Over the last couple of years you’ve probably heard some buzz about a new executive title known as a Chief Digital Officer, or CDO. And upon initially hearing this, perhaps you frowned a bit and thought, “Oh great, someone had too much time on their hands and needed an excuse to create another privileged position in the C-suite.” Some skepticism may be in order, but at the same time the digitization of business is the biggest player in town, and there’s no slowing this trend down. So let’s dig a bit deeper to understand what a CDO really does and if your business needs to hire one to keep up with the latest trends.
Let’s start with a definition. According to one source, a Chief Digital Officer (CDO) is “an individual who helps a company drive growth by converting traditional ‘analog’ businesses to digital ones, and oversees operations in the rapidly changing digital sectors like mobile applications, social media and related applications, virtual goods.”
When we talk about a digital business, think mobile, cloud, Big Data, social media – and the enormous ways these emerging and disruptive technologies have transformed the business landscape in the past 5 years. In other words, the CDO today has to manage the digital workforce and the transformations that come with it: think of the recent release of Apple Watch and the enormous information this will create, not to mention the Internet of Things and its impact on your organization.
So what should you do about the CDO; is it a position your business is ready for or can the CIO manage the same responsibilities? Here are some pointers to keep in mind.
Is your organization facing digital disruption? If you’re dealing with web, mobile, in-store digital, social, or e-commerce, then you’re a good candidate for a chief digital officer. A CDO has the particular management and technology skills to keep the user experience front and center of the emerging and disruptive digital landscape. This is a huge responsibility and there is expected to become a blurred line between the responsibilities of a CDO and a CIO, or CEO for that matter. So if you go with the CDO, expect some clarifications in the roles and responsibilities within the C-suite.
Does your company have a digital vision? How is your organization responding to the mobile era or the Internet of Things? What about the virtualization of work and remote communications and collaboration options? Does your company have an over-arching digital vision that unites its efforts together. For example, CVS had the ExtraCare card that would attach to a customer’s keychain and get scanned with every purchase to qualify them for specials and discounts. Well, now it’s available as a mobile app that tracks all of your rewards and connects you to the pharmacy for prescriptions. So, like CVS, your company’s vision may be to completely digitize the consumer experience so everyone can access your products, goods, and services on a mobile device. If this describes your organization, then consider a CDO.
Is digital the core of your business success? Is digital or digital related services becoming your fastest growing revenue stream? Or is an increasing amount of your annual budget spent on IT related expenses? If you can answer in the affirmative, then it’s a good sign that digital is fast becoming the core of your business, and a CDO can help.
How innovative is your company? While business and commerce is rapidly becoming digitized today and innovation is the key to survival, not all firms are there yet. For some more traditional organizations that are still getting their digital vision in order, bringing onboard a C-suite executive can be counter-productive and alienate a lot of people at the top. Don’t just hire a CDO because everyone else is doing so. Ensure that your company leadership and general culture is ready to support this new position and the recommendations and vision that will come with it.
Businesses are experiencing technological disruptions at a rate never seen before and it’s only going to get more intense. The CDO is a leadership position that reflects the new digital landscape. While there are a number of advantages to hiring a CDO, your organization will have to consider where it is on the digital divide and whether it makes sense to move ahead. Don’t just jump on the CDO bandwagon because it’s the trendy thing to do. Evaluate your digital vision and strategy and determine if your organization is facing immediate digital disruption. Depending on your company culture, having a CDO can become a make or break deal!