By Coco Brown Founder and CEO
Today’s economy is global, digital, and fast-paced. For a company to be successful in such an environment, it must leverage technology—even if it doesn’t consider itself a traditional technology company. This means implementing the right tools to enable your workforce to be productive and make data-driven decisions. It means providing customers with a seamless, intuitive experience. And it means using technology to get ahead of market threats and quickly leap on new opportunities. It’s in this spirit that we’re all technology companies; we’re all tech workers. Technology and digitization are non-negotiables of doing business in the twenty-first century.
But here’s the challenge: implementing and creating new technologies are no minor endeavors. Putting numerous disparate technologies to work for your company can often result in fragmented and clunky outcomes. If done incorrectly, it can lead to horrendous customer experiences and catastrophic losses on investment—not to mention, setbacks in the areas of change management, product development, and much more.
Enter the Chief Digital Officer (CDO). Companies of all sizes today are turning to the CDO to take the reins on digital strategy, innovation, and market disruption. Taking things one step further, modern organizations are inviting chief digital officers to their boards, allowing them to be at the helm of digital threats and opportunities at the highest level of impact.
Indeed, the chief digital officer may be the most no-nonsense board seat yet.
At the helm of business transformation
McKinsey&Company refers to the chief digital officer role as “transformer-in-chief,” and for good reason. CDOs are “charged with coordinating and managing comprehensive changes that address everything from updating how a company works to building out entirely new businesses. And he or she must make progress quickly.” They’re tasked not just with executing a digital strategy but with seeing that their organization truly lives it, in everything they do and in every interaction with every customer and stakeholder.
CDO roles vary greatly from organization to organization. While CDOs partner closely with CEOs, CFOs, and CTOs—all traditional board roles—the CDO role requires an artful balance of strategy, vision, and bold risk-taking. Unlike other tech-centric roles in the C-suite, the CDO role is customer-obsessed, future-bound, and disruptive at heart. It’s in this way that the CDO is not only steering an organization into the future, he or she is unabashedly committed to the customer experience along the way. This may mean complete overhauls of internal systems, supply chains, or analytics platforms. Also, it may mean evaluating and implementing new technologies, such as Artificial Intelligence, cloud systems, or robotics. And without a doubt, the role of CDO most certainly includes digital evangelism. To the board. To customers. To employees. To partners.
An ambassador for technological change
At the pace businesses move today, businesses can’t risk falling behind with digital change and innovation. CDOs are required in the boardroom—where they can impact the broader company strategy and put their vision to work for the greater good of the company. If used effectively, CDOs offer a bridge between the pragmatic and the visionary, between customer experience and disruption, meeting (and getting ahead of) customer expectations and behaviors, crafting a digital strategy that is interwoven throughout a business, and driving both systematic and cultural change throughout an organization; these are all reasons why CDOs are critical to the board.
For the last few years, many businesses have caught on to the value of a CDO.
According to a study by PwC, 19% of the world’s 2,500 largest public companies have an executive leading their digital efforts (for reference, it was just 6% in 2015).
The same study from PwC shows that 60% of CDOs have been hired since 2015.
Companies are investing in digital transformation more than ever. In fact, it’s predicted that “85% of executives will allocate up to a quarter of their total budget to digital transformation.”
Laura Merling is Chief Digital Officer for United Technologies. She points out that companies today are not only judged by their technology, but by their pace of change: “Technology has created an unprecedented pace of industry disruption. A company’s relevance is being decided by its ability to use technology and data to quickly transform everything from how the company works, to disrupting its own business model. Without a CDO leading the company beyond the demands of the day to day, companies won’t survive.”
A commitment to innovation
Digital is the currency of today’s business world. It’s how business is done. Often, it’s how employees expect to operate and it’s how customers expect to interact. Today’s businesses are expected to do better. In a world of rapid-paced innovation, the bar has been raised and companies that can’t keep up with wildfire-like innovation risk becoming extinct.
When CDOs have a seat at the board table, a company can gain critical insights and make the decisions that matter for a company’s future. While so many organizations are caught up in market analysis, operations, and compliance issues, most businesses fall behind not due to those traditional challenges but to lack of innovation. Boards should fold innovation into their governance practices, with quarterly reviews on innovation strategy. There is no role more equipped to lead this conversation than the CDO.