News & Analysis

Will 2020 Witness the Demise of the CDOs?


At the turn of the decade, enterprises were perceiving a digital avatar as the panacea for all challenges they faced across business and operations. Knowledge of the digital ecosystem was considered mission critical and experts argued that traditional CTOs or CMOs weren’t equipped to handle digital transformation, as it required buy-in at the board level.

And so was born the Chief Digital Officer (CDO) who was then tasked with creating a digital roadmap and work with the CTO, the CMO and every other C-suite member to help the enterprise develop the requisite level of digital competence. The incumbents brought in requisite knowledge of technology, marketing and design thinking.

However, as suddenly as the CDO came on to the scene, their relevance appears to be under threat in recent times. At least, that’s what a study conducted by Strategy and PwC’s strategy consulting group seems to suggest. The research, which looked at the hiring patterns and scope of the CDOs across 2,500 publicly listed companies indicated that fewer companies were appointing these specialists.

The study indicated that CDO hires slowed down sharply compared with the twelve months of 2016 with just about 3 percent of those surveyed indicating that they had created a CDO-type position as against more than 15% three years ago. And why so? Because enterprises seem to have given up on the idea of having a single person in charge of digital transformation.

“This would require some sort of a Superman (we’re gender agnostic here) as the official concerned needs to have working knowledge of all operational verticals of an enterprise, the impact of digital on the stakeholders of each of them,” says Laxmi Kanth, a digital consultant working with Fortune 1000 enterprises in the United States.

The PwC research too pointed out that leaders at many companies hold the view that a single person leading digital transformation need not be a good approach due to the fact that for a business to be successful there is an intrinsic strategic priority that only the Board or the CEO can decide, given that agility is critical to survival. The CDO is not a discreet function anymore.

How things changed though! Just seven years ago, Gartner had predicted that the CDO was destined to be the most exciting executive role for the next decade or two. Leadership advisory group Russel Reynolds Associates claimed that the CDO would drive change across organizations and eventually end up taking over the CEOs role in the digital transformation era.

A report published in quotes Tony Saldanha, former P&G IT executive and author of Why Digital Transformations Fail to suggest that CEOs originally created the CDO role because their felt that their CIOs didn’t have enough business knowledge to drive digital transformation and their business unit leaders didn’t have enough technical skills to know what was possible. However, reality has shown that adding this extra layer brings its own problems.”

In fact, companies have already started changing their expectations from the CDO role. Why so? For starters, the CDOs are now working across functional silos and they need to change legacy systems and implement new technologies which requires strong tech knowledge. To find such an animal is fast becoming an exercise in futility as even the traditional engineering plus business management training doesn’t seem to cut it, given that digital transformation is about design, content and usability.

Does this mean the CDOs would become non-existent? Maybe not. Because in most cases digital transformation has shifted beyond the CMOs and CIOs and headed into the boardrooms. This suggests that for enterprises the topic of digital enhancement is mission critical and requires focused attention right through the year and needs to be driven from the very top.

When these officials were brought into the company, the belief was that they would formulate and implement a transformation strategy. However, the challenges from legacy systems and multiple silos battling each other for priority status means that the CDO alone cannot fix things. It requires collective action which would get driven only by the CEO.

Moreover, when the CDO came on the scene, their expertise was in market-facing functions such as customer service, marketing, sales or distribution. Now, organizations are seeking CDOs with strategy and technology backgrounds who can function alongside other C-suite teams ensuring that any change that they may implement isn’t disrupting the business.

Which essentially means that the CDO is giving way to the CIO of yore! The question now is would the CISO also face the same fate in a few years’ time?

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