Are We Seeing the End of the Chief Digital Officer?
As specialist executive search consultants that recruit digital transformation leaders, recent conversations we have had with our clients and colleagues around the world have revealed emerging trends regarding the Chief Digital Officer (CDO) role.
In recent years, the CDO has been a staple in recent organizational strategies by companies who are looking to improve their digital processes. Ultimately, however, the CDO may be an unnecessary addition to the management team, with overlapping functions that make the role ineffective and redundant.
In theory, the CDO role is one that was created to spearhead the transformation of the digital side of the organization. According to McKinsey in 2015, “The CDO is now a ‘transformer in chief’, charged with coordinating and managing comprehensive changes that address everything from updating how a company works to building out entire new businesses”.
Fast-forward three years, however, and the role of the CDO is in decline.
It is not that organizations no longer need to make the shift from analogue to digital—it is that the role of the CDO is now recognized as being superfluous.
As Theo Priestley explains in his Forbes article, the role of the CDO, including “the common requirements and traits defined as part of a CDO role” overlap with a number of other roles that are already performed by the role of the CMO, CIO and COO. The CDO’s role can often overlap with the Marketing or Technology programs as well.
Ideally, the CDO would be focused on transformation and innovation, championing the consumer, pushing adaptability and agility within the organization, channeling collaboration within the organization and developing digital marketing programs.
These areas of focus, however, can conflict with the other organizational leaders who are focused on the same things. Many critics of the CDO explain that the role of the CDO would be better addressed by the CEO—since digital is no longer viewed as being a separate department within organizations.
Being digital is not about having a strong singular strategy that works within the organization. Priestley explains that, “while it has become the fashion for analysts and vendors to place the word Digital in front of traditional terms we already know, the reality is that deep down it does not fundamentally alter how we conduct business, manage transformation, or look at how we engage with our customers which explains why it has become so hard to define the Chief Digital Officer role and fulfill the position”.
Digital is an all-encompassing mandate in today’s market, where organizations at every level should seek to integrate a digital mindset into every level of the business. As McKinsey explains, “many companies are focused on developing a digital strategy when they should instead focus on integrating digital into all aspects of the business, from channels and processes and data to the operating model, incentives, and culture.”
When the role of the CDO is assigned within an organization, it may show a weakness in the leadership of the organization and a lack of understanding of what “digital” actually entails. The role of the CDO is potentially a weak one with little power, where the majority of the work is being handled by other leaders within the organization in a more efficient manner.
As Members of IIC Partners, being able to connect with our global network about developments in this area has uncovered a shift in global trends, with the CIO role given more responsibility when it comes to the overall digital strategies of organizations. New technologies being integrated into the organization must be stable and have a high ROI, which can only be achieved if the organization integrates technology throughout every level of the business—this is something that the relatively empty title of CDO may be unable to accomplish effectively.
We are able to advise our clients on their talent management strategy, and to assist you with your search for digital transformation leaders. For more information, please call Janet Labberte (Managing Partner, Cape Town +27 83 229 8770) or Carilyn Oxley (Managing Partner, Johannesburg +27 83 601 2500).