In a previous article I talked about how the CDO club is growing. Call them what you will – chief digital officer, chief transformation officer, or other – it’s estimated that 36% of people working this job were hired in the last year alone.
With the digital age driving such fundamental changes to the way we do business, CDOs will continue to accrue. But the role often lacks precedent (most companies have never had a chief digital officer before) and its remit, when looking at the businesses that do have one, can be quite nebulous. How do organisations go about finding the right person for the job?
If you’re looking to hire a CDO into your business, I would first encourage a conversation around the following questions:
Holistically speaking, the full digital transformation of a business would be encompassed by the framework below:
The 2015 Chief Digital Officer Study by PwC’s Strategy& represents full digital transformation as covering six key elements.
While in theory, the chief digital officer could be responsible for all these six elements, from customer relationships through to governance and change management, the framework is fairly broad. In reality, you won’t see many organisations hand all of that to the CDO.
The extent to which each of these six elements would be applicable depends on the organisation and what problems it’s trying to fix. It is important, therefore, that if hiring a CDO, the goals are defined. These goals can be internal as well as external – a fact that is sometimes overlooked. (Seeking someone with a strong marketing background to lift consumer-focused operations is all very well, for example, but those are almost certainly going to be driven by internal transformation.) That balance should be kept in mind.
Once you’ve defined the prospective CDO’s remit within the firm, what skills would you look for in a candidate?
In my experience, a key characteristic of a digital leader should be to have an open mind and the will to push boundaries. Typically, they’re confronting structure, ways of working and policy, and that needs to be led by someone who is prepared to go out on a limb and challenge the status quo. ‘Hooligan’ is perhaps a strong word, but they’ll need to be a disruptive force that can break the rules while not putting the business at risk.
A lot of discussion is focused around whether the CDO must have a technology background and the default position tends to be that ‘digital’ equals ‘tech’. It’s not: it’s about transformation and how that can drive new platforms, offers and services. Technology can enable that outcome and indeed, the IT function needs to fit in order for a business to respond quickly to change. So at the very least, the CDO should understand what technology can do, as well as the threats that it poses. On the other hand, if they’re struggling to use a mobile phone, don’t understand social media and are still getting their PA to print off emails – they’re probably not the right person for the job!
Another consideration when hiring a digital leader is the ability to navigate dual strategy. Balancing short-term business results with longer-term efforts at digital transformation is a real challenge. There’s always the quarterly results to achieve. Something that promises to deliver a benefit over many years is always going to get deprioritised, that’s natural. A key part of the role, therefore, is demonstrating short-term wins that still fit into the longer term business strategy (this can also support change management).
Critical to setting the chief digital officer up for success is to install them at a senior level in the business, with direct access to the CEO or strategy. The ability to engage this kind of leadership support is absolutely essential, a fact reinforced in our own transformation journey at PwC.
Research by Strategy& shows that only 42% of CDOs currently sit at C-suite level.
A report released this month by PwC’s Strategy& sets out a range of archetypes to help businesses characterise the kind of digital executive that might meet their company’s needs. These five model types represent a range of roles and responsibilities, as opposed to specific executives. If you’re looking to hire a CDO, the paper describes them as ‘primary colours’ that must be mixed to paint the right picture.
The five CDO archetypes are:
This CDO’s mission is to imagine how the business could be transformed through digitisation. Preferably working with the CEO, they focus on developing a fully digital strategy and operating model, drawing on innovation from both inside and outside their industry. Who should hire them? Industrial companies and other traditional industries such as utilities and mining, which already have a strong set of capabilities but have yet to benefit fully from digitisation.
Offering a more hands-on approach to the development of new digital technologies and business solutions, the creative disruptor often works with CEO. They seek competitive differentiation, often by incorporating ideas from outside their industry. Who should hire them? Companies facing dramatic changes as a result of digitisation in consumer-oriented industries, such as publishing and retail.
With a focus on developing an engaging and seamless customer experience, the customer advocate is responsible not just for online sales, but post-sales service operations as well.
Who should hire them? Customer-facing industries such as retail, services, banking and travel.
Like a highly innovative CIO or CTO, this CDO uses new technologies such as IoT, social media and analytics to transform the company’s entire value chain. Rather than disrupt the company using ideas from other industries, the innovative technologist looks to gain differentiation through speed, efficiency and new business models supported by digital services that combine with physical products.
Who should hire them? Manufacturing industries looking to optimise supply chains or production steps such as design and prototyping.
The most visionary of archetypes, and fully supported by the CEO, the universalist oversees all aspects of a digital transformation.
Who should hire them? Any company lagging in the digital world, seeking a rapid and comprehensive transformation.
A breakdown of the model types of a chief digital officer. Source: The right CDO for your company’s future, PwC’s Strategy&. Click to see full image.
When seeking the best digital leader for your business, you could look internally or externally for the right person. Either way, experience is one thing – but attitude, mindset and personality are significant others.
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