Sitting purposefully at the intersection of technology strategy and business operations, the Chief Digital Officer role has become increasingly prominent. For this episode, we speak with one of the most influential people in the CDO world.

David Mathison is the curator of the Chief Digital Officer Summit and founder of the CDO Club. He is the world’s leading authority on Chief Digital and Data officers, and has been quoted by the Financial Times, the Wall Street Journal, Computerworld, McKinsey & Company, MIT Sloan Management Review, CMS Wire, ZDNet, Fierce CIO, and I-CIO, among others.He has given keynote presentations everywhere from Columbia University to the United Nations (3 times in 2010), from Amsterdam to Zagreb.

Transcript

Michael Krigsman:

(00:29) Welcome to episode number 149 of CXOTalk. I am name is Michael Krigsman and I am thrilled to be here today with David Mathison, who is the founder of the CDO Club, the Chief Digital Officer Club. And he also runs the CDO Summit as well as a number of other conferences. He is an author and really he’s at the center of the Chief Digital Officer world. And David is joining us right now from Australia, David how are you?

David Mathison:

(01:05) Fantastic, thanks to having me on Michael.

Michael Krigsman:

(01:07) Hey it’s great to see you. so David, tell us about the CDO Summit and the CDO Club and tell us about what you do.

David Mathison:         

(01:17) Sounds good. Well first of all I want to welcome everybody, greetings from the future. it’s already tomorrow here in Sydney. It’s kind of exciting I think the show is 3 PM Friday Eastern time, but it’s already 7AM Saturday here, so if anybody wants you know any tips on the football games tomorrow, I can let you know who won, stock tips, any advice you would like.

(01:43) And good tidings from the future. I think it’s always interesting to be a day ahead, especially with someone like you Michael who seems to be years ahead of everybody else. Thanks to your contribution to ZDNet and also all the work you’ve done with CXOTalk and you know, all the incredible people you had on and that you’ve interviewed. And I’m just honored that you are including me in that incredible group. And I hope everybody out there listens to some of your previous episodes because they are just incredible.

Michael Krigsman:

(02:13) Well, thank you so much so tell us about the CDO Club and CDO Summit.

David Mathison:

(02:18) Sure, you know the CDO Club started, it was actually incubated in roughly 2010/2011. I noticed that there was a lot of Chief Digital Officers being hired and nobody was really tracking it. And by nobody I mean you know the organizations that you would normally think would want to track such an influential title. That would be the big analysts like Gartner and Forrester and others and also big executive search firms. And when you’ve got a title that has a tremendous amount of demand, a very limited supply of executive leaders, you would think that you know the big firms like Russell Reynolds and Spencer Stuart and Egon Zehnder and others would be all over it because that tremendous demand and limited supply leads to extremely high compensation. And of course, executive search firms get a percentage of the first year cat com so it would be for them to address this field.

(03:18) So, I just started tracking it in 2011 and putting all these people into a database and decided I was you know at the time I was incubating this and an executive search firm And realized that the best way to get a CEO or a board member to call me back to try to do a search would be well why not create a summit and why not create a club, and also maybe even create a white paper you know a thought leadership piece.

(03:46) Might be a good way to get the phone to ring you know, to invite for example, Vivian Schiller who at the time was, just out of the CEO of NPR and she then became CEO of NBC News. Or Jonathan Miller for example who was Chief Digital Officer at News Corp reporting write-up to Rupert Murdoch and they did return my calls and I invited them to the summit.

(04:07) But the first thing I created was the CDO Club. We created that on LinkedIn in 2011 and we had so much demand not only from other CDOs to join the group, but from outside vendors who really wanted to access this you know, title that had increasingly decision making authority on budgets and head counts.

(04:29) So creating the club was our first step and really building community around this title, and actually you know, just this year we actually shortened it to an acronym of CDO Club, and the reason we did that was because we also seen over the last

Michael Krigsman:

(00:29) Welcome to episode number 149 of CXOTalk. I am name is Michael Krigsman and I am thrilled to be here today with David Mathison, who is the founder of the CDO Club, the Chief Digital Officer Club. And he also runs the CDO Summit as well as a number of other conferences. He is an author and really he’s at the center of the Chief Digital Officer world. And David is joining us right now from Australia, David how are you?

David Mathison:

(01:05) Fantastic, thanks to having me on Michael.

Michael Krigsman:

(01:07) Hey it’s great to see you. so David, tell us about the CDO Summit and the CDO Club and tell us about what you do.

David Mathison:         

(01:17) Sounds good. Well first of all I want to welcome everybody, greetings from the future. it’s already tomorrow here in Sydney. It’s kind of exciting I think the show is 3 PM Friday Eastern time, but it’s already 7AM Saturday here, so if anybody wants you know any tips on the football games tomorrow, I can let you know who won, stock tips, any advice you would like.

