Examining the role of the CDO and their relationship with the CIO
With digital transformation top of mind for companies across the board, the inception of the chief digital officer role has become more commonplace in today’s c-suite, often joining the CIO.
With 84 percent of respondents in Egon Zehnder’s recent “CDO Decoded” report identifying themselves as the first CDO in their company, there comes a certain amount of uncertainty of the boundaries and job descriptions for these roles.
Consider some highlights from the “CDO Decoded” report:
- 56 percent of CDO’s view their role as driving commercial impact and digital monetization.
- While just 10 percent of CDOs saw their primary role as evolving company culture, 54 percent said they spend more time on evangelizing than executing.
- 80 percent of respondents found that evolving company culture was either more difficult or much more difficult than they expected.
- CDO is a senior role – 63 percent report directly to the CEO.
Information Management spoke with Egon Zehnder’s partner Lindsay Trout on both the differences and similarities between CDOs and CIOs and best practices for hiring these roles to create harmony? For example, with the CIO position already fully entrenched in the c-suite and often already tasked with embracing digital strategies, how can these two positions work in harmony to achieve the digital transformation goals of their company?
Information Management: The new report on the “CDO Decoded” looks at the roles and relationships between chief information officers and chief digital officer. What are the key findings of the report?
Lindsay Trout: CDOs are different than CIOs. The chief digital officer is typically a change agent evolving and enabling the business model through tech. In our research, of the first gen of CDO’s, only one-third of them came up through technology.
Some CIOs are very strategic and business oriented and thus well suited for the CDO role; not all are. As the study showed, this is primarily a commercial remit.
IM: How do the roles and responsibilities of each differ and how do they overlap?
Trout: CIOs have been focused historically on delivering productivity for an organization within budget; it’s often around cost containment versus really looking at revenue generation. More recently, the CIO has been more commercially minded but there is a pool of talent that would not have the vision or commercial acumen required for a CDO remit.
In the budding next generation of CDO’s, we are seeing this shift from the evangelism phase to the execution phase. As such, the CDO organizational structure is evolving, often encompassing all of technology. We have seen CIOs reporting under CDOs and we have seen CIO’s being replaced with more strategic and commercially minded technical talent; in the latter case, the title evolves from CIO to either CTO or CDO [or as recently seen with Nike, CDTO].
IM: What are the benefits to an organization of having a CDO?
Trout: The CDO will be defining the future state of the business and getting the organization galvanized around this. The CDO may be making cases to the board to secure investment on technology and even acquisitions. She or he may have a CIO complementing her leading the technology function.
In traditional businesses (versus pure play digital businesses), the product function is often less mature. The CDO typically builds this capability in the business and aligns it to work well with the tech teams. The CDO often may hire in external talent that has experience with modern tech stacks, cloud solutions, big data and agile ways of working.
IM: What are the potential business benefits of having both roles, and how should each role be defined to support those goals?
Trout: In one of our client companies, they will have their CTO who is forward looking, has experience modernizing tech stack and has experience evolving a company into omni-channel business model. She will be complemented by a CDO who will accelerate the digital P&L and the overall capabilities of the organization, across all functions from supply chain to hiring practices. They are complementary in this case and a powerful duo to drive broad enterprise change.