The changing digital environment and the role of the chief digital officer

ILM logoDavid Dumeresque, of executive search firm Tyzack, on the rise of the chief digital officer.  The rise of the digital environment has brought to prominence all kinds of new challenges and opportunities, from the importance of creating a sustainable corporate digital footprint, to the role of social media in an organisation.  Yet within this evolving digital context it is the role of digital director that is becoming increasingly more important as part of the corporate fabric.

To date, responsibility for managing the corporate digital footprint still tends to be somewhat of an ad hoc issue with it often falling into the remit of the chief information officer. However, as corporate digital technology rapidly evolves to encompass marketing, sales and public relations channels alongside recruitment, procurement and R&D, a different set of competencies and business-related expertise is now required.

To ensure companies achieve a competitive advantage in the digital evolution, the concept of a digital director is gaining in importance as organisations begin to recognise the full impact of a robust, dynamic flow of data, knowledge and information across business interests and through social activity streams.

In the USA, the Chief Digital Officer is no longer seen as a novel job title, the position reporting directly to the CEO. However, with a very few exceptions outside the media world, most UK and European organisations are lagging behind embracing this change. In these organisations, digital is part of the purview of a variety of different people. As George Colony, chief executive officer of Forrester Research, fittingly wrote; it is vital for companies to “clearly define who owns digital.” Failure to do so is likely to give rise to the development of digital differences within an organisation.

To put this into perspective, in the pre-digital, “off-line” age, a lack of consistency and coherency in messaging was less important because it was quite possible that the different messages generated would not be seen by the same person. However, in the new, fully transparent digital age, communications can reach vast audiences in microseconds, so it is of paramount importance that there is an absolute consistency of message throughout the organisation. Who should be responsible for this? In the USA, it is the chief digital Officer. So why is it that digital directors are not seen to the same extent on this side of the Atlantic?

More importantly, in light of the advances that have been made in digital innovation over the last few years, what are the attributes for which chief executives should be looking for in their new chief digital officer, and where are these people to be found? To answer this question, you first have to take into account the changes in corporate dynamics that have occurred over the last decade. Whilst we talk about the need for control of the digital footprint, this is just one part of the equation.

One of the most interesting changes in information technology has been the way in which a 30-year hardware revolution has been superseded by the beginnings of, and an acceleration in, what may well be a 30 year software revolution. The business significance of this is the driver of the corporate agenda. In the past the IT department has been able to drive and control the agenda. Now that we are entering the digital revolution, it will be the users who will generate and determine what the software does for them. This is going to be even more the case given the way in which software is being developed, with it often being released in near beta format and then users being able to refine it to suit their needs.

With management increasingly allowing employees to use their own personal devices in the workplace to increase productivity and mobility – smartphones, laptops, tablets etc – the IT department is no longer in the driving seat. This is not to say that IT departments are becoming redundant. Corporate technology is not the same as personal technology. Maintaining a business wireless network, for example, requires a significantly greater skill level than maintaining a personal wireless network at home. Furthermore, with the increasing use of the Cloud, there are important issues to be addressed in relation to security, prevention of data loss, connectivity and geographical location of the hardware. What we will see in the IT department is a shift in personnel that reflects the changes in technology.

The importance of these developments is that the enterprise is becoming the driver of IT rather than IT being the driver of the enterprise. Effectively, as a business develops it will get the IT it deserves.

So if software and IT are becoming the servant of, and driven by, business, what will this mean for the development of the Digital agenda in corporate UK? One of the major opportunities is that people will be able to react much faster to changes in the marketplace than was the historically case. The analysis of big data means that traditional routes to market and feedback therefrom will become quasi instantaneous. The new chief digital officer will be the person who puts technology at the heart of the new business environment, improving the operation and providing coherent, fluent and cohesive thinking for the whole operation.

The CDO will also be the person who brings together not only e-commerce, in all its various guises, but also internal and external communications, marketing, fulfillment and a vast array of applications that at the moment don’t even exist. If your digital direction is driven by a “techie”, you’re going to miss a great deal of the creative influence which digital makes possible. Digital enables you to do something you could not do before. It is straightforward to use digital channels to do what you used to do in an analogue way. However, real sophistication and adoption means you change what you actually do.

So, to go back to the core attributes Chief Executives need to be looking for when appointing a chief digital officer. First, they need to hire a CDO who is not only a visionary and an evangelist, but also a highly practical businessperson. It is all too easy to go off on a flight of fancy in the digital environment, but the fastest way to disenfranchise digital is to spend vast amounts of money which then show very little return.

The CDO should be able not only to drive business but also to enhance the experience of anyone coming into contact, whether internally or externally, with the organisation. Championing a new “research/user generated content” which will have a significant impact on business as a whole is equally vital, and they will need not only to take responsibility for all e-commerce but also for the whole marketing, internal and external communications, including investor relations.

The business credentials of the CDO will ensure that he/she creates the right business case for digital and that increased revenue and profitability are always at the heart of any new digital innovation.

And where are these people likely to be found? They could be in a general management position with experience of marketing and a significant focus on the “end user”, be this a consumer or another business. Whilst they need to have a strong understanding of the technological world, but do not themselves need to be an IT specialist or come from a technological background. It is more likely that the new CDO will be found within the marketing or communications departments rather than within the IT Department.

As companies look to drive the digital agenda as a subset of their innovation strategies, the question which UK chief executives should be asking themselves is not whether they need a chief digital officer, but why they have not already appointed one.

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