(01:43) And good tidings from the future. I think it’s always interesting to be a day ahead, especially with someone like you Michael who seems to be years ahead of everybody else. Thanks to your contribution to ZDNet and also all the work you’ve done with CXOTalk and you know, all the incredible people you had on and that you’ve interviewed. And I’m just honored that you are including me in that incredible group. And I hope everybody out there listens to some of your previous episodes because they are just incredible.

Michael Krigsman:

(02:13) Well, thank you so much so tell us about the CDO Club and CDO Summit.

David Mathison:

(02:18) Sure, you know the CDO Club started, it was actually incubated in roughly 2010/2011. I noticed that there was a lot of Chief Digital Officers being hired and nobody was really tracking it. And by nobody I mean you know the organizations that you would normally think would want to track such an influential title. That would be the big analysts like Gartner and Forrester and others and also big executive search firms. And when you’ve got a title that has a tremendous amount of demand, a very limited supply of executive leaders, you would think that you know the big firms like Russell Reynolds and Spencer Stuart and Egon Zehnder and others would be all over it because that tremendous demand and limited supply leads to extremely high compensation. And of course, executive search firms get a percentage of the first year cat com so it would be for them to address this field.

(03:18) So, I just started tracking it in 2011 and putting all these people into a database and decided I was you know at the time I was incubating this and an executive search firm And realized that the best way to get a CEO or a board member to call me back to try to do a search would be well why not create a summit and why not create a club, and also maybe even create a white paper you know a thought leadership piece.

(03:46) Might be a good way to get the phone to ring you know, to invite for example, Vivian Schiller who at the time was, just out of the CEO of NPR and she then became CEO of NBC News. Or Jonathan Miller for example who was Chief Digital Officer at News Corp reporting write-up to Rupert Murdoch and they did return my calls and I invited them to the summit.

(04:07) But the first thing I created was the CDO Club. We created that on LinkedIn in 2011 and we had so much demand not only from other CDOs to join the group, but from outside vendors who really wanted to access this you know, title that had increasingly decision making authority on budgets and head counts.

(04:29) So creating the club was our first step and really building community around this title, and actually you know, just this year we actually shortened it to an acronym of CDO Club, and the reason we did that was because we also seen over the last four or five years an increase of the hiring of Chief Data Officers, so it might be kind of worthwhile explaining the difference. But that was the genesis of the CDO Club 2010/2011, and then by 2013 we had created the first ever CDO Summit where we brought together top Chief Digital Officers from all over the country and brought them to Thomson Reuters in New York City to really network and share you know really empathize with each other and the challenges of the role and things like that.

Michael Krigsman:

(05:19) And so let’s talk about the CDO role, what is a Chief Digital Officer?

David Mathison:

(05:27) Well you know I would differentiate Chief Digital from Chief Data and maybe this is a good time to do that. Chief Digital Officers are really in charge of digital transformation in organization, and I also want to make sure it’s as inclusive as possible in two big ways right.

(05:44) Inclusive meaning Chief digital Officers, there are other titles that do the same role but just have a different title. Like there are Chief Marketing Officers who are doing this, Chief Technologists, CIOs, CTOs. But you know the sort of native Chief Digital Officer has usually been brought in to take on digital transformation, usually build out a P and L, have PL responsibility, and build out a profit center, sometimes at the expense of legacy and analog revenue streams, sometimes to enhance those and sometimes to build out brand new revenue streams and brand new businesses.

(06:26) We saw this in the very beginning Michael as a very I would say a defensive posture. So I guess the question is you know, why did this happen in the first place that would kind of define the role. And the first Chief Digital Officer ever hired, we’d like to say it was Jason Hirschhorn. In 2005, MTV hired Jason and I think that was really a defensive posture against probably the most powerful force in the economy today and that is the empowered customer.

(06:59) You know the empowered customer is if you think about the days of Master and what happened in the music industry is that the empowered customer basically decimated not only companies but also an entire industry. It reshaped the entire industry and what happened was your customers became your competitors. And that’s a kind of a phrase worth repeating. I mean their customers became their fiercest competitors.

(07:25) So what do you do when your customer becomes your competitor and what I mean by that is, with the ability to create your own music you now on a lap top instead of an expensive studio, and then with the ability to share that on a peer-to-peer platform, not only share your own music but share other artists music, all of a sudden now your customers are now your competitors.

(07:46) So now what we see is that same phenomenon happening in every industry and we can dig into that a little more deeply and that’s why I believe we’re seeing CDOs being hired in every industry, because that same phenomenon that tore through music is now ripping through every industry in the world and across the planet. So I think that’s why we’re seeing so many Chief digital Officers being hired.

(08:08) So having said that you know, what the Chie digital Officer does really to do it any justice Michael, you’ve got to look at it by sector, because there are people in Government Service or you know for example Mark Dearnley who is the Chief Digital Officer at the HMRC which is the UK equivalent of the IRS. He’s got a tremendous transformational task. Can you imagine transforming the IRS to be completely digital you know from analog and paper.

