The rise (and likely fall) of the chief digital officer

By Adam Cranfield

The number of chief digital officers, or CDOs, is doubling every year, but in just five years the role could disappear altogether.

That's the prediction of Deloitte Digital, who have recently published an interesting and engaging report, The Rise of the Chief Digital Officer.

In the report's foreword, Mike Brinker, global head of Deloitte Digital, identifies three types of CDO, based on attending a summit of 50 top CDOs in Silicon Valley:

  1. Ex-agency: traditional interactive marketing leaders that view digital as "digital marketing" and engagement with the customer.

  2. Digital transformation strategists: Change agents chartered with the reinvention of their organisations.

  3. Technologists: Those who view digital primarily from an enterprise perspective - most often reporting to the chief information officer.

Brinker says the ex-agency/marketing CDOs mainly worked for consumer packaged goods companies, while the transformative CDOs were primarily from media, tech and retail (where business models are being disrupted most), and the technologist CDOs clustered around heavy industries like manufacturing, energy and pharma.

Deloitte Digital define “digital” like this:

"Digital represents the channels end users must be able to access to facilitate transactions and interactions that are beautiful, efficient and superior in experience, leveraging a combination of mobile, social, analytics, cloud and emerging exponentials (eg sensing, artificial intelligence, drones and crypto currencies). Anytime. Anywhere. Any device."

Next come some big stats, including the fact that "in the last 2 years, we’ve seen 9 times more data created than in the entire history of humanity" and that "1 billion digital natives will join the workforce in the next 7 years."

According to data from the CDO Club, cited in the report, the number of CDOs has doubled every year since the first CDO was appointed in 2005. There are now over 1000 chief digital officers.

Are we heading for peak CDO?

Report author, Peter Hughes, who leads delivery and operations for Deloitte Digital Canada, describes how digital strategy is fast becoming corporate strategy. "No longer just another tool in the marketing toolbox, digital is becoming the foundation of entirely new ways of doing business as well as giving rise to entirely new businesses."

But while we can expect to see more and more CDOs appointed over the next few years, Hughes goes on to predict that we will hit peak CDO, after which the role will start to become redundant and will in fact completely disappear by 2020, as corporate strategy - the responsibility of the CEO - becomes indistinguishable from digital strategy.

Hughes says: "For many industries, digital will become so infused with the business that it will make no more sense to have a separate leader and separate team than it does now to have a Chief Email Officer. This temporary title inflation will soon be followed with a title deflation that sees the digital team become a non-strategic operations group managing content, platforms and apps. Even more provocative is the notion that the CDO will be the presumptive heir to the CEO throne as digital business becomes more prominent and complex."

But for now, the CDO has a potentially vital role in enhancing the rest of the C-suite.

  • The CDO can be a catalyst for the transformation and innovation agenda of the CEO.
  • For the chief marketing officer, the CDO can support the shift from transactional marketing to engagement served up through social, mobile, search and wearables.
  • For the chief information officer, the CDO can help to build a complementary team of technical resources. CDO = front end, CIO = back end.
  • For the chief strategy officer, the CDO supports the strategic direction of the organisation by creating new opportunities to enter new markets.
  • For the chief operating officer, the CDO enables operational efficiencies, including digitising internal operations and creating end user tools.

Three paths to CDO

The report outlines three routes to creating and empowering a CDO.

The first way is to elevate a non-executive digital role (head or director level) up the C-level.

The second way is to centralise fragmented digital resources to converge as one team with a single leader.

The third way - and the most radical - is to create something entirely new, such as an independent entity or business-within-the-business that delivers business outcomes exclusively through digital channels and takes responsibility for its own revenues. Under this third option, an organisation could build a challenger brand that operates as a competitor to its legacy business.

Adapting the culture to attract and retain talent

The report highlights attracting talent/skills as one of the keys to the process of digital transformation. As Hughes says, "Many traditional organisations struggle to adapt their workplace culture and policies so that they are enticing to these workers. Digital talent has its own patterns of behaviour, its own tools and its own ways of evaluating the quality of work." This manifests in every aspect from office environment, dress code, office hours and expectations of experience and qualifications.

What does it take to make it as a CDO?

So what does it take to be a super CDO? Rizwan Khalfan, CDO at Canada’s TD Bank, identifies the key attribute for an effective CDO as: "The ability to influence others by empowering them with the insights and information they need to do their jobs and evolve through digital transformation."

As for collaboration with the CMO and CIO, Khalfan says: "The CIO, CMO and CDO all sit at the same table and report to the same person. That's a good start for collaboration and partnership. It brings the respective expertise to the table and drives outcomes that are right for the customer."

Deloitte Digital's report concludes with a nice one-pager on a 90-day action plan for any newly appointed CDO. I don't want to diminish the value of downloading the report, so I won't copy it here. Instead, check it out for yourself.