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Digital Transformation: To CDO or not to CDO, that is the question.

Written by Martin Hermsen Comments 0

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A couple of days ago I was asked to join a Chief Digital Officer Roundtable in London* to discuss the many pitfalls and challenges a digital transformation brings to an organization. Looking at the program and the intended attendee list it promises to be a very interesting couple of days. Nonetheless, the title of the conference left me in limbo: Does an organization need a Chief Digital Officer? (CDO) The title ‘Chief Digital Officer’ holds quite some aspects.
It puts a responsibility on ‘C’-level in the organization with a dedicated ‘officer’ on the subject of ‘digital’. Given the many surveys and research papers that shout the importance of ‘digital’ to survive, or make the difference in the future competitive field, it seems quite logic to have the topic dealt with at the highest level. What’s more,it is a fact that this ‘digitalization’ is as vast as it is fast. It truly demands dedication to keep track of all the opportunities that exist. One cannot expect every member of an organization to keep up with the pace at which opportunities present themselves. However, digital shouldn’t be an extra layer on an existing structure, it’s not just an extra channel, neither is it a competence that should be isolated in a separate department. It rather should be integrated, exploited from within looking beyond the boundaries of the company and serve its (reviewed) business model and therefore should be embraced by every part of the organization. Isn’t the creation of an additional C-level contradicting this? Reality is that the contradiction is none-existing, it simply is the pragmatic human solution to handle an impactful transformation in an organization. When a large group of people with a natural (read cultural) way of working together based on dedicated scopes, roles and responsibilities (departments) are confronted with a change of context resulting in an organization wide need to develop new skills, integrating new technologies and defining new ways of working, a couple of things happen:

  • some members of the organization recognize earlier than others the opportunity the new context brings and start first isolated initiatives to proof they are right
  • other members deny the change in context or its relevance for the organization and focus on what has determined their success so far
  • an internal ‘battle’ between believers and none-believers takes place, whilst early adopting companies proof to be successful in exploiting certain aspects of the new context.

Then comes the moment that the size of the internal believers and the external opinion reaches the ‘tipping’-point and the CEO with his/her colleagues realize the new context requires their entire organization to change. This is exactly where most companies are today, the decision takers recognize that the context has changed and that they have to transform the company. Question is how? And who should lead? Is it IT? Is it marketing? How do we avoid chaos or paralysis? This is the moment a Chief Digital Officer is called to the scene, i.e. a dedicated person with a dedicated task force (internal and/or external) that takes up the responsibility of integrating Digital into the DNA of the organization to avoid loosing time and energy in the internal battle on who should lead the Digital Topic. The new role guards that every department plays its role and embraces the digital opportunities to the interest of the company despite the impact it may have on parts of certain departments. The CDO is an enabler, a catalyst. This means that the CDO and his/her team needs a couple of characteristics to be successful:

  • Empowered by the CEO and his/her board with a vision on how to transform the company
  • Knowledgeable about the opportunities Digital can offer from a business point of view
  • Technically acquainted with challenges digital can bring
  • Capable of realizing change in other departments without having a P&L of its own
  • Ready to be measured by the success of others

A mix of characteristics that is already a challenge on its own, however to be completed with maybe one of the most unnatural requirements for a department that exist: “Being successful means becoming obsolete as quick as possible.” Because this is the moment that a company has digital truly in its genes. So yes a larger organization needs a CDO, be it temporarily. Or should we call it CTO, Chief Transformation Officer? Please share your thoughts? *www.cdoroundtables.com About the author: Davy Verhulst is managing partner of Dicitas Consulting Belux. Dicitas Consulting helps organizations to achieve breakthrough business performance improvement with digital innovation thru digital transformation. www.dicitasconsulting.com

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