(08:39) This is a massive undertaking, or if you look at what Mike Bracken in the UKs Government Digital service did in the UK to basically redo the entire the IT procurement process and clean up their website or look at what Racheal Howe in New York City and what New York state did in New York City. You know, the types of work she did there was transformation. You know, it made it easier and I guess again there is this sort of core focus on the customer experience. It doesn’t matter if you are a for-profit like David Payne at Gannett or USA Today, or Racheal at New York City, or Mike Bracken at Government Digital Services in the UK.

(09:24) The kind of thread that goes through everything that they’re doing is almost an obsessive focus on the customer and making it, if you can imagine if you could make Government website as easy to use as Amazon or easy to use as Google you know that’s the role that a Chief Digital Officer is playing in the public sector. And then in the private sector as I said before you know, it’s anything from transforming the organization and I would say to, it’s not just a sales goal. It means transforming the entire organization and not just a silo. That means transforming operations, marketing, and HR, and finance. These are big roles, an so that’s what I’d say.

(10:07) There’s a great report that just came out by McKinsey. The title of the article I think is, The new CDOs the new transformer and Chief and they got it right. Now maybe 10 years ago this role was mostly a token role to show the world that you get it. You know you get digital and you’ve hired a Chief Digital Officer. Today they’re taking on a much more broader role and a deeper role in transforming an organization.

Michael Krigsman:

(10:34) And so you say that the common thread then is this obsession with the customer.

David Mathison:

(10:44) Yeah I think the best example of that is what Mike Bracken did at Government Digital Service in the UK. Here’s a good example, you think a digital guy is going to come in and revamp the website you know and that’s it and may be add more pages to an already loaded website. What Mike did first he actually eliminated thousands of pages. And what I think a frustration of a lot of American I would call them customers you know a government website would have is you go to the website and you want to have something done.

(11:08) You want to get a permit in Rhode Island for fishing or you wanted to get a driver’s license and not sit at the MV all day. And you end up going to the website and you see pictures of your bureaucrat’s right and you see you know they’re out there kissing babies and doing all kinds of stuff that has nothing to do with what your ultimate goal is which to get something done.

(11:39) And so it’s almost this obsession about making the customer journey extremely easy and extremely fulfilling. And I think that’s one of the main success of Government Digital Service and I think they’re the exemplar now and the rest of the world is really looking at them as to how to do a better job in the government.

(12:00) And by the way you know, right after the UK hired a Chief Digital Officer just you know in April of last year, the United States followed suit and hired Jason Goldman as Chief Digital Officer at The White House.

(12:13) Now Jason again these people, these Chief Digital Officers they’re not just titles, these are incredibly talented individuals. Jason arguably was the one who created the self-publishing revolution. He created you know co-founded Pyra Labs which was then acquired by then called Blogger right that was acquired by Google.

(12:34) And after that he was the third co-founder of Twitter with Jack Dorsey, kind of the unknown Beatle or the fifth Beatle who basically then created the micro-blogging revolution with Twitter. so why would The White House hire a guy like this, again you know the goal is communications and I think it sends a real statement to the community on just how focused governments should be on enabling the voices of their constituents and it shouldn’t give our leaders ‘speaking to us’, but also enabling a conversation and enabling communication with their constituents that should be the focus.

(13:14) And by the way to it’s not surprising to me that The White House now has hired a Chief Data Officer as well as a Chief Digital Officer. Right about the same time they hired DJ Patil. And DJ for those in the audience may know three or four years ago wrote the seminal article in Harvard Business Review called, the Chief Data Officers that the sexiest job of the 21st Century. I don’t know how self-serving that was but now three years later he’s the Chief Data Officer at the White House.

(13:42) And again I think the focus of the goal should be for a data officer is getting datasets out of these archives and out of these arcane silos inside of government and get them out into the population where we can actually crowd source applications on them, and build interesting applications on top of these datasets. And some of the results of that have been fascinating.

(14:05) You know like when you finally release that data and let the crowd and you know, the opportunity for the crowd to actually build some interesting applications, you get all kinds of interesting stuff being done. Like in New York you can now go to the website and see where most violent crimes take place. This helps the police force. This helps community activists or you know the pot hole app. The famous pot hole app you get sick and tired of seeing that pot hole in front of your house, so why not take a photo of it with your cell phone, and upload it through GPS and you know again alert the community and hopefully build a consensus around let’s get something done in our communities.

Michael Krigsman:

(14:40) So David, very often we tend to think of Chief Digital Officers as being focused on marketing and that’s really not the case. You’re describing a range of applications that go to core operations and also to core customer benefit that’s far beyond marketing. But before you answer I just want to say a shout out to Livestream. This is our new video infrastructure using Livestream and CXOTalk now is being broadcast on their homepage, so than you to Livestream. So David CDOs beyond marketing.

