'The appointment of a chief digital officer is a bad idea'
The rise of the chief digital officer (CDO) role has so far been most noticeable in the US with several large companies appointing them. The perceived need for a CDO is typically to try and accelerate digital transformation and to bridge the divide that can exist between the chief marketing officer (CMO) and chief information officer (CIO).
Gartner recently predicted that by 2017 the chief marketer will spend more on IT than the information officer. Much of that technology is for digital and ecommerce initiatives. If the chief marketer is not comfortable with these new responsibilities, a CDO is seen as the solution.
About five years ago we would constantly hear from our most senior digital subscribers that they were struggling to convince the C-suite to invest properly in digital and treat it in the strategic manner it deserved. Wind forward five years, with several international recessions, numerous high-profile bankruptcies and entire business models under serious threat, and the picture is very different.
Digital’s ‘battle for the boardroom’ has been won. The case for investment in digital is not the challenge. Indeed the board has its shareholders breathing down the members’ necks impatient for faster business transformation with digital the primary catalyst and driver.
The challenge, and the frustration, for larger companies in particular is the lack of speed of change. Executing on the digital imperative, innovating in an agile way, changing the culture: these are now the biggest challenges, not strategic commitment or C-level buy-in.
One approach some companies adopt to address these challenges is to buy a start-up business in the hope that this will drive change. However, this rarely works out well as the clash of cultures is usually too great. The appointment of a CDO seems to be another route companies are taking in the hope that this will deliver the desired digital change. But I believe this is a bad idea. It is a short-term sticking plaster over a more serious underlying problem. It is essentially an admission of failure. A failure of the rest of the C-suite to be digital ‘enough’, or a failure to empower the digital teams properly within the organisation, or a failure of the various business functions to work together.
Furthermore, as digital touches so many parts of an organisation, the only way for it to be ultimately successful is for it to be collaborative. It needs to permeate everything, so concentrating authority into a single C-level position is counter-productive.
Digital is undeniably now a strategic issue rather than a tactical one and merits championing at the highest levels. So how can digital transformation be achieved without a dedicated CDO?
Firstly, and most obviously, it should be possible to have C-level executives who understand the digital landscape well enough so that a CDO is not necessary. There is a noticeable trend for executives with digital expertise to be promoted to chief marketer or the chief executive role. Jonathon Brown moved from director of online at John Lewis to CEO of M and M Direct having had various digital and brand marketing roles. Ashley Highfield became chief executive of Johnston Press. His background includes managing director and vice-president consumer and online UK for Microsoft and director of new media and technology at the BBC. Typically, to make this jump, candidates have had roles and responsibilities that are across multiple channels and they need leadership, commercial and strategy skills.
Secondly, even if the C-suite themselves are not well-versed in digital, not having experienced it firsthand throughout their career, I believe they should learn about it. If this is the case then, again, there should be no need for a CDO in whom all digital knowledge and authority is entrusted. Enlightened C-level executives, not just the chief marketer, chief technology officer or chief executive, but finance, HR and other functions are confident enough to admit they may not understand how digital marketing and media affect the business but are willing to learn. This could also include having a mentor or ‘buddy’ who may be quite junior, to experience digital firsthand.
Thirdly, if the C-suite properly empowers those with digital skills and experience who are perhaps one, or two, levels beneath them, then a CDO is not needed. Rupert Murdoch has said he feels too old to ever truly understand digital but he is smart enough to recognise its commercial importance and empower others in his organisation who do.
We are now seeing those with digital expertise being moved up the ranks into multichannel and wider roles that surely position them for a step into the C-suite. Laura Wade- Gery moved from being chief executive of Tesco.com to executive director, multichannel ecommerce at Marks & Spencer, joining the board in 2011. Andy Harding has recently become executive director, multichannel at House of Fraser following various digital and ecommerce roles. It is these types of senior managers, who understand digital and will become the C-suite (if they are not already) that companies need, not a CDO.
In the early 1900s some companies hired chief electricity officers because electricity was so new and so important it was thought someone at board-level needed to oversee it. We can look back now and chuckle at the idea of a chief electricity officer. Perhaps chief digital officers are the chief electricity officers of our age?
Ashley Friedlein is chief executive of Econsultancy, part of Centaur Media