The rise of the Chief Digital Officer has so far been most noticeable in the USA with a number of large companies appointing them.
The perceived need for a CDO is typically to try and accelerate digital transformation and to bridge the divide that can exist between the CMO and CIO.
Gartner recently predicted that by 2017 the CMO will spend more on IT than the CIO. Much of that technology is for digital and ecommerce initiatives.
If the CMO is not comfortable with these new responsibilities, a CDO is seen as a solution.
Digital transformation
Only around five years ago we would constantly hear from our most senior digital subscribers that they were struggling to convince the ‘C-suite’ to invest properly in digital and treat it in the strategic manner it deserved.
Wind forward five years, with several recessions, numerous high profile bankruptcies and entire business models under serious threat, and the picture is very different. Digital’s ‘battle for the boardroom’ has been won. The case for investment in digital is not the challenge.
Indeed, the board have their shareholders breathing down their necks impatient for faster business transformation with digital the primary catalyst and driver.
The challenge, and the frustration, for larger companies in particular is the lack of speed of change. Executing on the digital imperative, innovating in an agile way, changing the culture: these are now the biggest challenges, not strategic commitment or C-level buy-in.
One approach some companies adopt to address these challenges is to buy a start-up in the hope that this will drive change. However, this rarely works out well as the clash of cultures is usually too great.
The appointment of a CDO seems to be another route companies are taking in the hope this will deliver the desired digital change. But I believe this is a bad idea. It is a short term sticking plaster over a more serious underlying problem.
It is essentially an admission of failure. A failure of the rest of the C-suite to be themselves digital enough, or a failure to empower the digital teams properly within the organisation, or a failure of the various business functions to work together to make digital happen.
Furthermore, as digital touches so many parts of an organisation, the only way for it to be ultimately successful is for it to be collaborative, and permeate everything, so concentrating authority into a single C-level position is counter-productive.
If a CDO is not the right solution, what is?
Digital is undeniably now a strategic issue rather than a tactical one and merits championing at the highest levels so how can digital transformation be achieved without a dedicated CDO?
Firstly, and most obviously, it should be possible to have C-level executives who understand digital well enough that there is no need for a CDO. There is a noticeable trend for executives with digital expertise being promoted not just to CMO but to the CEO role.
Jonathon Brown moved from Director of Online at John Lewis to CEO of M and M Direct having had various digital and brand marketing roles previously. Ashley Highfield became CEO of Johnston Press with a background of digital roles including MD and VP Consumer and Online UK for Microsoft and Director of New Media & Technology at the BBC.
Typically to make this jump candidates have had roles and responsibilities that are not just digital but across multiple channels and they need leadership, commercial and strategy skills. But this seems a far better solution than having a CDO?
Secondly, even if the C-suite themselves are not well versed in digital, not having experienced it first hand through their career, I believe it is beholden upon them to learn about digital. If this is the case then, again, there should be no need for a CDO in whom all digital knowledge and authority is entrusted.
Enlightened C-level executives, not just the CMO, CTO or CEO, but finance, HR and other functions are confident enough in themselves to admit they may not understand digital but are willing to learn. This learning may not just be the usual workshops, away days, digital immersion sessions, trips to Silicon Valley. It could also include having a digital mentor, or digital ‘buddy’ who may be quite junior, to experience digital first hand.
Thirdly, if the C-suite properly empower those with digital skills and experience who are perhaps one, or two, levels beneath them, then a CDO is not needed. Rupert Murdoch has gone on record as saying he feels too old to ever truly understand digital but he is smart enough to recognise its commercial importance and empower others in his organisation who do.
In many organisations now we are seeing those with digital expertise being moved up the ranks into multichannel and wider roles that surely position them for a step into the C-suite soon. Laura Wade-Gery moved from being CEO of Tesco.com to Executive Director, Multi-channel Ecommerce at M&S, joining the board in 2011.
Andy Harding has recently become Executive Director, Multichannel at House of Fraser having been in various digital and ecommerce roles previously. It is these kinds of senior managers, who understand digital and will become the C-suite if they are not already, that companies need, not a CDO.
In the early 1900s some companies hired Chief Electricity Officers because at the time electricity was so new and so important it was thought necessary to have someone at board-level oversee it. We can look back now and chuckle at the idea of a Chief Electricity Officer.
Perhaps Chief Digital Officers are the Chief Electricity Officers of our age?
Reader comments (25)
3:22PM on 21st March 2013
Interesting thoughts Ashley. The discussion of whether digital can be embedded across an organisation is clearly the right way to go in an ideal world. However, in the majority of large organisations, still matrix in nature in the main, this is just a long way off still. In these large orgs having someone at board level pushing the digital mantra is essential in my opinion.
A CDO should be responsible for getting the org to become digital by default, but expecting these orgs to get there without a very senior leader pusing for it is going to be tough.