David Mathison:

(15:21) Yeah, you know I’m appreciative of the Chief Marketing Technologists position and what efforts they’re putting in but you know normally what we see is on the marketing side I maybe want to differentiate what the marketing folks are responsible for and what we see these Chief Digital Officers being responsible for and why the position was created in the first place.

(15:45) I mean there was a vacuum and the vacuum being that age old dilemma between the marketing side and the technology side and the disconnect between the two. And  I think for example, what is marketing responsible for? Well they own the brand. Chief Digital Officers don’t really own the brand, they don’t do brand management. And they also own the customer to a large degree, they own the messaging as well.

(16:12) So you see Chief Marketing Officers and Chief Marketing Technologists also in a lot of organizations being responsible for customer insights and analytics. This has gone back forever. This is their core responsibility.

(16:25) Now it used to be 10 years ago that the marketing team would have to go to IT in order to get a report done on the database to find out information about the customers. These days marketing doesn’t have to rely on IT. they can take their credit card or use PayPal and use Salesforce or any other dashboard out there to get real time information. Real time information from mobile data, from social media inputs, from you know Salesforce, from other online applications, then they’re really routing around the IT department.

(16:55) So that’s a phenomenon that’s relatively new so it’s enhances their role. But when you think about a marketing person being responsible for digitally transforming the HR organization that really has never happened; it’s not a career path. It’s not something they’ve learned in school or in their vocation. And I think the same thing is true with HR – not just with HR but in finance or operations. So that’s why I think you’ve seen this growth of the CDO position that is really responsible for an overall transformation.

(17:26) I would say also there are no CMOs in government right, you don’t have a Chief Marketing Officer at the White House or New York State or New York City, so because there was a lack of leadership in owning the customer and being responsible for the customer journey. Again you’ve seen Chief Digital Officers and Chief Data Officers being hired and I don’t think we’ll ever see a career path of a Chief Marketing Officer going to be Chief Data Officer at the White house or New York State or New York City or San Francisco.

(18:00) It’s just not a career path you would ever see because it’s a completely different set of responsibilities. So you know I would say that the overlap to in the IT department, the IT department has been outsourced let’s say their responsibilities are being outsourced to the cloud, and the infrastructure is being outsourced to the cloud and so their role is becoming marginalized.

(18:26) And those who were smart enough, I think those CIOs and CTOs who were wise enough to take on digital transformation responsibilities and also data. I mean data is a role and responsibility that typically has been inside IT. so we’re seeing a lot of chief Data Officers coming out of the IT role. And you know again I think that for a smart or a career savvy CIO will start to take on these responsibilities, and it’s not conjecture on my part. I’m not forecasting this. This has already happened Michael and I’ll give some core examples right.

(19:06) I mean Steven Laster was CIO at Harvard University. Three years ago he became Chief Digital Officer at McMillan. That’s a great move you know he’s an educated guy from education and he’s in an organization now focused on education.

(19:20) Look at Mike Dearnley who we mentioned earlier who’s Chief Digital and Information Officer at HMRC. That’s a hybrid title; CDIO right, Chief Digital and Information Officer. But if you look at his background it makes perfect sense.

(19:35) The guy was Chief Information Officer at Cable and Wireless had a massive brief you know with a massive responsibility; a lot of people reporting to him, and then he became CIO most recently at Vodafone. We had thousands of people multi-million dollar budget, so no surprise that a guy like that become Chief Digital and Information Officer of the equivalent of the IRS in the UK.

(19:59) And the same thing on the marketing side. We’re seeing a lot of hybrid titles for example, people like Steven Roy who’s at Sky. He was Chief Marketing Officer and now he’s Chief digital and Marketing Officer. He’s increased his responsibilities, and look at Joanna Scarlet, who’ll be speaking at our summit in New York in April. She was Chief Marketing Officer at BT, British Telecom and she’s now Chief Digital and Marketing Officer.

(20:25) So we want to be as inclusive as possible about this title because there are a lot of people with different titles, but they have very similar responsibilities.

Michael Krigsman:

(20:35) So David, let me play devil’s advocate in that sense given the breadth or the scope of what the title can encompass, is it possible that the Chief Digital Officer role really is a kind of temporary role and most of these functions should be owned by IT, by operations, by marketing. Is that possible?

David Mathison:

(21:02) It is possible and you know I think you’ll see it on the evolution on each organization, and how long do you think that that digital transformation will take, and I don’t know about you but you know Michael you’ve been around a long time and you’ve done this for a while.

(21:18) My first job was actually 1981, I was a 21 year old kid and I was a data entry clerk at London Electricity Board in London. And you know, I’m scratching my head thinking why are we here now 30 years later and we’re just starting to hire Chief Data Officers? You know again we go back to IT and we say that in the 80s the CIO title came out of the morass of the MIS group because organizations realized there was a strategic value of having infrastructure, having computing power.

(21:50) Well now computing power is getting less and less expensive; Moore’s Law has proved that. everything’s being outsources to the cloud and the real strategic asset now is the data that sits on that infrastructure and even more importantly the insights on analytics you glean from that data.

