Chief Digital Officer (CDO) Explained

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If you want to be a Chief Digital Officer (CDO), or just look like one, this article can show you how.

It’s not an easy path, and it takes a rare person with an even rarer suite of skills and experience.

Whether you think of a CDO as a Director of Digital Transformation, or the future of CEOs, or a modern “Enterprise Coach”, this article should get you thinking about the competencies, skills, and experience of an effective CDO.

Summary of The Effective Chief Digital Officer

The effective CDO knows how to wrap the business around their future customer.

The effective CDO is a strategist, a change leader, a marketer, a business developer, General Managers with technical chops, and a future CEO.

The effective CDO gets marketing, gets innovation, and knows how to evolve the business to keep pace with the changing world around them.

The effective CDO is a modern business leader that’s tech savvy and customer-focused.  They are a visionary who see and share how technology can be used to create and capture value for the digital era.

And they inspire us to change our world through their great stories of digital transformation from around the world.

The CDO is the Right Hand of the CEO

The CDO ideally sits at the right-hand of the CEO and helps transform the company for the digital future.

Via Russell Reynolds:

“The last two years have seen the rise of the Chief Digital Officer, a senior executive who sits at the right hand of the CEO and is seen as instrumental to the future of the organization. For many companies, especially those in the retail and leisure sectors, digital is the fastest- growing revenue stream, and a Chief Digital Officer (or, sometimes, SVP Online) is extremely important in driving that growth. In some sectors, such as traditional media, the CDO often will have been hired to help transform the company as its products evolve digitally.”

Effective CDOs are Seasoned General Managers with Digital Acumen

Driving digital business design and implementation takes all of what you’ve learned about managing a P&L and translates it into a modern landscape. 

You need to be able to put the pieces of the puzzle together from customer segments to the channels to the value proposition to the portfolio of products and services to the revenue streams to the cost structure and to the partners in your ecosystem.

And you need to innovate in the business model to effectively create “business because of technology.”

Via Russell Reynolds:

“In both cases, the CDO needs to be someone who not only has digital acumen but also is a seasoned general manager who can operate within a large-scale business and influence effectively across the organization. This is a relatively new type of leader and one who is hard to find, attract and retain. The increasing importance of the role eventually will put CDOs in the queue for CEO succession. CDOs will be the executives with the operating experience, management skills, strategic mindset and vision to lead businesses in an increasingly technological future.”

The CDO Has Experience in Biz Dev, Marketing, and Innovation

To be an effective CDO, it takes a good background in business development, marketing, and innovation.

The real key is somebody who has a relentless customer focus and empathy.   They need to have real empathy for the pain, needs, and desired outcomes of the customer.  They need to have empathy for the friction in the Customer Journey.  They need to know how to create a better brand for the future.  They need to know how to connect and click with customers in relevant ways to co-create value for the future.

Via Russell Reynolds:

“More generally, CDO candidates should be familiar with web, mobile and social media— and possibly local as well. They should be able to plan and execute long-term strategy around driving customer awareness, engagement, experience and monetization. When it comes to innovation, candidates should have experience developing new channels and business models, as well as innovative products and services. The CDO also must be tech savvy; though knowing how to code may or may not be required, the ability to manage developers and ask the right questions is a minimum requirement.”

Here are specific examples of desired experience for the CDO via Russell Reynolds:

  • E-commerce and transactional expertise. The focus here is on driving traffic, conversion and revenue. Often referred to as SVP Online, these CDOs are sought after by companies involved in e-commerce, such as e-tailers and manufacturers that move to direct sales. These CDOs require change management capabilities and the ability to manage channel conflicts.
  • Online marketing and social media expertise. Here the emphasis is on driving brand awareness, brand activation and consumer engagement. These CDOs are sought after by consumer-branded goods and services companies and require skills relating to new personalized/ localized communications as opposed to mass communications.
  • Transformative product and technology capabilities (i.e., analog to digital). These CDOs are sought after by traditional media companies and require change management capabilities that can impact the whole company.

Capabilities and Competencies of the CDO

The CDO should be an effective strategist.  They should know how to do Digital Business Design.

They should know how to create strategic partnerships inside and outside the organization to drive results.

The CDO needs to be an Agile change leader and know how to influence without authority.  And they should know how to transform products and services through digital innovation.

Via Russell Reynolds:

  • Setting strategy. With the digital landscape evolving so quickly, CDOs need to have excellent strategic skills, with the ability to chart the right course and make agile alterations when needed.
  • Executing for results. Strategic insight must be coupled with a strong execution orientation and an ability to deliver results despite the complex and fluid environment.
  • Building relationships and using influence. In today’s climate, the culture and practices within a business can change as quickly as those in the external market. Chief Digital Officers, therefore, must be able to build relationships across all levels and functions of the organization—from the Board down to the front line—and effectively manage conflict.
  • Leadership. CDOs must in turn be able to recruit top talent and to lead large and (sometimes) globally distributed teams.
  • Demonstrating cultural sensitivity. This is particularly important, as those skilled in new digital tools may view the world differently from others in more traditional parts of the business.

Your Future Customers are Creating Demand for the CDO

The evolution of the market and consumer behavior is driving demand for CDOs.

Social media along with enabling technologies such as Cloud, mobile, analytics, Internet-of-Things, Augmented Reality, Virtual Reality, Blockchain, Artificial Intelligence (AI) and more are changing how customers behave.

Smarter, faster, more advanced phones broaden what’s possible for consumers at the edge.  This is forcing business leaders in media companies, retailers, and information providers to rethink and explore the art of the possible for their business arena.

Here are some amazing stats on how things are evolving via Russell Reynolds:

  • In March 2011, Apple announced it had sold its 100 millionth iPhone. As of July 2011, Google’s Android Operating System was on 130 million devices.
  • In July 2011, it was reported that the Apple Retail Store is handling 24 million app downloads per day, and the Android Market is handling 17 million app downloads a day.
  • As of September 2011, there were more than 800 million users on Facebook. On average, Facebook users install over 20 million apps every day. There are more than 350 million active users currently accessing Facebook through mobile devices.
  • In April 2011, it was announced that more than 200 million people had signed up on Twitter, while, in September 2011, it was revealed that there were 100 million active monthly users.
  • In 2010, global revenue for the virtual goods industry was over $7 billion, according to Ted Sorom, CEO of Risty, a virtual currency platform.

The world is ready for more Chief Digital Officers to step up to the plate and shape a better world with technology.

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