As digital disruption impacts every industry, the emerging role of chief digital officer (CDO) is becoming increasingly important. According to a recent study by technology advisor Gartner, about 25% of companies will have a chief digital officer in place – many of them large companies with big tech budgets. In fact, about half of the Fortune 500 will appoint a CDO by 2016, predicts Constellation Research, a San Francisco-based research firm focused on digital disruption.
“There’s a deep business model shift that’s going on,” said R “Ray” Wang, founder and chairman of Constellation.
Chief Digital What? Read more on the role of the CDO and why you need one here!
Although the cloud, mobile devices, big data and social media all helped create today’s digital landscape, the role of a CDO is not simply to learn how to use these technologies, Wang said. Instead, on a much broader scale, the CDO must understand how these technologies can fundamentally change the very way business is done.
“What we actually see is a set of technologies that allow people to create brand-new business models,” he said. As a result, over half of Fortune 500 companies have gone bankrupt, been acquired, ceased to exist or dropped off the list since 2000, he said.
A Revolutionary Case Study
Wang points to ride-sharing service Uber as an example of a new digital business model. At its heart, Uber is a mobile application that can be used to access a cloud-based network of drivers and passengers, he said. The network accommodates live data: Uber X drivers have dynamic pricing for holidays and bad weather conditions. It also has a social component where both drivers and passengers can be rated.
Traditional car rental companies can’t keep up with this new sharing business model simply by using social media to engage with customers, or by creating mobile apps for renting cars. That’s missing the secret of Uber’s success entirely. Instead, they need to understand how the availability of these technologies created an innovative new way of finding a ride and created an entirely new market.
“That’s the kind of transformational shift that is happening with digital,” he added. “Inside every organization, people want to access technology to create new data models, and they want to access the data to identify new problems that customers might have.”
Understanding and analyzing that data is the foundation of any digital businesses model, added Wang. “We are looking for anomalies and we’re trying to figure out patterns that make sense,” he said.
The Rise of the CDO
It’s the responsibility of the director of digital to lead this transformational marketing shift.
“The CDO’s job is to turn the digital cacophony into a symphony,” wrote George Westerman in Harvard Business Review. “The CDO creates a unifying digital vision, energizes the company around digital possibilities, coordinates digital activities, helps to rethink products and processes for the digital age, and provides critical tools or resources.”
Do you have someone who does that in your organization?
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Leading the Digital Marketing Charge
” the CDO needs to lead the way to a digitally enabled company…”
In a Constellation survey of 500 organizations, the 100 companies identified as market leaders or fast followers were also the most ready to hire a CDO, Wang said. The right time to adopt a CDO depends on whether companies need to be industry leaders: “You have to understand your company. If you’re a market leader or a fast follower, you’re definitely going to get on board now,” Wang said.
CDOs are found across all industries, but advertising, publishing and information-based industries were early adopters. For example, NBC, Harvard University, the City of Boston and the Federal Reserve have all hired CDOs (click here for more).
And while CDOs can be hired from other C-Suite positions, it’s shortsighted to view the role simply as a bridge between competing marketing and IT departments vying for control of a company’s digital strategy and budget.
Instead, the CDO needs to lead the way to a digitally enabled company, Wang said, where all executive roles understand the ways digital technologies can transform business – from marketing and sales to back office functions like human resources and finance.
From the horse’s mouth: the shifting role of the CDO from four experienced chief digital officers.
Video from cdoclub.com
Fine Tuning Your Chief Digital Officer Executive Search
As our ability to gather and process data evolves, so too should your digital marketing executive recruitment strategy. What made a great CDO just a couple of years ago is completely different from what defines one today.
That’s why it’s also important to also build a corporate culture of digital DNA that is flexible and able to adjust to new technology and media. Beyond data scientists, marketing needs cultural anthropologists who understand how to make products and services appeal to people’s emotions and senses. Digital technology, after all, enables personalized experiences and not just transactions.
Although Wang predicts that the CDO role will eventually evolve into an even more advanced role, he sees continued growth over the next five years as CDOs serve as transformation agents in a digital era. “We are seeing a wholesale shift,” he said. “Some people think it’s about technology but it’s not. This is about a business model transformation first.” TWEET THIS
Source: forbes.com
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