(22:07) So I would imagine that let’s take a look at Chief Digital first and then Chief Data and see if it is a transitional post, and the canaries in the coalmine would be the first companies that would hire Chief Digital Officers and they were mostly in the early days media.

(22:22) They were you know, MTV hired the first one, Jason Hirschhorn in 2005. NBC Universal the next year in 2006 hired George (Calycroft.?). they were defensive postures against the disruption caused by Napster.

(22:41) Well those companies now they’re still doing digital transformation right; they’re still not done in their journey. And we’ve got people like David Payne, who’s been Chief Digital Officer at Gannett, USA Today for five years.

(22:53) And now if that was the canary in the coalmine, that same empowered customer, where the customer has become your competitor is now hitting every industry. Now let’s look at the industries that we’re talking about here.

(23:05) There’s Über right? Über has basically disrupted the transportation industry and they don’t even own one car. Or Airbnb, and basically Airbnb, it took Hilton hotels 100 years to get 900,000 rooms. It only took Airbnb 4 years to get there and they don’t own one room.

(23:26) It’s their own customers that are giving out this excess capacity and sharing that excess capacity of their rooms in their house or extra apartments, and in the case of taxi’s and limousines the same phenomenon is happening. So even in banking and finance you can now get a loan from and also be able to do wire transfers without having to go into a bank with using everything from you know Society 1 to other services and they don’t even own a bank brand, so that is the empowered customer there again.

(24:00) I can get a loan from Lending Tree from my friends and this has completely disrupted banking, so my response to your question is you know, how long will it take for a company to digitally transform, and maybe throw it back at you, how long do you think it’ll take the IRS to become a digital organization? Two year.

Michael Krigsman:

(24:20) Yeah well I’m not sure, but for the IRS I don’t know. What does infinity translate to in terms of time?

David Mathison:

(24:27) That’s my point. You know and so the other point of this is as I say you’ll look at the canaries in the coalmine of media and publishing that have had Chief digital Officers for now you know five and six years. Those people that have been most successful at digital transformation are actually becoming CEOs and Board Directors. And again, this isn’t conjecture on my part; we actually started tracking this in 2011 because we wanted to prove the macerators that were saying, ‘These Chief Digital Officers, they’re here today and gone tomorrow. By the time that company transforms, they’re not necessary’, Well  you know may be but they’re actually becoming CEOs of those organization.

Michael Krigsman:

(25:10) But David, sorry I didn’t mean to interrupt, but Frank Scavo on Twitter makes an interesting comment and it was one that I was going to ask as well which is, if you have a business that is in transition, so for example media companies have been forced to respond to digital, so they’ve had no choice. But where you have a company like Airbnb or Amazon or Über which is digital through its DNA, you don’t really need and these companies typically don’t have a Chief Digital Officer because there is no ‘digital silo’ it’s just all digital. And so getting back to this question of being a temporary kind of role, once a company goes through it’s digital transformation, does it need to have a Chief Digital Officer?

David Mathison:

(26:09) Yeah first point I couldn’t agree more. You know, you don’t need a Chief Digital Officer at Google, Netflix, or Amazon any more than the BBC needs a Chief Radio Officer. It’s just not necessary. You’re not seeing them there and we never have.

(26:22) So again we’ve been tracking this phenomenon since conception and the digital natives just don’t need them. Those are the ones doing the disrupting. It’s the incumbents thatneed Chief Digital Officers, but again I want to be broader than that and say that Chief Digital Officers are found not only at for-profit organizations, but they’re found at the Michael J. Fox Foundation for Parkinson’s Research, Bono’s Red you know non-profits, the Museum of Natural History, there’s the Metropolitan Museum. There’s two at MIT, there’s one at UCSB, Perry Hewitt at Harvard, Sree Sreenivasan who used to be at Columbia.

(26:59) So you’re right on the first point, there is no need for a Chief Digital Officer and as a digital native I have no absolutely no argument there I completely agree. But as far as your second question which is, once a company becomes a digital native, do they still need a Chief Digital Officer? Again, my point is that we’ve been tracking this CDO/CEO phenomenon since its conception, and it’s up on our website.

(27:23) All you have to do is go to CDO club dot com and click on the Hall of Fame, and you can see that you know three years ago eight CDOs became CEOs of their company. And last year nine CDOs became CEOs, and this year already, I should say in 2015, 11 CDOs became CEOs of their company.

(27:44) My point being that I believe, and I’m in complete agreement with you. Once a company becomes I believe digital through and through, through its core, the head of that organization and everyone underneath them should have digital in their DNA. It should absolutely the first and foremost thing they think about is making the customer journey as seamless as possible and putting in again, and obsessive focus and concentration on the customer. And that’s what we’re seeing.

(28:15) And I go back again to saying that if you go to that page, the Hall of Fame on CDOclub dot com, you’ll notice that a lot of them are in media and a lot of them are in publishing. Well that again is because I feel and I would love to hear people’s thoughts on that, I feel that those were the first industries that started hiring these people.

