Although just a few years ago the role had been predicted to be dissolved by now, the Chief Digital Officer (CDO) has moved to center stage in companies—and plays a critical role in their growth and the never-ending and critical digital transformation, new research from consumer connection non-profit MMA Global determines.
The firm’s new series of reports, MMA’s Great CDO Debate Series: Is the CDO Role More Important than Ever?, in collaboration with the University of Oxford, takes a deep dive into the role of the now-critical CDO, which has evolved in part due to the global pandemic that accelerated the need for companies to find innovative ways to connect to consumers in a new and different normal. But the research indicates that CDOs are increasingly owning a number of core capabilities that are needed to drive change, including business strategy, new product development, and experience design, as well as data governance and technology.
Six themes to emerge from 2021 CDO interviews:
Not only have CDOs become increasingly crucial in leading all important internal change, but now also increasingly have P&L responsibility, putting them in a good position for future leadership positions, including the CEO spot.
“The role of the CDO has moved to center-stage at many companies as they have realized that that disruption is ongoing and transformation is essential, and as a result, the role continues to evolve in importance,” said Greg Stuart, CEO of MMA Global, in a news release. “Someone in the c-suite needs to lead evolution as new challenges in businesses will always arise, in addition to new technologies and especially changing consumer expectations, often set by companies outside the company’s sector, will prevail. As a result, CDOs are best positioned and oriented to not only look around corners and predict what’s coming next but also to act as antagonists for change.”
Three reinforcing areas of focus for CDOs:
“The oft-repeated adage of ‘the pandemic did more for digital transformation than any C-suite executive’ may ring true in certain respects. However it would be overly simplistic to paint the role of all CDOs with the same brush,” said Chris Chesebro, Chief Digital Officer at Wella Company, in the report. “CDOs, like any C-suite executive, must drive clear business outcomes. Understanding the common drivers of digital-driven business outcomes can help CDOs in a multitude of industries further accelerate the positive impact of those outcomes.”
In addition to the in-depth exploration of the role of the CDO, the reports also provide new, quantified facts about some of its main aspects. Key highlights include:
The role of the CDO is closely tied to business outcomes
More than two-thirds (68 percent) say their main task is to improve financial performance, not just to “disrupt and drive change.” In line with that, about 1 out of 2 see “top line growth” and “margin efficiency” as their main measurable goals.
Although 61 percent of CDOs report to the CEO, overlaps may exist with other C-level roles
In 68 percent of the organizations, there is also a COO, while in 52 percent, there is a CTO.
Two schools of thought exist in terms of the future of the CDO role
The first one believes that CDOs should “build towards a day when there is no need for their role.” This cohort of CDOs (33 percent) tend to work for companies that are more likely to struggle to grow and thus have more short-term goals and sometimes more fragmented capabilities.
The second one sees their role as “leading the company through the ever-evolving cycles of digital disruption.” This cohort (57 percent) tends to work for larger companies that also grow more consistently and have a clearer mandate to drive long-term change, owning an expansive footprint of capabilities and P&L responsibility.
What type of CDO do i need now?
“The upskilling is critical as it is an end-to-end adventure or journey,” said Marc Speichert, EVP and Chief Commercial Officer at Four Seasons Hotels & Resorts and Chair of the MMA’s CDO Board, in the report. “Thinking about upskilling the CDO marketing function is as critical as the rest of the organization. It is a broad scope that requires the right level of investment. You cannot copy and paste what you do in marketing to other functions because the digital upskilling of the legal function or the R&D function or supply chain will look quite different than upskilling of the marketing function. So, it is significant in terms of what it requires and in terms of resources and investment.”
This is the first of three reports in the series. The firm will be releasing the CDO Perspectives 2022 white paper later in December, and the State of CDO, Benchmark Survey quantitative report in January 2023.
MMA Global will present a free webinar series on the critical and continuing to evolve role of the Chief Digital Officer. Register here.