Company wide changes supporting the digital strategy: Part 1, C-Level impacts.

Introduction

My previous post covered some non-technical challenges behind Artificial Intelligence development, and some of the readers were particularly interested to know more about the new roles appearing, disappearing, or evolving, which are not exclusively technical but all around the company structure, from the C-level to the executing teams. This is the first of a multi-part post covering the following topics:

Part 1: The digital impact to C-level structure.

Part 2: Execution Strategies: army vs squad teams!

Part 3: New jobs and skills behind AI development.

Part 4: The role of the Company Culture in the Digital Strategy.

Part 1: The digital impact to C-level structure

The current digital disruption is detonating company-wide changes moving from the C-level to the execution teams. The final goal of these changes is to enhance, or even reinvent, the company business model by taking advantage of the digital opportunities posed by the emerging technologies such as Artificial Intelligence, IoT, Big Data, Automation, among others.

Having the full company talking about the adoption of these technologies makes necessary to include the C-level in the discussion as a strong sponsorship, which in fact, is the cornerstone of a successful digital strategy and ensures that the digital efforts are aligned with the company objective, avoiding merely technical exercises without business purpose and value proposition. 

When developing mature technologies, the technical challenge and the business alignment is manageable; however, when discussing immature technologies, such as Artificial Intelligence or Blockchain, it is necessary to have a leadership with the proper mindset, risk-taking mentality, and the required skills to adequately mature and capture their value proposition. Following this purpose, multiple companies are evolving their leadership roles or creating new functions at the C-Level. In Particular, the IT leadership is changing from a support area to a business partner with the required skills to add extra value to the existent business model and prepare the organization to face a changing business environment.

A common approach is the evolution of the Chief Information Officer (CIO) and the Chief Technology Officer to the Chief Digital Officer (CDO). The technology and information departments are no longer in the shadows of the company but are becoming a business partner with an attractive value proposition. The traditional approach of a CIO (CTO) previously focused on internal (external) IT infrastructure and software support is quickly evolving to a CDO with different leadership goal, mindset, skills, and responsibilities. In addition to the traditional IT matters, the modern CDO is responsible for capturing the value proposition behind the digital investments and work to create the proper digital culture to face the quickly changing business reality.

Other companies are taking a slightly different approach by extending the CIO/CTO/CDO level with more specific, but complementary, roles, such as the Chief Data Officer (CdO to avoid confusion with CDO) and the Chief Analytics Officer (CAO). The CdO being responsible for the governance, best practices, and data availability, while the CAO being in charge of the strategies to transform the available data into a tangible benefit for the organization.

Notably, and due to recent advances in Artificial Intelligence development, some companies are opening the door to the Chief Artificial Intelligence Officer (CAIO), which is responsible of structuring a robust and lasting AI strategy, consolidate the required development and scaling teams, design the proper AI infrastructure, monitor the advances in the field, and contextualize new AI business opportunities. To illustrate the relevance of the CAIO in modern days, Andrew Ng used an interesting analogy in a recent interview for Fortune Magazine.  

"100 years ago electricity was complicated and the VP of Electricity played a critical role until it became more common and understood technology"

The reporting hierarchy of the CdO/CAO/CAIO varies between companies, but usually, they report directly to the CEO or the CDO. Based on the thin line of expertise and responsibilities between these roles, a safe decision is to have them report to the CDO which have a broad digital role within the organisation. 

In general, each company must design its strategy and the structure required to achieve it, but what is clear behind these C-level trends is the importance that Digital, Data, and Artificial Intelligence is getting in the decision level of the organisations. As probably noticed, the described structures are only sustainable for large corporations with complex challenges in the digital strategy. For small and medium-sized companies it is a better approach to avoid unnecessary levels looking to exploit as much as possible the speed and the cultural advantages behind plain structures. 

The next post will cover the advantages and disadvantages of hierarchical vs plain structures as well as different execution strategies such as labs and factories.