(20:34) But now that we’re seeing the long tail take off with hiring those CDOs to deal with the disruption and financial services, and hotels from Airbnb, and taxis, and transportation from the Über’s of the world, we’re going to see down the road that these are going to be – I shouldn’t even say it down the road; it’s already happening now, that companies are hiring Chief Digital Officers as succession plans to the CEO, that they know that they need to get there. And the only way to get there is hire seasoned talent that knows how to bring the organization and it’s going to eventually replace the CEO and run the show.

Michael Krigsman:

(29:10) What’s very interesting to me about this is the CDO as you were describing is very clearly a business role, and that’s reflected by in the fact of the transition from a number of CDOs to CDO, which you see a man Chief Marketing Officers and Chief Information Officers, you just don’t see that happening quite as frequently.

David Mathison:

(29:33) You don’t, and a lot of the times you get the CFO taking on the reins of a CEO when financial you know issues or M&A or you know big mergers and acquisitions are taking place. Sometimes you see the COO as the successor to the CEO. I don’t believe we’ve ever seen a time in human history or you know industrial history, where in such a short period of time the CDO title has only been around for 10 years, to see such an aggressive growth or career path of a CDO taking over the reins.

(30:06) So here’s what I want I think if I can leave this conversation with two data points that blew my mind. This will explain it all. This will explain why this phenomenon is happening. We did a deep dive into our database, and we’re the only ones who have got a real good feel or a finger on the pulse of every Chief Digital Officer out there. So we did a deep dive because we wanted to know, how is it possible that so many CDO are becoming CEO, and here’s two stats that blew my mind Michael.

(30:35) One is that in the advertising industry alone, 60% of Chief Digital Officers were previously CEO, President, or GM; that’s an astounding figure. That makes sense, that explains why so many CDOs are becoming CEO is because they already were CEO, GM, or President.

(30:57) And some good examples they are our Jonathan Gunning used to be a CEO, used to be a GM over at Tribal, and then he became Chief Digital Officer and now he is CEO at Tribal in Chicago.

(31:07) In the media sector was the other big statistic. We found through our analysis that over 30% of Chief Digital Officers was in media and publishing used to be CEO, GM, or President. A couple of big examples there if you look at Vivian Shiller, Vivian Schiller she did some great you know MD work when she was with New York Times and Discovery, but then she was CEO of NPR, National Public Radio. She could take what you would assume would be a step down when she moved from CEO of NPR, to become Chief Digital Officer at NBC News. But again, you know this is again it makes sense that these CDOs are becoming CEO because they used to be CEOs before.

(31:51) So again, I think that’s why I like to put out the Hall of Fame to dispel a lot of myths, especially the Foresters throwing out, that they are basically saying that number one, it’s a transitional position and most of these people are coming from marketing or IT. What we’re seeing is that they’re not coming from marketing or IT. They know a lot about marketing and they know a lot about technology, but they’re mainly coming up from a GM track from you know business builders, P&L responsibility, managing people on multimillion dollar budgets, these people have general management and President, and CEO experience.

Michael Krigsman:

(32:26) So, these folks again clearly our business people foremost, but they’re relying upon technology to help enable the business deliver those business benefits.

David Mathison:

(32:38) Absolutely and you know, you see a lot of them being pulled from the digital natives. You know like a good example of that is, Atif Rafique, going back to the point that they are business people. This was a guy who was at AOL Ventures really early on, so he gets the finance piece you know the PE and the VCPs, but then he was General Manager of Amazon’s Kindle. And you know, you see this happening a lot where they pulled him out of a digital native where he’s run a digital business and they bring him into an organization like to McDonald’s.

(33:07) Another example is Sean Cornwell over in Travelex, a global financial services company. He comes out of again, the PayPal Mafia, you know he can get somebody as a talent manager or as an executive recruiter, if you can pull somebody who’s been a GM at PayPal or another business like at Amazon or Kindle, those other perfect people to pull back into an incumbent, usually in the same sector, but Atif Rafique example at McDonald’s you know he wasn’t in that sector at all; he was doing the Kindle, a General Manager for Kindle and they brought him into McDonald’s.

(33:43) You know, the other piece of this is not just a strategic role in the same sector, but what I love about CDOs is we’re also tracking all those CDOs who become Board Directors of public companies. It’s on that same page, the Hall of Fame page on CDOClub dot com, and you know Adam Brotman at Starbucks is a great example. You know, he’s been there six years and yet he just made Board Director at Neiman Marcus. So you have got the guy who was basically in beverages, you could consider it retail but it’s really a clothing chain and he’s on the board, and again it speaks to the strategic value that Chief Digital Officers bring that they will pull somebody in from a completely different sector to be on their Board of Directors.

