Adapt, Disrupt, Transform, Disappear — The 2015 Chief Digital Officer Study


Strategyand, Contributor

December 16, 2015

By Dr. Roman Friedrich, Dr. Pierre Péladeau, and Kai Mueller

The digital revolution is moving fast and spurring massive disruptions and transformations in industry after industry. A key sign of its growing importance is the rise of a new kind of executive: the chief digital officer, or CDO. Although the number of companies that have already hired CDOs remains small — just 6 percent globally, according to the results of our first annual study of the position — their ranks are clearly growing rapidly. In researching 1,500 of the world’s largest companies through company filings and records and publicly available information, we found that those in consumer-focused industries, including media, entertainment, food and beverage, and consumer products, are at the forefront of the trend. Large companies are also ahead of the curve, no doubt due to their sheer complexity and the greater effort involved in carrying out the necessary digital transformation. And European companies are hiring CDOs at faster rates than companies elsewhere.

The CDOs themselves, more than 40 percent of whom are members of the C-suite, come from a variety of backgrounds, but by far the most common is marketing and sales, followed by technology. This suggests just how differently the CDOs and the companies that hire them imagine the role, and how varied the digital needs and pace of transformation are from one company to another. Flexibility is perhaps the single most important success factor for executives new to the position. CDOs who can adapt to rapidly changing circumstances while staying tightly aligned with their companies’ business goals will be in the best position to lead the way to a full digital transformation.

New demands, new roles

The CDO’s role is taking care of digital innovation both externally, in the companies’ interactions with customers, partners, and suppliers, and internally, collecting and analyzing data, improving efficiency through the use of digital technologies, and transforming organization and culture to enable their companies to compete successfully in the digital age. Given this wide variety of responsibilities, and companies’ often varied levels of digital maturity, it’s no surprise that a defining requirement for the position is flexibility — the ability to adapt quickly to the situation at hand — and that current CDOs come from quite diverse backgrounds.

Who is hiring CDOs?

A large percentage of companies haven’t yet seen the need to give a single executive the power to oversee their digital efforts across the entire enterprise. Instead, these firms are likely trying to make do by managing their digital transformations at the function, business unit, and geographical market level. It’s also worth noting that of the 86 CDOs we did find, 31 of them were appointed last year, a spike suggesting that more companies are already assigning a growing level of importance to the idea of a dedicated digital leader.

The percentage of companies with CDOs varies significantly by industry. Consumer-focused companies are far more likely to have an appointed CDO than their B2B peers — even B2B companies in the digital-embracing technology and electronics sectors.

Larger companies with more than 10,000 employees tend to be ahead of the curve in appointing CDOs. From a regional perspective, European companies are hiring CDOs at faster rates than companies elsewhere (13% in Europe versus 7% in North America, 5% in South and Latin America, 3% in Asia-Pacific and 2% in the Middle East and Africa).

CDO demographics

The CDO is a relatively new position at most companies, with almost 80 percent having been appointed since 2012. Yet its rise suggests that many companies are taking very different, and much more integrated, approaches to how they view the technologies they use to manage internal operations and the customer experience.

CDOs must take a much more cross-functional approach, spanning traditional IT and other, newer technologies, as well as marketing, sales, and other functions — all while they maintain intimate connections to their company’s business goals. As a result, the CDOs at the companies we studied come from a wide range of backgrounds — marketing, sales, technology, consulting, and academia. Of the CDOs we studied, more than a third have marketing backgrounds, and another 17 percent have backgrounds in sales and distribution, whereas just 14 percent have backgrounds in technology.

More on Today’s CDO

Today’s CDOs have a diverse array of challenges and goals as they lead their companies on the journey of digital transformation. Success will require that CDOs on this new frontier be adaptable, focus on business goals and the organizational and cultural changes needed, and remember that once digitization is firmly entrenched in their companies’ everyday operations, they will have accomplished their mission.

For more in-depth information about today’s chief digital officer, including firsthand observations from the front lines of this emerging role, see Adapt, Disrupt, Transform, Disappear – The 2015 Chief Digital Officer Study.

This article was written by Strategyand from Forbes and was legally licensed through the NewsCred publisher network.

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