A Chief Digital Officer (CDO), or a Chief Digital Information Officer (CDIO), is a position held by an individual who helps a company drive growth through the conversion of traditional 'analogue' processes to digital ones, using modern online tech and data.
A CDO sounds like a piece of 80s retro-tech that combines audio, visual, gaming, a magic glove, and some amount of LED flashing lights. Sold 4 units in Finland, the rest were thrown into a hole in a desert.
Luckily, for the environment, and unluckily, for retro-tech collectors, this isn't the case. Instead, the position of a CDO is something far more exciting.
First up, we need to remove any aspersion around the Chief Digital Officer position (CDO) and 80s clunky nostalgia: the CDO is a super new, flashy, modern role. Think the sleek chrome of Apple, not the thick plastic of Atari.
In fact, back in 2008, there were probably no more than about a dozen CDOs worldwide. By 2010, that number had quadrupled, although it was only about 50 positions worldwide. Then, in 2015, it jumped to 2000 and continued to grow. This saw 2017 seeing 19% of global companies having a position filled, 60% being hired since 2015.
The growth of the CDO in Europe, the Middle East, and Africa, has consistently outranked the rest of the planet. with around 38% of top companies in these EMEA countries having opened a position for the role. The second on the list is North America, where roughly 23% of the top organisations have appointed a CDO.
So, let's make like a crappy best man's speech and start with some definitions. Webster's Dictionary defines a CDO as:
What is a CDO?
A Chief Digital Officer (CDO), or a Chief Digital Information Officer (CDIO), is a position held by an individual who helps a company drive growth through the conversion of traditional 'analogue' processes to digital ones, using modern online tech and data.
This shift, referred to as digital transformation, can entail major changes to a company's technological architecture, business processes, products, and job roles, and can take a hell of a long time. So, strategic leadership and managing change are key to the change and the role and are spearheaded by the CDOs themselves.
These individuals put a special focus on creating new value through the smart use of digital tools, platforms, technologies, services, and processes.
What is (Also) a CDO?
CDO can also stand for 'Chief Data Officer', which is another C-Level executive. However, this individual is responsible for a company's data use and data governance. The person in this role is expected to guide the business n its ability to gain maximum value from the data available to them.
Another new position within an organisation's leadership ranks, its position in the job role chart varies. The CDO can often report to the CEO, but frequently reports to the COO, the Chief Operating Officer, or the CFO, the Chief Financial Officer. Less frequently, they may report to the CTO, the Chief Technology Officer, or the CIO, Chief Information Officer.
In many cases, the Chief Data Officer works closely with the Chief Marketing Officer, to use data to improve customer interactions, support customer experience, and drive sales.
What Should Businesses Look For in a CDO?
According to Adriaan Bouten, CEO of Digital Prism Advisors, there are 5 things to look for in a Chief Digital Officer, including:
- Being a great storyteller. Many individuals in this role come from a PR, marketing, or communications background, which fits the CDO position to a T. Adriaan thinks the CDO role should be filled by technology outsiders, who know where tech innovation fits best and can tell that story.
- Being an innovator. This involves straddling the line between technology and business. They must understand both product innovation and process innovation.
- Understanding new tech trends. CDOs must be up to date with all the biggest and best trends and products and push their companies to stay aware of what is current, and what is upcoming.
- Executing their digital strategies. These individuals will potentially take responsibility for transforming an entire business model. So, they must have deep technical knowledge, product management skills, change management abilities and powers of persuasion, to help them remove any resistance to change.
- Having influence. The CDO needs to get others to buy into their vision, be it other execs, the board, staff, vendors, and even the competition and other industry leaders.
