In recent years, many organizations have been hiring CDOs. This has led to some confusion between different roles within the organization, and particularly between CDOs and CIOs. Some people are using CIO and CDO interchangeably. However, the roles that these individuals perform in organizations 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 delineated responsibilities to avoid duplication or conflict between the two positions.
The CDO role is a relatively new one within organizations. Some CDOs were starting to be seen in organizations in 2012. As of 2015, only six percent of the top 1,500 organizations had a CDO. Early iterations of CDO roles involved a professional. This individual’s focus is ensuring that the digital customer experience was good. Since 2015, the situation has evolved somewhat, and almost a fifth of organizations 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 technology of the organization. This leaves the CDO to work on one aspect of that — digitization. This means that the CIO ensures that the IT is operational while work is also undertaken to develop a digital strategy. The CIO will typically focus on the technology that is already in place in the organization. They make sure that it stays up to date on those solutions and adapts them as needed to keep up on the market. This includes oversight and making decisions about both software and hardware.
That said, it is also important to note that many organizations 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 will depend on the organization.
What does a CDO do?
In most organizations, the CDO is responsible for overseeing and managing the digital activities of the organization. In this type of position, it is essential to communicate well with businesspeople and people 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. This role is often considered supporting to the CIO.
There are various aspects of what a CDO does that are critical in helping the business. 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 in achieving sufficient support 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 oversee and monitor progress on digital projects and ensure that the delivery is on time. Ensuring that there is a return on investment and that digital projects meet their goals is an important element of this, making sure that the right talent is on board to deliver projects. Finally, the CDO also bears responsibility for ensuring that everything is prioritized as it should be. They also provide 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 the technology and see how this can translate into operations within the business. The individual needs to understand innovation and ensure that all digital activities are clearly tied to the firm’s overall strategies. 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 have input is rather important to the organization’s digital success. Thus, it is important to the role of CDO.
What I have observed works best in organizations 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 organization, ensuring that the business will be in an optimal position from a digital perspective. This requires understanding when the organization will need to change to prepare for or lead disruption. This is also particularly important because of the rapidly increasing speed of change. The person in this role needs to have a good deal of gravitas to ensure collaboration between different parts of the organization. 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 organizations, given their specific situation. Not all organizations 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 important for organizational 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 organization can digitize. It stands to reason therefore, that this role is most helpful in organizations that have not yet benefited significantly from digitization. This might be needed the most in industries that have not taken full advantage of digitization. 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 much more practical than the progressive thinker. They are of optimal help in organizations where significant and dramatic change is in need as a result of digitization in their industries. Such a character may draw ideas from different industries and find ways to implement them creatively in their current organization. Organizations 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 organization can differentiate itself through digitization.
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 digitization. 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 organizations, such as those in the travel or finance sector.
The innovative technologist — this CDO type is focuses primarily on bringing in digital technologies to transform the business. They may also look at ways in which digital technology can adopt to reduce organizational 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 digitization, but rather they ensure their organization 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 focuses on a variety of different areas relating to digitization. This individual 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. For instance, devising strategy, ensuring digital marketing is effective and increasing efficiency, among others.
The role of CDO is fairly new within organizations, and as such it is still evolving. It is different from role of the CIO. The CDO often reports to the CIO. It is useful to consider the archetypes proposed by PWC if considering hiring a CDO. This is because, it is different from a CIO and may depend on the situation the organization. This impacts on skillsets needed of the role.
Until next time, you are up to date.
Originally published at https://www.linkedin.com.