I work with a lot of large orgs who don't have either a CDO or anyone on the board with digital creds (hence why they hire me). For these kinds of orgs, who currently are pulled and pushed around by agencies with contrasting objectives, it's a tough transition and one that will (and does) take time.
Great discussion starter though!
Senior Digital Technology Consultant at Capgemini
5:29PM on 21st March 2013
Strong words Ashleigh and I am in agreement on your conclusion that all of the C-suite need to suitably digital trained and minded.
Personally I think the appointment of a CDO should be because an organisation recognises the pace of digital advances and the commercial importance of digital. It shouldn't be a backstop to fill a knowledge gap within Executives.
The words digital and innovation are being used synonymously. Whilst this is true for the present time (as electricity was in the 1900s) it won't be always. There will be industry wide innovations in other areas and digital will become ubiquitous. Therefore perhaps the title should be Chief Innovation Officer reflecting the fact that growing organisations need to innovate or be disrupted.
David Sealey
8:26AM on 22nd March 2013
Good article and one with which I personally agree completely. I'm asked about the CDO a lot in my current analyst/advisory role and I think its a superficial, badly thought through position. Digital can't fall into the domain of a single C suite executive, it touches marketing, operations, customer service, product and services, everything. It's why I also have little time for the manufactured CMO <> CIO "split" that gets way too much airtime at the minute.
8:44AM on 22nd March 2013
Agree with the article and DaveJ's comment. I'm currently working with a CIO client who is obsessing over how to become the CDO and how to position himself with/against the CMO...etc..etc. I keep telling him he's missing the point, but its not helped when so many articles around aimed at telling the CIO why he should want to be the CDO!!!!
9:30AM on 22nd March 2013
Who is the "I" in this article?
Senior Business Consultant at LBi
9:32AM on 22nd March 2013
Interesting article and points well made. I am in absolute agreement that digital needs to be collaborative and permeate everything that a company does. But this does not happen overnight, it is a journey and requires leadership to happen. Whether this means a CDO role is required as a discrete position is fair enough open to debate, but what is needed are digital evangelists, individuals who lead by example, who galvanise commitment to change and who ensure change happens. Unfortunately in the real world, spontaneous collective responsibility is rare. Personally I feel there is space for a CDO type of role but not as an empire builder, instead as a leader of digital change and direction.
CEO at Econsultancy
9:35AM on 22nd March 2013
@tomT - The I is me the author
@Robert - I agree except that I think a Head of Digital/Online or VP E-commerce or Group Digital Director or whatever it gets called (the most senior digital person) should be able to do this if properly empowered by the C-Suite?
Senior Digital Technology Consultant at Capgemini
9:40AM on 22nd March 2013
Think my first comment has been lost in moderation.
I agree that CDO is a transformational role and could therefore be fulfilled by other senior management. The larger issue that businesses are facing is not simply how to do digital but how to innovate against market trends using digital as a medium.
Personally I'd like to see the rise of the CInO (Chief Innovation Officer).
Senior Business Consultant at LBi
9:41AM on 22nd March 2013
Ashley - 100% agree with you there, digital transformation has to be empowered from the top and if a Digital Director role already exists then fantastic. I am interested though to see how the CMO/CIO technology debate evolves. I'm advising a company right now on just such a situation.
CEO at Econsultancy
9:47AM on 22nd March 2013
@David - yes, your first comment got auto-binned as spam but I've resurrected it so it's now there. Innovation, and how large companies innovate, is a huge topic in its own right ('intrapreneurs' etc) but, again, I'd say if you need a Chief Innovation Officer then you've failed to instil a culture of innovation. Innovation isn't something that you need now, but not tomorrow etc. I always think it's dangerous to have 'innovation' in your job title - people don't tend to survive too long with that!
Senior Business Consultant at LBi
10:09AM on 22nd March 2013
@Ashley - yes innovation is a culture and part and parcel I believe of a digital organisation. Introduction of agile dev principles and licence to experiment will go along way to creating the right environment for ideas to flourish. As does getting rid of annual budgets/plans and working to 3 month cycles and creating multi-functional semi autonomous customer focused teams who adapt to market forces through interpretation of principles rather than working to rules and processes.
Marketing Professional
10:14AM on 22nd March 2013
Creating new roles like CDO is totally missing the point. It reduces the credibility of 'Marketing' and the people calling themselves marketers.
Abdicating digital marketing to a CDO role (and team) is counter-productive and just means Marketing gets taken less seriously. Quite simply anyone who calls themselves a marketer needs to understand their craft in it's entirety; digital Marketing included. It's called being a professional marketer.
How come SME's manage to handle digital as part of the marketing remit without the need for new roles? Just a thought.
Enterprise Sales at ExactTarget
10:38AM on 22nd March 2013
Your article rings true, as with David J's and Alan S's comments, digital (whatever form it takes) needs to be embraced by all it touches in every part of an organization. Governed by one (the CDO) is a sure-fire way to stall digital evolution in an organization in my eyes.