(34:27) And by the way, getting onto the Board of Directors of a publicly traded company is not easy. Not only do you have to have all the criteria to be on an audit committee or a finance committee, but you also have to go through significant background checks and sometimes even depending on the company, whether an aerospace or other services, even background clearances and security clearances. So, we only track those CDOs who are on the boards of publicly traded companies, and not those who are on you know the boards for example of the Museum of natural, or you know start-ups or things like that where there isn’t as much criteria for shareholders and for investors to make sure that they’re clearing certain bars. So again, I think it speaks to just how strategic this role is that they’re being pulled onto boards as well.

Michael Krigsman:

(35:11) And in the case of Starbucks, they have been using digital to really transform their business. Think about what they’re doing with mobile and their cards and phones, it’s pretty extraordinary. I mean it goes right to the heart of the consumer experience and enabling, and we’re talking about selling coffee. So there’s this big technical infrastructure around the selling and the purchasing of coffee to make it easier and more accessible for the consumer in every possible way.

David Mathison:

(35:42) I think that’s Adams the brilliance, you know we named Adam Chief Digital Officer of the year last year. We’ve named them CDO of the year every year since conception. And Adam deserved that award for being on the board for focusing relentlessly on the customer experience. You’re absolutely right, and it speaks to, I think it was Frank who asked the question, you know once these companies have transformed, do they still need a Chief Digital Officer; Adams now been there six years. Again, Ellie Hirschhorn was at Simon and Schuster for five years. Tom Helm at New York Public Radio is going on five years.

(36:21) The average CMO tenure is 18 months, let’s be generous and say two years, so where is the revolving door really you know. Again, I speak to Forester directly on this, I’d love to hear your thoughts, because Forrester in particular continues to throw stones at the CDO title, when you know it’s the CMO whose job it seems to be in a revolving door. CDOs seem to have a lengthy tenure, and I don’t know when digital transformation ends.

(36:44) If Adam is still at Starbucks you know, he’s even outlasted Stephen Gillette, the CIO there and became president and digital Best By, now COO over at semantic, Adams still at Starbucks and still kicking ass and still you know constantly reinventing the consumer experience, and quite frankly I don’t think his job will end any time soon so again I threw that back at the naysayers that say you know, well wants a business is digital wont the CDO disappear.

((37:14) Again, you know I’ve been doing this since 1981. I’ve got grey hair now, and there are a lot of organizations that have got a long way to go before they could be considered in my opinion to be digitally transformed. And you know take again, not just for profits but look at the public sector, look at how long it will take New York State to really get their website act together or the state of Rhode Island, or you know any of the departments, the Department of Treasury, the Department of commerce, the Department of energy you know, we have a long way to go.

Michael Krigsman:

(37:42) Well at some point, innovation the path of digital transformation becomes almost synonymous with the path of innovation enabled by digital technology. So there’s a whole set of culture shifts and then new product development and the impact on marketing. Of course, but what is the impact on operations. David, we have about five minutes left. You have a broad overview, what are some of your tips or pieces of advice for people who either want to be a CDO or who are a CDO, and what would you advise them to be really successful in that role.

David Mathison:

(38:26) You know, we’ve got a tremendous skills shortage right now. Any time is you have got a tremendous amount of demand and a very limited supply, salaries go through the roof, you know, all kinds of opportunities are there for the picking right now. And I would say, or the best thing I would say for the want to be CDOs and we’ll get to the folks who already are and how to do their job better. But if you really want to be, the most important thing is education training, on-the-job training. Take on those responsibilities. Get more deeper into consumer insights and analytics, deeper into the datasets, have a relentless focus on the customer. Be obsessive about the customer’s journey and making it easier for them to do their jobs.

(39:14) I would say also, be aware of this phenomenon of the empowered customer. What can you do, you know Jeremiah Owyang, I’m sure is a mutual friend of ours from the crowd companies. We had him as a featured speaker last year in New York, and he really outlined for me the disruption that’s happening, and as you rightly point out the opposite side of the coin of disruption is innovation entrepreneurialism, and it’s really the incumbents that are dealing with all these disrupters that are really entrepreneurs.

(39:46) But he rightly points out, Jeremiah rightly points out that it’s this maker movement and the sharing of economy and the collaborative of economy that are disrupting all of these traditionally staid industries, and again, what happens when your customer becomes your competitor? We all have to get our heads around that major thought, because that is the biggest disrupting factor, and the biggest opportunity that we own our face in every industry.

(40:15) So he says that the ultimate manifestation of the collaborative economy is when the customer becomes the company. And I want to repeat that, because that’s a core mission statement I think for every CDO in every industry, that the ultimate manifestation of the collaborative economy is when the customer becomes the company.

(40:32) Think about it with Über. The customer is the driver. The passenger has now become the driver. In Airbnb, the person who uses stay at the hotel is now sharing their apartments and there are extra rooms, they’re now competing with the hotels that they used to be a customer of. So we have to get our heads around that core.

