Why You Should Hire a Chief Digital Officer?

Our lives are changing faster than we can keep track of. Caught in the rush, we sometimes miss the obvious. 

Over my 20 year career, I’ve worked for many companies. The driving factor for the most successful of them has been intuition. These companies have prided themselves on their ability to work from the inside out. Many companies often fail in this regard. They imagine the market as a set of sub-sets, concentric circles. That’s wrong. Fatally wrong. I picture the market as a vibrant world. Today, an understanding of this organic and intuitionistic approach is imperative because it allows us to answer an obvious question.

What is digital? 

“Digital” appears everywhere! In front of job titles; at the beginning of mission statements and product offerings. It frames ideologies and business strategies. It characterizes a subset of customers. It’s so omnipresent for a word that most of us can’t even define. Sure, we use it. But are we misusing it? And if we are, how does that affect business success? 

So What then is digital?

To seek the answer to this question is to embark on a journey. And the answer will alter the way you think, live, and work.

I find that when trying to answer big questions, the best place to start is on the ground. Look to life rather than abstraction. Since this is an all too human question, let’s look around us at our fellow humans. 

One figure stands at the epicenter of the whirlwind of change that surrounds us. In fact, they are born of it and nurtured by it. The Chief Digital Officer. Attuned to the fast pace of innovation, an expert in advanced technology, a soothsayer of marketing, a business operations pragmatist with a flair for experimentation, and keenly aware of customer experience, CDOs are intrinsically transformational and they emerged from the need to cope with change.

So, if we understand the Chief Digital Officer, we will answer the question, “What is digital?”

Primary Job Duties & Function. As I alluded, the Chief Digital Officer’s role is an all-encompassing one. In a best case scenario, the CDO drives organizational innovation by devising strategy that address technical, competitive, regulatory, and social/cultural changes in the market. All this against the backdrop of looming disruption and our ever-changing relationship to social media and technology. 

CDOs are larger than life by necessity. The sheer breadth of technology in the world demands a global management scope and truckloads of digital production. It’s a challenge that requires a special set of skills bolstered by a holistic mentality. That is the essence of the Chief Digital Officer. It’s a juncture. A place of synthesis in the C-suite.

Market Shifts. CDO Summit reports that by the end of 2015 there were over 2,000 CDOs hired in just 5 years. The upward trend is attributed to a number of factors. The market is changing. Corporate culture is reinventing itself. Technology and means of innovation are relentlessly transformational. Consumer influence over corporate activity is growing. Big data and cloud technologies are gaining prevalence. Whether it’s one or all of these factors, it’s safe to say we aren’t in Kansas anymore. All this instigates boards and CEOs to show they are serious on digital transformation.

History. CDOs exist in part because of change and in part because of dissatisfaction with the performance of Chief Information Officers. CIOs are often charged with heading up tech initiatives and are responsible for growth associable to those initiatives. As technology advanced and penetrated all spheres of human life, companies poured more and more funds into tech initiatives. However, returns were a fraction of what was expected, and the blame fell on the CIO.

Although this is misguided, the fact remains that traditional CIOs view technology differently from a CDO. This disparity of view results in a disparity of approach. Technology is woven into the fabric of our daily lives. It is inextricably social. This calls for a vastly different approach and psychology throughout the C-suite and throughout the market. CDOs know this.

It is possible that despite the strategic advantages of a CDO over a traditional CIO, returns will remain dissatisfying. Yet, I believe that when a company decides to hire a CDO, they have often recognized something they hadn’t when they hired the CIO. That the nature of technology is not the same, largely because of the consumer. Consumers used to use technology; now they live it.

Companies that decide to hire a CDO are primed to accept this reality, and it fundamentally changes the C-suite tectonics and business objectives, which has direct effects on business success.

Digital Technology & Innovation. Nevertheless, some may wonder why this all means that CDOs should exist. You might ask yourself why traditional C-suite roles can’t meet growing demands.

To put it lightly, there isn’t time to mess around.

In the past, the objectives of improving digital competencies, increasing efficiencies, and researching new technological capabilities have fallen on the CIO. The two roles certainly overlap. However, there is a stark difference in mindset. The CDO considers competency, efficiency, and technology in the context of social activity streams, consumer behavior and the dictates of consumer preferences.

Companies are all on the brink of disruption everyday, with millions of dollars at risk, and enormous infrastructure. Who has the luxury of time to rewire the C-suite? It’s advisable to on-board someone who knows what to do and how to do it.

If “there isn’t much time” sounds reactionary, then you haven’t learned the digital revolution’s most enduring lesson: Disrupt or disappear.

CDOs tend to have expertise in data mining, data analytics, machine learning, sensors and other advanced technology that allows for sophisticated and automated systems. And yet, this technical knowledge is useless without a rigorous sense of business operations. That’s combination of technical and business a CDO worth her ilk should bring to the table, all while minding consumer research.