10:57AM on 22nd March 2013
"as digital touches so many parts of an organisation, (...) concentrating authority into a single C-level position is counter-productive." In that order of ideas, everything within an organisation is counter-productive, Finance, Operations, Marketing, etc, etc...
Senior Partner at Rockford27
11:03AM on 22nd March 2013
I tend to agree with Ashley, a Chief Innovation Officer is (or should be) superfluous if 'C-Suites' are doing their jobs properly. Since digital should be intergrated into the overall marketing, media and communications strategy, the CMO should oversee its planning and implementation.
As someone retained by a number of International organisations to advise 'C-Suites' on Strategic Marketing & Business Development, I'm often asked to review and advise on: "our social-media stuff". Lack of understanding, inadequate explanation and insufficient planning all combine to disappoint when 'Digital' doesn't meet over-egged expectation.
Like any tool, Digital can be hugely effective if used appropriately. If 'C-Suites' are to agree to buy the right tool, Digital has to explain and justify itself in business terms - as part of the overall marketing and communications strategy. Trying to separate it out defeats the object.
Director at Ideal Interface
11:41AM on 22nd March 2013
I think the role of CDO is a transformation role that is only needed until digital is fully understood / adopted across the C-suite. Right now it is not, but in a matter of years this could change.
One approach that I've seen work for some organisations is to take on a Non-Exec Director who has the full compliment of Digital skills, to see them through this period. This would have the benefit of integrating a CDO-type person into the organisation, without the need to restructure the board.
2:16PM on 22nd March 2013
While I don't disagree with what is outlined in the article, I think the conversation is not (or should not be) about CDO vs. no CDO, but rather who is looking out for the entire customer experience.
Putting a CDO in place is just creating one more silo around a marketing discipline. It doesn't advance the customer-centricity of an organization in the least, which is where companies need to be evolving their thinking and practice.
CEO at Econsultancy
4:56PM on 22nd March 2013
@Evan - I agree. I advocate that in my earlier article on "CXOs" (see http://econsultancy.com/blog/11263-should-cmos-aspire-to-be-cxos) but where, again, I argue that inventing another job title isn't the solution.
10:22PM on 22nd March 2013
Interesting to see the large number of reactions; obviously a very relevant subject for many of us.
I'd like to bring a couple of points together:
In the early stages of digitization, the Board of Management needs to recognize, confirm and communicate the importance of digital for the company and draft the impact of digital. In this phase a CDO type of role can be very beneficial to accelerate the digitization. In the end game, digital becomes an integral part of EVERY part of the business and the role of CDO becomes obsolete. In other words: the question is not IF a CDO is needed, but UNTIL WHEN a CDO accelerates the digitization.
12:10PM on 23rd March 2013
Interesting thought. The problem I see is if the board don't understand digital they can't define a good strategy. The guys on the floor are usually specialists/technicians and can't deliver a plan based around the needs of the business, only services.
If the board can take time to train these guys in business goal setting and the rules of the game then I think it's possible, but I see abdication of responsibility by the board and not delegation.
I also see the problem of accountability. If there's not a person responsible for pulling all the specialist department together you will have blame and excuses between the teams.
Someone has to own it, and I think it's the CMO. They have to get it, or get out.
8:53AM on 24th March 2013
This article has got me thinking.
On the other hand, you wouldn't expect a CMO to become a CFO, and vice versa - whats the difference?
4:41PM on 25th March 2013
An interesting debate. Have enjoyed reading it. I agree with Elwin. In my experience, the presence of a CDO is often linked to business and board maturity (their knowledge of digital & the level of digital maturity within the company).
6:35PM on 17th April 2013
With all due respect to someone who "provides information and digital capability development services to digital marketing and e-commerce professionals worldwide." In the real world ....
... the lead-time for most companies to change their CEO/CMO is long and being great at everything expect digital, seems like a poor excuse for expediting their replacement.
So, what to do in the meantime? How about appointing a C level expert ... someone who understands the whole business AND digital. Not a CIO or CTO who usually are weak in business. But someone with broad experience who does happen to be digital. Someone who can see how technology touches every part of the business, vision it, implement it, lead it, etc.
It is not realistic to expect a more junior employee to be powerful and influential enough to manage up, down and across a matrix.
And to outsource this to a part-time consultant ... neh!
CDO may be a short term proposition (10-years ...) but the companies that get the right person in now to will win.
CA
8:23PM on 17th April 2013
Cool ... you take down comments you don't agree with !!!
CEO at Econsultancy
8:41PM on 17th April 2013
@Charles - we don't take down posts. Your post was never published because our spam filter parked it for some reason. Anyway, I've now published it (and another one from Nick Morton which had also been auto-marked as spam).
BTW, isn't the average tenure of a CMO something ridiculously short like 18 months?
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