In recent years, many organisations have been hiring CDOs. This has led to some confusion between different roles within the organisation, and particularly between CDOs and CIOs. The two terms CIO and CDO are often used interchangeably, when actually the roles that these individuals perform in organisations differ. While there are some commonalities in aspects of what they do, there are also some important differences. CIO is of course the Chief Information Officer, while CDO is Chief Digital Officer. This means that it is important to have clearly delineated responsibilities to avoid duplication or conflict between the two positions.
The CDO role is a relatively new one within organisations. Some CDOs were starting to be seen in organisations in 2012, but as of 2015, only six per cent of the top 1,500 organisations had a CDO. Generally, early iterations of CDO roles involved a professional that was focused on ensuring that the digital customer experience was a good one. Since 2015, the situation has evolved somewhat, and almost a fifth of organisations now have a CDO in place. Two thirds of those were hired since 2015.
What does a CIO do?
The CIO is commonly responsible for overseeing the entire IT and/or technology of the organisation, leaving the CDO to work on one aspect of that — the digitisation. This means that the CIO ensures that the IT is operational while work is also undertaken to develop a digital strategy. What this means is that the CIO will typically focus on the technology that is already in place in the organisation, making sure that it stays up to date on those solutions, and adapts them as needed to keep up or keep ahead of the market. This includes oversight and making decisions about both software and hardware.
That said, it is also important to note that many organisations do not yet have a CDO, as indicated above. In these cases, the activities that the CDO typically undertakes may fall to the CIO — though in other cases, the Chief Executive Officer or Chief Operations Officer might pick up this role — it depends on the organisation.
What does a CDO do?
In most organisations the CDO is responsible for overseeing and managing the digital activities of the organisation. In this type of a position, it is important to be able to communicate well with business people, and those working in technology. Often, people that work well in these roles are those that bridge the gap between the two. As per the section above, it is often the case that the CDO reports to the CIO, and this role is often considered supporting to the CIO.
There are various aspects of what a CDO does that are considered critical to helping the business to achieve its digital goals. Importantly, the digital competencies need to be aligned with strategic imperatives. If those in senior management do not see the link or map the two together, it can be very challenging for sufficient support to be achieved for digital activities. The CDO also needs to act as the business owner for any digital process changes and improvements, considering how these may impact on different aspects of the business. The CDO must work on overseeing and monitoring progress on digital projects, making sure that they get delivered in a timely manner. Ensuring that there is return on investment and that digital projects meet their goals is an important element of this, as is making sure that the right talent is on board to deliver projects. Finally, the CDO also bears responsibility for ensuring that everything is prioritised as it should be. They also ensure coordination and collaboration between different departments towards delivering the overall digital effort.
All of this means that the Chief Digital Officer has a role that spans many areas and activities. The CDO needs to understand technology and see how this can translate into operations within the business. He/she needs to understand innovation and ensure that all digital activities are clearly tied to the overall strategies of the firm to ensure ultimate success. While the CDO role was initially rather sales and marketing focused, the position is now much more technology-driven. In the early days of CDOs, only 14% had a technology background, but now almost a third do. This makes sense given that it is typically technology that brings about digital transformation. This means that having the capability to understand the technology and to have an input in that regard is rather important to the organisation’s digital success, and thus, it is important to the role of CDO.
What I have observed works best in organisations is when the person in the CDO role is capable of wearing many hats. The best CDOs are those that understand the technology, but also have strategic capabilities and marketing competences. This ensures that the CDO can help take a transformational role in the organisation, ensuring that the business will be in an optimal position from a digital perspective. This requires understanding when the organisation will need to change to prepare for or lead disruption. This is also particularly important given the rapidly increasing speed of change. The person in this role needs to have a good deal of gravitas to be able to ensure collaboration between different parts of the organisation, and vision is needed to see where the technology and/or industry is going.
Finding the Right Chief Digital Officer
Renowned consultancy PWC has carried out research and analysis into the types of CDO that are useful for organisations, given their specific situation. Not all organisations require the same types of skills and activities of a CDO. This led PWC to come up with a number of different types of CDO. Choosing the right one is considered to be important for organisational success in the digital arena. Determining what is needed before hiring is also necessary to make sure that the CDO that is recruited will have the right combination of skills and know how. The five different archetypes are explained below:
The progressive thinker — this type of person is one that helps the CEO to think through how strategy should be developed such that the organisation can digitise. It stands to reason therefore, that this role is most helpful in organisations that have not yet benefited significantly from digitisation. Typically, this might be needed the most in industries that have not really taken full advantage of digitisation yet, such as manufacturing industry and the energy sector. The specific attributes that such a person brings are both expertise and inspiration, and they will work to shape the overall digital strategy.
The creative disrupter — this type of person is thought to be much more practical than the progressive thinker. They are considered of optimal help in organisations where significant and dramatic change is needed as a result of digitisation in their industries. Such a character may draw ideas from different industries and find ways to implement them creatively in their current organisation. Organisations where these types of roles are often found at present are in the retail and publishing sectors. Importantly, this CDO type will need to find ways in which the organisation can differentiate itself through digitisation.
The customer advocate — in this case, the name of the CDO type speaks for itself. This CDO will bring the customer to the forefront of thinking on digitisation. They work towards creating a seamless customer journey and engaging customers to the greatest degree possible across different channels, deploying strategy and technology to achieve this. At the present time, this type of CDO is most commonly found in consumer-oriented organisations, such as those in the travel or finance sector.
The innovative technologist — this CDO type is focused primarily on bringing in digital technologies to transform the business. They may also look at ways in which digital technology can be adopted to reduce organisational costs and increase efficiency. They do not necessarily look to break the mould with regard to what the rest of their industry is doing with digitisation, but rather they ensure their organisation can differentiate based on various aspects of the use of digital technology — such as competing on speed, for example.
The universalist — this type of CDO is focused on a variety of different areas relating to digitisation, and he/she needs a broad remit, power and support from the board to succeed. Activities may involve overseeing a range of different aspects of the digital operation, such as devising strategy, ensuring digital marketing is effective and increasing efficiency, among others.
The role of CDO is fairly new within organisations, and as such it is still evolving. It is often confused with the role of the CIO, but as has been seen, these roles are quite different, and the CDO often reports to the CIO. It is useful to consider the archetypes proposed by PWC if considering hiring a CDO, since what is needed from such a role is different from that of a CIO and may depend on the situation the organisation finds itself in. This impacts on skillsets needed of the role.
Originally published at https://www.linkedin.com.