The Chief Digital Officer role is relatively new and still evolving. Because digital business includes a broad scope with implications for business model, marketing, operations, supply chain, and other basic corporate functions, the CDO role itself has a broad mandate. A key part of the Chief Digital Officer role involves managing tensions because the need for organizational stability and predictability relative to the desire for disruption and change.
For this reason, Chief Digital Officers must help drive innovation and disruption, in a manner consistent with the organization's capacity to absorb change and transformation.
Video Transcript: Role of the Chief Digital Officer
The role of a Chief Digital Officer is relatively new. And because it’s new, there’s not yet a lot of similarity and the actual definition of what a CDO is, is constantly changing.
When I got the role of Chief Digital Officer of SAP about 18 months ago, there really weren’t very many of us. I found less than 30 around the world. These days, and I keep track regularly, there are at least 150 people that are CDOs around the world. And while their titles are the same, the charters of what they do are very different. In fact, there’s not really that much overlap from all the CDOs that I’ve talked to.
The thing that is similar is they spend a lot of their time on culture. I see it in my own job. I might spend as much as 50% of my time understanding cultural change. And CDOs that I talk to, Chief Digital Officers see the same as well.
Why is that? Well any transformation, particular digital transformation requires change and successful companies naturally resist change. After all, they’re successful and they wonder if they have to change or not.
There’s an interesting quote from the McKinsey report that says something like this. "A CDO is hired because they have a strong bias for action, and because they have a higher tolerance for risk than most executives. Because of that, they are likely to ruffle feathers, to bruise other executive’s egos and even sometimes to cause tempers to flare".
So a good CDO has to balance the need for change, to not alienate him or herself from the rest of the organization. It sets balance. Why some days, I think the acronym CDO doesn’t really stand for Chief Digital Officer, but it might, in fact, stand for Chief Disruption Officer.
Given that disruption, I wonder what the role will look like in the next five to seven years. It’s impossible to predict the future, but we may not need CDOs when we actually have transformed. It’s kind of like the fact that we don’t call it a mobile phone anymore, because everything is mobile. It’s just a phone. Maybe that’ll happen to CDOs as well.