Age of the CDO
The Art of Survival: Adapting to Change in the Digital Era
Fifty years ago, Leon Megginson, Professor of Management and Marketing at Louisiana State University wrote in the Southwestern Social Science Quarterly: “It is not the strongest of the species that survives, nor the most adaptable to change.” What Professor Megginson was referring to, in a business sense, was that those who survive are the ones who most accurately perceive their environment and successfully adapt to it.
Yet, from a business point of view, strength does play a vital part in survival, not so much physical but rather more cerebral. Take the evolution of business, particularly in relation to the impact of technology. Few will doubt that the revolution in computer hardware and architecture that began in the 1980s has significantly affected every aspect of business. Today, that revolution has run its course and it is now a software revolution this is beginning to completely change established paradigms.
For businesses to survive, corporate executives need not only fully grasp the impact this dramatically changing environment will have on their enterprise, but also act on these changes rapidly and without trepidation.
This software revolution is very quickly becoming the driver of the corporate agenda, particularly as we embrace the new digital era. Whereas in the past the IT department has driven and controlled that agenda (largely on the basis of computer hardware and client/server architecture), it is now the individuals who are determining what software they want and how they want it to work for them.
With the use of personal devices such as smartphones and tablets becoming widespread in the workplace, corporate executives must adapt quickly to this changing environment not only to survive but also to remain competitive.
The digital era is shaping modern society in many ways, but particularly through improved global communications and networking. It is also shaping the way in which organisations operate, with business moving towards becoming more information-driven and less labour and capital-driven. However, there remains a digital skills gap at senior management level that, if not properly addressed, will lead to competitive obsolescence.
Many new challenges and opportunities are emerging in the digital environment, including the importance of creating a sustainable corporate digital footprint and the role of social media in the organisation. Today, delivering an outstanding customer experience has become a strategic imperative.
The importance of social media was outlined in a recent article published in the MIT Sloan Management Review. In a research project involving 100 Chief Marketing Officers, more than 82 per cent believed social data has a measurable impact on brand awareness and almost 90 per cent claimed that social data has influenced their marketing decisions.
If companies are to capture the full value that social technologies provide, executives will need to travel a highway down which most have not ventured before. They must transform their organisational structures, processes and even their cultures to become “extended networked enterprises” that connect well internally and equally well externally with customers, stakeholders and others.
Furthermore, Chief Information Officers need to recognise that a different set of skills is now required within their departments. They must develop a more holistic view of the organisation’s requirements (rather than concentrating specifically on technology management) and apply creative technology solutions that will optimise critical competitive business processes. In other words, they must become strategic partners with marketing, sales and others, not just as a platform provider.
Whilst advances in technology will play a vital role for companies going forward, digital technology should not be confused with traditional “IT” technology. Even though a company’s digital business is technology intensive, it is seen by customer-facing departments such as sales, marketing, public relations and customer services as being rooted outside the back-office function of the IT department. Data, analytics and design, alongside technology, underpin and shape the entire customer experience, streamline operations and aid in the creation of new business models.
Recognising the potential impact of a robust, dynamic flow of data, knowledge and information across business interests and through social activity streams, a growing number of senior executives are pushing for a new role to be created; a position that has total responsibility for how the organisation transforms into the digital age.
The role that is now taking shape is that of a Chief Digital Officer.
Digital immaturity is extensive across virtually every industry, and the position of Chief Digital Officer (CDO) is being championed as an executive who has a full understanding and command not only of new technologies but also their applications and implications for the business as a whole. The competencies of a Chief Digital Officer are quite different to those of other executives. The CDO’s remit is customer-focused technologies, so being charged with delivering an outstanding customer experience (whether that customer be internal or external) requires someone who has the skills to integrate social, mobile and big data into all business functions throughout the organisation.
Transforming the company into the digital era requires the establishment of appropriately integrated data and processes. However, since many companies have traditionally operated in silos, each unit having its own systems and business processes, creating a common view of products and customers becomes very difficult. To address this, the CDO should have cross-department authority for digital initiatives and be responsible for realigning incentives to include metrics relevant to digital transformation.
Additionally, he/she should have total responsibility for the corporate digital footprint. It is the mission of the CDO to understand and connect with customers (both internal and external) and to take charge of crafting the experience those customers receive.
Unlike any previous transformative technology, today’s emerging digital technologies demand a different mindset and skill base. Executives who possess a deep understanding of how to adapt, lead and manage in the digital age will be able to provide strategic direction and guide the company through the necessary changes that consumers, employees, stakeholders and others demand.