(40:53) And what we are doing as an example at the CDO Club, you know we want our customers, our CDOs to become the company. So we’ve launched the CDO Academy, we’ve launched the CDO Community. You’re part of that Michael, do you know what I mean, you know we’re bringing all of these collaborators into the company so that you can share your knowledge, and you can help train your peers and your colleagues, and the same thing is true at the CDO Academy. It gives you the ability for our CDOs who are really smart people. Some of them are great at insights and analytics. Some of them are really good at SEO and SEM and there are other CDOs who are weak in those fields.

(41:30) So what better way to embrace the collaborative economy by having our CDOs train each other, and educate, and inform each other. And I think that’s what Facebook does. You know, it allows people to educate, entertain, and inform each other instead of having to go out to major media firms to be informed and entertained.

(41:49) So this concept of the empowered customer I think it’s something that’s the core thing that we all need to get our heads around in the future.

Michael Krigsman:

(41:59) Okay, well we are just about out of time and I know you have a conference that’s coming up in New York City. You’re holding conferences around the world, but I know about the one in New York City because I’m going to be involved in it. So do you want to close out by just tell us a little bit about your conference.

David Mathison:

(42:18) Sure we are about to do one in Sydney, it’s our first time here, Sydney Australia and that comes up on March 1 at the UTS Business School. We are at our fourth year in New York which is pretty exciting, and the four years have flown by. We are proud to be and excited to be back at Thomson Reuters, the New York City writers at 3 Times Square. We’ve got an incredible lineup of speakers already. Harvey Nash is going to be there, we’ve got Jeff Hayzlett from the C-Suite Network. We’ve got Larry Kramer who’s been all around you know CBS and now on the board of Harvard. We’ve also got some other incredible speakers from Applause. Banners on April 27 in New York City, but interestingly enough, I just want to throw out we also do events in London and in Toronto and in Amsterdam, but we would be delighted to have some CDO club members from abroad. You know, I was at a CDO summit at Istanbul, Turkey of all places, run by the the indefatigable Ali Mulla of Istanbul, Turkey.

(43:19) He did an incredible job, you know over 100 people in Istanbul in November, and we are about to launch the CDO club in Israel in Tel Aviv. We’ve got some coming up in May with the ex-CIO of EY in Israel, Amit Khamah who also, both Ali and Amit from Turkey and Israel will be at our work New York summit. But we are just excited that again if you want to make our customers the company, we’ve had some great input from people from all over the world who want to start affiliate CDO clubs and create CDO summits in other countries.

Michael Krigsman:

(43:54) Fantastic well you are definitely the guy when it comes to knowledge, and the stats and the people and what’s going on in the world of Chief Digital Officers, so thank you so much. We’ve been talking with David Mathison, who is the founder of the CDO Summit and the CDO Club and who is, it’s an early Saturday morning in Sydney Australia and you’re talking to us from your hotel room, so thanks a lot David.

David Mathison:

(44:22) Thank you Michael.

Michael Krigsman:

(44:24) And everybody we have great shows coming up and I hope you will come back next week. Thanks a lot, bye.

Companies mentioned in today’s show:

Airbnb                         www.airbnb.com

Amazon                       www.amazon.com

BBC                             www.bbc.co.uk

Best Buy                      www.bestbuy.com

Blogger                       www.blogger.com

CDO Club                    http://cdoclub.com 

CDO Summit               http://cdosummit.com

C-Suite Network          www.c-suitenetwork.com 

Egon Zehnder              www.egonzehnder.com

Forrester                     www.forrester.com

Gannett                       www.gannett.com

Gartner                       www.gartner.com

Google                         www.google.com

HMRC                          www.gov.uk

Kindle                          https://kindle.amazon.com

Lending Tree               www.lendingtree.com

LinkedIn                       www.linkedin.com

McDonald’s                 www.mcdonalds.com

McKinsey                     www.mckinsey.com

MTV                            www.mtv.com

NBC News                   www.nbcnews.com

Neiman Marcus          www.neimanmarcus.com

New York Public Radio www.nypublicradio.org

News Corp                   www.newscorp.com 

NPR                             www.npr.org

Pyra Lab                      www.pyralab.com

Russell Reynolds         www.russellreynolds.com

Simon & Schuster        www.simonandschuster.com

Spencer Stuart            www.spencerstuart.com

Starbuck                      www.starbucks.com

Thomson Reuters        www.thomsonreuters.com

Travelex                      www.travelex.com

Tribal                           www.tribal.com

Twitter                        www.twitter.com

Uber                            www.uber.com

USA Today                   www.usatoday.com

Vodafone                     www.vodafone.com 

ZDNet                          www.zdnet.com

 

Article by McKinsey:  

http://www.mckinsey.com/insights/organization/transformer_in_chief_the_new_chief_digital_officer

Article by DJ Patil

https://hbr.org/2012/10/data-scientist-the-sexiest-job-of-the-21st-century/

David Mathison:

LinkedIn           https://www.linkedin.com/in/davidmathison