How CIOs Can Step Into the Chief Digital Officer Role
Companies today have a need for a bold leader who can work across departmental lines, who understands IT and who can drive a digital roadmap. While some companies are looking to fill this void by hiring a chief digital officer (CDO), many CIOs are in a prime position to adopt this role themselves, thereby helping their companies meet both operational and innovation goals.
Pricewaterhouse Coopers (PwC) defines the CDO as “that executive who has been given both the responsibility and the authority to bring about the company’s transformation to a fully digital enterprise.”
This extends beyond engagement in social media or instituting a bring-your-own-device (BYOD) program. PwC says the job includes “overseeing the transition of operations, sales and marketing, systems, and production [to digital] — along with the internal corporate culture and in some cases the company’s products and services themselves.”
Step 1: Address Existing IT Inefficiencies
This is a tall order and to make it happen, CIOs must first get their existing ship in order. “If you simply must own all of your IT, and you need big teams to get things done, you may not be ready for a digital leadership role,” writes Martha Heller in her book Be the Business: CIOs in the New Era of IT. As highlighted in CIO, she argues that these executives “should not waste their time proposing digital strategy if email isn’t working. Being operationally efficient merely serves as table stakes.”
Ideally, CIOs free themselves of the operational overhead that limits them to the role of a service provider charged with keeping the lights on. This may necessitate outsourcing IT systems and processes to a managed service provider — an approach that offers the added benefit of enabling the organization to realize additional efficiencies within the business through the provider’s advanced analytics.
Step 2: Get the Right People Together
Once the IT team is running smoothly, CIOs can focus on digital transformation. Few companies have stood still over the past five or so years; many have begun their digital foray, but those efforts have been siloed across the organization. Pockets of innovation often lack coordination and may in fact duplicate efforts.
The CIO’s next step, therefore, should be to get stakeholders working together. Create a centralized digital transformation organization consisting of the company’s other CIOs, CMOs and business unit leaders. Together, these individuals should be responsible for “regrouping all of the resources and all of the experts from different functions and markets needed to carry out the strategy,” writes PwC.
To be successful in this endeavor, CIOs must have strong people skills. According to research by McKinsey & Company, chief digital officers estimate they spend 80 percent of their time building relationships. “In our experience,” the analysts write, “successful CDOs have the patience to navigate the complex organizational structures of large businesses; additionally, they collaborate to get buy-in across functions and are able to diplomatically challenge the status quo and solidify relationships with a broad group of people.”
Step 3: Integrate Digital (With Everything)
CDOs must be careful to avoid simply consolidating previous silos into one big new silo. In other words, don’t make digital its own strategy. “Digital isn’t merely a thing,” suggests McKinsey & Company. Rather, it’s a new way of doing things. Enterprises should focus less on creating a digital strategy and more on integrating digital into every aspect of the business: the channels, processes, data, operating model, incentives and culture.
This will require working closely with executives at the C-table and infusing digital into the overall strategy for the company. Successful CDOs will bring bold initiatives and a high risk tolerance. “No matter how it’s branded,” McKinsey writes, “CDOs need to be known within their organization for something that is courageous, new, and adds value.”