Who is the chief digital officer (CDO)? It is a question that is difficult to answer as the digital agenda shifts and expands.
What is more apparent is that the wrong person at the digital helm can be catastrophic. It can also hobble a company's advance and increase the risks of becoming marginalized.
Sachin Chitturu, partner at McKinsey, felt that digital transformation fails because of a single reason. That is it began with the wrong reasons.
“Many companies see digital transformation as a shiny new thing. They did not understand that it is fundamentally the transformation of their business. By the time, they realize this, it is already too late,” said Chitturu at the recent CDO Summit Asia 2019.
During his opening keynote With Great (Digital) Power Comes Great (Business) Responsibility, Chitturu noted that CEOs valued digital transformation. In surveys, McKinsey found “90% of CEOs seeing digital as important."
“But when you look at the health of digital transformation, only 15% say that it was impactful,” said Chitturu.
So, which industries are doing well in digital transformation? Chitturu called out three: high-tech, banking and retail.
Among the three, Chitturu saw banking the most mature. Besides a clear agenda, driven by competition and customer demand, there is one other factor. It is the existence of a CDO.
“In fact, they were the first to create chief digital officer (CDO) roles,” Chitturu said.
Banks’ success in driving their digital agenda is helping them to become competitive. Meanwhile, strong board support is giving CDOs the confidence to drive their digital mandates.
Together, these factors are already allowing many banks to enter other industries.
For example, telecommunications players used to have “equal claim” to mobile financial services.
“You ask anyone about mobile financial services, and you will often find them naming banks,” said Chitturu.
CDOs may have a big task. But they cannot have big personalities, warned Chitturu.
“There is no space for individual heavy hitters or rock stars. Because a single person cannot do the entire job. Instead, they need to be team players.”
Companies that were successful in digital transformation have their CDOs operating the C-suite "like a scrum." “Now, that’s a big shift in mindset for many,” he said.
Richa Goswami, chief digital officer, APAC, Johnson & Johnson agreed.
In her presentation The Ever-evolving remit of the CDO? noted that CDOs need to be both “the Iron Man and Captain America.”
“More importantly, you need someone with vision, organization, skills and an organizational plan,” said Goswami.
She also prized humility “because you need to learn from the best of the best.”
One reason why CDOs need to be part of the board is that the digital strategy needs to be part of the corporate one.
While this makes perfect business sense, McKinsey found the opposite in their studies. It saw 80% of companies with digital strategies that are separate from their corporate strategies.
“We think it is the wrong way to go about it. Digital needs to part of the core strategy. Else, you are only doing experiments,” he said.
It is the reason why Goswami saw her job as a transformation agent.
“CDOs are essentially transformers. Our job is to take an organization that went a certain way to go through a new normal where every day there is disruption. It is no small feat,” she said.
Goswami also felt that an essential task of a CDO is building the right culture.
“Culture eats strategy for breakfast,” she said. To create the right culture, she set up a “culture squad.”
Start with a CDO
So, who is the CDO? It is someone who possesses all the above qualities and more.
But, as Chitturu pointed out, it is vital to have such a role in the company.
“It does not need to be a formal role. What you need is a digital evangelist in the C-Suite -- a role that a lot of CMOs take on in this region.”
He also saw the creation of the CDO role as the first step toward digital transformation.