Consumer Behavior. In a sense, a CDO is a chimera with marketing, technology, user experience, and corporate strategy heads. And it isn’t enough just to understand these facets. The CDO-mindset must coalesce them to meet clear corporate objectives, all while cultivating trust amongst customers, because today’s consumers do not settle: they demand. They wield their social influence to direct the course of business activity, professional careers, and corporate outputs. The traditional C-suite roles were simply not created to navigate present customer culture. 

Corporate Culture. All that said, a CDO is not a saving grace. Yes, they are growing indispensable to corporate success, but the expectations foisted upon them must be realistic. If the company has a crumbling tech strategy or their digital technology efforts have either failed or stagnated, hiring a CDO may not necessarily pull it out of the thicket. The C-suite must work with the CDO in a new management style that reflects the positions ethos, which in turn reflects customer culture. Only then can a CDO do their best. 

I think of the CDO as a customer ambassador who connects companies to customers and vice versa. The CDO ensures that customer experience is brand consistent. To some more pragmatic C-suite members this might seem capricious. It isn’t. Customers today wreak havoc on companies by tapping into social media in just the right way. A tech strategy that controls the flow of information in the company’s favor by generating loyal followers, evangelists, and defenders—both outside and inside the company—should be a priority. That is the only way to stem the tide of negative PR when it comes rushing in. The entire C-suite must grapple with this idea. It seems most haven’t. That’s why it often falls on the shoulders of the CDO not just to justify their importance but also to educate fellow executives about how to leverage their positions using digital technology to further corporate objectives. 

For example, transparency and accessibility are virtues that rake in faithful followers whether you are a company or an individual. C-suites that prioritize their social media presence from the inside-out tend to gain favorability among their customers. This has widespread repercussions that protect them against disruption and attack. Even if a new product rolls around, the personal relationship you’ve cultivated can buy you added time with your customers before they move on to the younger alternative. Customer research and evangelism. I can’t emphasize it enough.

The True Measure of a CDO. Clearly the CDO is clearly a strategic and comprehensive role that overlaps with various existent departments. It encapsulates multiple competencies necessary for survival in the 21st century market. When a CDO steps into an organization for the first time, their goal is to digitalize every corner of the company as much as possible. By digitalize I mean integrate technology and people in such a way that the two become indistinguishable. This applies from business to customer, from employee to business, and from employee to customer.

As soon as every C-suite executive, every manager, every employee is immersed in digital technology, only then will the CDOs role be superfluous. In the meantime, they must find ways to disrupt industries from within, leverage social, local, and mobile technology, and deploy ambitious, and oft times experimental, digital strategies. There is nothing wrong with a little risk taking.

Who Needs One? The truth is not all companies need a full-fledged CDO. What all companies do need is a digital transformation strategy. Although some companies have yet to feel the consequences of the digital revolution, the tidal wave of change is impending. I recommend identifying whether the need will arise before it does. 

So, who needs a CDO?

If you are in a consumer-facing sector that has not yet undergone a digital transformation and boasts over 10,000 employees, chances are you need or will need a CDO. Remember that the CDO is a transitional role. Once all facets of the company are digitalized and a digital-first mindset ingrained, the CDO can reap the fruits of their labor from afar.

It is for that very reason that when we choose a CDO, we should be circumspect and forward-thinking. CDOs are not one-size-fits-all. Nor do they have the same education or experience. This is a new, emergent position.

How to Be Your Own CDO. As I said, CDOs don’t come one-size-fits-all, but they do come at a cost. On average, CDOs are making C-suite level pay rates. Your company may not be able to afford a CDO. That doesn’t mean you can’t learn the mindset and at the very least devise a practical digital transformation strategy. Sure it won’t be as sophisticated. However, there is so much information available online and there are so many resources, analytic tools, and expert anecdotes that if you truly dedicate yourself to self-edification, you can make waves.

Digital is A Mindset. The disadvantage for incumbents is that start-ups and young companies are born with a digital transformation mindset. In that sense they have a leg up on the competition. The reason being that they’ve grown up in the digital, social environment. They intuitively understand the connection among companies, digital technology, and the customer. Plus there is enough data about disruption and the rise and fall of tech titans for them to glean an insightful pattern. We have access to that same data though. 

Research has shown that digital transformation happens along the following lines: discovery, construction, industrialization, and transformation. The discovery period is about diagnostics; the construction period is about strategy; the industrialization period is about development; and the transformation period is about widespread digital initiatives maturing.

That’s what digital is. It isn’t solely a kind of technology. It isn’t merely a kind of person. Digital is an approach, a philosophy, and a lifestyle that infuses every aspect of our lives and of business infrastructure. Digital determines business success. It is the fabric of contemporary human life. We are woven into digital and digital into us, inseparably. There is no use bemoaning it. Everyday digital technology evolves more human connections. The only way to ride the rising tide is to learn how to swim. With a CDO, you’ll be sure to strike gold.