The rise of the chief digital officer

The C-suite is becoming increasingly crowded as businesses add a range of new positions, such as chief digital officers, who frequently collaborate with CIOs on enterprise-wide digital transformation programs and reconsider how to serve customers best.

What specifically do CDOs bring to the C-suite table, and why are so many businesses using them today? Although the CDO title is not brand-new and the position has existed at least since 2011, it has become more of a customer-focused position.

What is a chief digital officer (CDO)?

Essentially, it's a C-level executive whose primary responsibility is to spur growth and strategic renewal by converting a company's traditional analog businesses into digital ones. This executive emphasizes creating new value through the smart application of digital tools, platforms, technologies, services, and processes.

What distinguishes a Chief Digital Officer (CDO) from the more well-known Chief Information Officer (CIO) position? Simply put, the CDO is more concerned with executing digital initiatives that support strategic innovation and business transformation than the CIO has traditionally been, overseeing a company's IT infrastructure to enhance operational efficiency.

The typical CIO manages continuity, whereas the CDO manages change. Businesses are aware that they must strike a balance between maintaining their current business model and dealing with deep strategy renewal and rapid technological change, which is why there are now two distinct leadership responsibilities. However, many CIOs are attempting to blur the lines between the two, eliminating the need for a CDO.

Businesses have long held the mistaken belief that digital technology is only an addition to what they already do, something that can be bolted on rather than integrated into every part of the business. However, there is an understanding that digital innovation and transformation must be at the core of corporate strategy and operations, maybe even catalyzing a fundamentally new business model. "Digital isn't merely a thing—it's the new way of doing things," as McKinsey states; as a result, the function of the CDO is currently evolving and growing in many businesses, happily taking on wider-reaching and significantly more strategic dimensions.

Digital Leadership

The chief responsibility of the CDO is to be a digital leader who can successfully lead the enterprise-wide transformation effort on a multi-year path to digital excellence. That's a lot to ask of anyone. Still, it also entails what is arguably the most fascinating and crucial corporate function today as businesses adapt to the digital economy's new strategic challenges and commercial imperatives. How else can businesses hope to embark on the transformational journey toward a digital future? 

Let's look at the specific duties that should be included in the Chief Digital Officer's job description now that we know what a CDO may bring to the table. Many firms will need to go beyond an unclear, ill-defined, or out-of-date job description because the position is still relatively young and evolving quickly. Here are just a few of the crucial duties that many businesses today consider for this role:

Create a compelling and well-defined digital strategy for the company's future. Ensure all pertinent digital initiatives are fully incorporated into the strategic-planning process for executive support, resource allocation, and execution.

The CDO must be the organization's core leader and integrator in the process of digital transformation, acting as a go-between for all other executives and functions in the rollout of digital initiatives and capabilities, completely integrating business and technology, and bridging any digital performance gaps that may exist within and between the various activities and business units of the organization.

To develop cutting-edge digital solutions for goods, services, processes, customer experiences, marketing channels, and business models, the CDO must collaborate with teams across the organization. The CDO should be in charge of and centrally supervise the portfolio of digital innovation initiatives, with different executives and teams handling the deployment of the specific projects.

Initiatives for digital innovation and transformation should add value by, for instance, enhancing client engagement and loyalty, generating new sales, or attaining new efficiency. The CDO should track and report on the ROI outcomes of digital projects and investments (tied to enterprise KPIs) to demonstrate the beneficial impact of these activities since these results are quantifiable.

Create, manage, and sustain a digital innovation ecosystem inside and beyond the company, utilizing the skills of external partners to integrate digital technology into the business.

Competent people's market and organizational supply are currently outstripping digital innovation and change demand. Therefore, the CDO must collaborate closely with HR to develop digital competencies across the organization and attract and retain top talent.