The Chief Digital Officer, you may not need one
- 12 March, 2013 22:00
Digitalisation requires a type of collaboration that spans the organisation to create a digital edge based on an integrated customer experience. The idea of a ‘chief” role responsible for a specific aspect of the enterprise is not new but its getting a lot of attention and discussion. While it is easy to make the case that there needs to be a new C level role, it is more important to ask the question – do you really need one?
The external reasons to create a CDO may not be the internal reasons why you need a CDO
Industry advocates, solution providers, media and executives have a vested interest in creating a new ‘C’ level role. A CDO gives advocates an audience, providers a buyer to sell to, editors a market to advertise to and a the executive an opportunity to extend their powerbase. Counter balancing these forces of ‘conventional’ wisdom can be difficult as its may be easier to give in and go along than choose to invest in the executive collaboration required to create digital capability.
Mark McDonald, group vice president, Gartner, talks about the CIO agenda for 2013.
The idea of creating a Czar or ‘C’ level officer is not new. Organisations have created similar, specialized, and cross-functional roles before. During the late 1990’s a focus on business processes lead many to create a Chief Process Officer role, E-commerce and the Internet led many others to create similar roles around those technologies, such as Chief Internet Officer or President of E-Commerce Czar. You need to ask yourself where these roles are today in making your decision about a new role.
Consider creating a formal CDO in situations where the organisation does not have sufficient cross-operational and functional collaboration to create digital resources and solutions. This can be the case in the following situations:
If the organisation works along formal and strict functional lines, with clear and non- overlapping responsibilities. If things only get done when it is somebody’s job, then you may need a single digital accountability centre.
If the organisation sees itself as a collection of individual operations, business units, channels or lines of business, then it is not an enterprise and will not make decisions or take actions that benefit the whole. Then you need to create an individual executive, operation and overlay to get something done.
If the organisation has fragmented customer experience, products and channels that require greater integration to produce greater results, then you need to have a clear responsibility centre for the digital customer experience.
If your organisational culture requires a specific and identified leader to champion change and integration, then you cannot go against your culture. Create a digital prince to work with the other princes in the executive office.
Given the attention around digital marketing, mobile, social and analytics there is a hype that supports a desire to have a single person responsible or a single throat to choke should you fail to meet digital goals. After all the logic goes ‘if it is important enough to have, it is important enough to have senior executive in charge.’ If the situations above apply, then consider creating a formal Chief Digital Officer, as your organisation needs a single focal point to drive transformation.
Concentrating authority in a single ‘C’ level role does not reflect the collaboration required to create digital resources and solutions
Don’t fall into the trap that you have to have a CDO because everyone else does. You may not need a CDO according to the case studies explored in our book The Digital Edge. Digital solutions require a deeper level of cross-operational collaboration what can be normally achieved via concentrating authority in a single ‘C’ level czar.
Creating a digital solution is not the same as re-engineering a business process or creating an eCommerce channel. In these cases, organisations needed a focused “C” Level executive to drive the design, development and deployment of solutions that required mandating compliance to realize results. Consider the requirement to consolidate and conform to business processes or the decision to resolve eCommerce channel conflict and you see the need for a single forcing authority – a chief officer. You need a chief officer if you are trying to do things that are not natural in your organisation.
Digital solutions rest on choice, collaboration and creativity that, while not natural, should become natural in your organisation. In the Digital Edge book, there are several examples where companies realized digital business outcomes through building cross-operational teams rather than concentrating authority in a single individual.
At Royal Caribbean the working relationship between the senior leaders led to an integrated solution rather than imposing a digital overlay onto the customer experience.
At the Children’s Hospital of Los Angeles, the organisation brought together all of the clinical areas to create a comprehensive digital solution rather than trying to dictate it from the centre.
Such collaboration reflects the reality of the digital solutions that rest on combination of digital and physical resources to realise results and revenues. After all the true nature of the solution will eventually work its way into your organisation and that can obviate the need for the Czar, something that has happened in organisations that no longer have a Chief Process or Chief eCommerce officer. Once you learn to work that way, you no longer need the dedicated executive focus.
Make an active decision rather than passively following the crowd
As a role there is nothing wrong with a Chief Digital Officer. Likewise there is nothing inherently necessary in having one, particularly if your organisation has worked hard at creating an executive team and organisation that collaborates effectively across operational and functional lines. If your leadership team collaborates effectively, is willing to make operational adjustments in their groups to support others, and routinely achieves its shared goals and objectives, then you may not need a CDO.
Creating the CDO role gives an organisation focus by concentrating responsibility into a single executive position. The role can be a powerful catalyst that brings an organisation together to create new digital capabilities. But it is not the only way to build a digital business, nor may it be the best way to sustain digital gains. Just ask your chief process officer or eCommerce Czar and incorporate their advice into your decision. Make a decision because while others may want you to create a CDO, you are the only ones who have to live with or without this new role.
The author is a group vice president and the head of research in Gartner Executive Programmes. He is the co-author of The Social Organization with Anthony Bradley.
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