Responsibilities of the Role
The CDO has a number of different daily, and monthly, responsibilities. Each step brings the company closer to utilising its tech to the highest potential, so each task is vital. So, these can include aiming to:
- Work with teams across the business to generate innovative digital solutions
- Act as a thought leader who articulates the digital future of the enterprise
- Oversee the execution of digital initiatives
- Own and centrally monitor the digital innovation project portfolio
- Work closely with HR to attract and retain top talent
- Build, manage and continue to grow an internal and external digital innovation ecosystem
- Ensure that all relevant digital initiatives are fully integrated into the strategic-planning process
- Resource allocation and execution
- Drive the move toward an insight-driven organisation that leverages the power of data
As a result, CDOs have to be well qualified and highly skilled. So, these individuals may need to fit within the following specifications:
- Min 5-7 years of experience in a similar role designing and launching digital platforms
- Proven track record of leading successful digital transformation projects
- Understand core business processes and associated technical solutions
- Have an innovative and disruptive mindset
- Experience leading a digital team
- Proven influencing and collaboration skills
Chief Digital Officer vs. CIO vs. CTO
According to Gartner, the CIO differs from the CDO and CTO in this way: they oversee the people, processes, and technologies within IT to ensure the team delivers outcomes that support the goals of the business.
The CTO, on the other hand, is responsible for managing the physical and personnel technology infrastructure and for managing client relations to ensure that service objective expectations are met.
Both of these roles can take responsibility for digital transformation within a business, especially if the individuals in the positions have both business and tech acumen and knowledge.
“My perspective is it’s all kind of merging together,” says Mike Giresi, the chief digital officer of Molex, a manufacturer of electronic, electrical, and fibre optic connectivity systems
“The role of the CIO at Molex before was SAP; it was really around transaction processing,”
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Some even suggest that the CIO is the manager of continuity, whereas the CDO is the manager of change. Poetic. Having both of these roles offers a perfect balance between rapid technological change and the continuity of the current business. This is why the roles have now separated. However, there has been a move to bridge the gap between the roles, which could potentially see the CDO role becoming obsolete in some cases.
The future might even see the shift of the CIO role to a more modern position, due to the rising percentage of tech spending across the board. This tech is now managed outside of the traditional IT function, which would require the CIO to step in. However, it is rare for an executive to excel at both ends of the business spectrum, so CIOs tend to find themselves focused inwards on the company's current operations.
The CDO, on the other hand, are often looking outwards, to new business models and revenue streams. So, the balance of these two perspectives is highly difficult, as they require radically different perspectives and skills.
Where Does the Chief Digital Officer Fit in the C-suite?
More often than not, the CDO reports to the CIO or the CMO. But when the Chief Digital Officer must fulfil a more visionary function. they tend to report to the CEO or even the COO.
Ragu Gurumurthy, chief digital officer and chief innovation officer at Deloitte, argues that other technology executives should, in fact, report to the chief digital officer.
When it comes to tech decisions for products, the chief digital officer should work with the CTO, and when it comes to internal processes, he or she should work with the CIO.” The chief digital officer should also work with the chief talent officer when it comes to hiring the skills needed for digital transformation, he says. “The chief digital officer becomes an orchestrator who sets the vision and goals(…)
You have to have a seat at the table to influence the CIO, CTO, and chief talent officer, to be a real peer. Otherwise, you won’t succeed.”
This had been proven to work in a number of companies, including in the case of one global engineering company. After struggling through a couple of years of tension caused by the addition of a CDO to their chart, they decided to flip the reporting lines.
This meant that, where the CDO initially reported to the CIO, the roles were reversed. So, the CIO reports to the CDO, who then reports to the CEO. The entire business, in fact, has gone on to appoint digital officers in all its business units, who report jointly to the business unit leaders and the CDO.
In a few companies, in particular customer-facing industries, the CDO started out as an extension to the traditional marketing function, answering to the CMO and responsible for new digital activities such as social media, mobile apps, and the digital customer experience. About two-thirds of CDOs today still reside within the company's marketing function, while only one-third report to the CIO or CTO.
This post is part of our "What is a..." series, which compiles the top job roles in the martech industry today. Others include: