Confronting the tidal wave known as digitization, some CEOs call for a lifeboat in the form of a Chief Digital Officer (CDO).
The CDO helps a company respond quickly and strategically, to the rapidly evolving digital landscape.
There are several qualities that every CDO needs. To start, they need an innovative mind and great skill at communication. Those are obvious.
“It’s really about [developing] a set of capabilities—around customer engagement, digital marketing, using algorithms to adjust the way the company works—not about a title,” says Martha Heller, President of executive search firm Heller Search Associates.
Here are three less-obvious qualities that Heller says make CDOs effective:
1. The ability to assess the organization’s capacity for change: Ever had an employee who spins out new ideas morning, noon and night?
CDOs should be both idea creators and change accelerators. Heller notes that organizations don’t go into overdrive overnight. CDOs should determine the rate at which their companies can absorb change.
“Digital business is not necessarily a set of technologies; it’s a change in perspective and mindset,” says Heller.
“In the old industrial thinking, we bring lots of teams and people together and all work together to get things done. In digital we’re using algorithms and code to get things done. That’s an entirely different way to think,” she says.
Changing minds takes time.
To be effective, the CDO with a thousand new ideas needs to understand how much change each idea requires. Then he needs to create systems and training that help make each change successful. “Who’s training the sales force about what it means for them? Who’s talking to the product managers?” Heller asks.
A strategic plan for digital transformation certainly can roll out at a pace that stretches the organization, and some upheaval is inevitable.
But overwhelming employees and breaking processes with too much simultaneous change isn’t digital transformation; it’s just chaos.
2. An understanding of technology architectures: Heller recounts a tech industry CIO’s view of how CDOs often operate.
“The CDO usually has a marketing background, or maybe a strategy background, so they come in with a great idea about customer engagement, all these cool ways of doing things,” says Heller.
“But because they have no experience tying that pretty front end to the back-end systems, they leave an architectural technology quagmire in their wake,” she continues.
Quagmires are expensive to clean up.
Heller says instead, CEOs would benefit from finding a CDO with a strong architectural sensibility.
“They don’t have to have a tech background, but do have to have a firm understanding that every new tech they bring into the company brings interoperability issues, security issues,” she says.
That’s not to say that the CIO should always evolve into CDO, she says. “But they need an appreciation for the architectural foundation that they are shoving these new technologies into.”
3. Being creative in how things get done: It’s one thing to have creative ideas for products and services. But there’s another layer to creativity that Heller points out. A CDO needs to be willing and able to use partnerships to accomplish tasks and goals.
Partnerships inside the company are the obvious starting place. The CDO has to work with “marketing folks, the presidents of all the divisions, the chief product officer, innovation groups—to make sure that as [the organization] tries out all these digital ways to engage, there is there a comprehensive overarching strategy,” she says.
What may be overlooked is that this capability must extend to relationships outside the company walls, and to new formats for doing work.
Ideally, Heller says, “you want a CDO with really good venture capital connections, to know what the new next thing is coming out of Silicon Valley or wherever.
“A willingness to work with fledgling companies is valuable, and an appreciation for concepts like agile development, minimum viable product, and iterative idea development” all help a CDO keep new initiatives on track, she says.
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When it comes down to it, having the right CDO in the right circumstances can accelerate the process of adding digital capabilities into everything an organization does.
But there is one word of caution in choosing a CDO. That is that each industry is different. The focus of the CDO position at different companies will vary. Some companies need more help on the marketing side, others need a deep dive into big data. While other need help in the product space or are determining how and where to add new technologies to their current infrastructure. As CEO, know what you want your CDO to achieve and set him on the course for success.
For more on the CDO, check out our annotated CDO resume.
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