, whether or not your organization needs a CDO will depend on whether digital is the norm or not in your organization.
Capabilities of a CDO
The role of a CDO is more transformative and usually finite. The CDO is brought on board to guide the organization through the digital transformation storm until such time as digital has been fully integrated into the operations and thinking of the organization. The shift to digital has made the job of the CDO even more multifaceted. The job of the CDO is not one of revolution, particularly within larger organizations for which change is more frequent- rather ensuring the company sticks to its vision.
Of course the CDO can’t transform the organization all by himself. It needs a team to get things done right. And it will be the CDO defining what needs to be done and the CIO determining how to make that happen to achieve Digital transformation. But in conclusion, the rise of the CDO across all organizations appear to be moderate after the breakout year of 2015.