Successful chief digital officers make a positive impact on customers, employees and shareholders, and their success depends on several common attributes.
By Abhinav Agrawal
In 2010, the chief digital officer population was scarce, consisting of only a handful of people. By the end of 2016, the number of CDOs had grown to more than 2,000 executives in a variety of industries.
From our research, we know that successful CDOs continue to make a positive impact on customers, employees and shareholders. Quick service restaurants provide a wealth of examples.
Dennis Maloney, CDO at Domino's Pizza, launched Domino’s AnyWare program, which allows customers to order pizza via text, tweet, smart TV, car, smart watch or voice (i.e., Amazon Echo). Following the program launch, Domino’s online sales grew from 15 percent in 2010 (when Maloney became CDO) to 50 percent of total sales in 2015.
Adam Brotman, CDO at Starbucks, launched a similarly successful program in 2014, when he debuted mobile order & pay in Portland and gradually expanded the program across all U.S. stores. By the end of 2015, the new mobile platform handled more than 20 percent of U.S. store transactions and approximately nine million mobile payments.
Of course, not every CDO has been that effective. We found that success depends on several common attributes, as well as the initial expectations set for a CDO’s first year in the role.
Attributes of a Winning CDO
Literature on the CDO role is typically filled with origin- and orientation-based considerations, such as insider vs. outsider and functional vs. technologist. But A.T. Kearney research on successful CDOs finds that such considerations are not a predictor of future success.
Starbucks has had great success with insider CDO Adam Brotman, who has been with the company since 1998. CVS relied on an outsider from Staples to set up the successful CVS Health Digital Innovation Lab. Linda Boff, a functional marketing veteran, was instrumental in GE’s digital growth. Meanwhile, Renault relied on Yahoo! technologist Patrick Hoffstetter to launch its Digital Factory.
From our research and experience working with CDOs, we find that successful CDOs share four common attributes, regardless of industry or geography:
Smart creative: Eric Schmidt, former-CEO of Google and executive chairman of Alphabet, introduced the concept of “smart creatives” in his book How Google Works. He says these individuals are data-driven, hands-on, collaborative and results-focused.
Technologist: The successful CDO must be a technology evangelist who has led at least one digital transformation and understands that having hands-on experience and a future-in understanding of technology trends are critical. This person should have strong connections with other technologists in startups, universities and research centers to keep pace with rapidly changing technologies.
Business savvy: This CDO has proven business acumen, preferably with experience running a P&L center. Because digital initiatives typically integrate business functions (marketing, supply chain, retail) with information technology and e-commerce, a successful CDO will be well-versed in all of these areas.
Leader and change agent: This CDO has proven leadership skills and demonstrated experience, such as building a team of smart creatives who “get things done” or setting the digital vision of an organization. As a change agent, this CDO influences peers and inspires the entire organization to follow the digital vision.
Expectations for a Stellar CDO During the First Year
Digital advancements are capable of propelling brands and reinventing industries, and the changes they bring about can happen as rapidly as one year. For these reasons, it is vital to provide the support necessary for a CDO to immediately be empowered and able to drive digital innovation and transformation.
Here are 10 critical achievements you should expect from your CDO during the first year:
1. Digital Vision
Develops a long-term digital vision for the company that supports and aligns with the overall business strategy. Your company’s transformation relies on this vision, so there is some urgency to establish it as quickly as possible. By working closely with C-suite peers, the CDO will quickly define the initial vision and then move forward with it, course-correcting as needed over time.
2. Gap Assessment
Assesses the organization’s current capabilities and identifies gaps that could block the vision’s successful implementation. This assessment will highlight gaps relating to resources, abilities, processes, products and other areas, and use them to accelerate, hold or cancel in-flight and future initiatives.