The instant customer gratification offered by the Ubers of the world is shaking up the C-suite.
Most CEOs understand that they must digitally transform their businesses to create a more seamless, always-on, and data-driven customer experience. But just 21% have a strategy defined and established, and a mere 20% are leading the transformation themselves, according to the Economist Intelligence Unit.
That begs the question: Can the other members of the C-suite pull off this transformation, or does it require fresh leadership?
It’s important to keep in mind that there are two parts to this transformation:
- Improving the customer experience
- Making the digital changes required to realize those improvements
Tension Between Sales and Marketing
The traditional owners of the customer experience – sales and marketing – have a history of tension. Marketing focuses on strategy, analysis, and process, while sales emphasizes tactics, relationships, and results. Marketers complain that sales people ignore them and their work. On the other hand, sales people gripe that marketers’ strategies don’t apply in the real world.
When companies focused on price, quality, and product or service design to differentiate themselves, these simmering tensions mattered less. But as 89% of businesses shift their attention to making the customer experience the basis of competition, as cited by Gartner, those tensions now matter a lot more.
Can Chief Customer Officers Bridge the Gap?
Companies are responding by hiring a chief customer officer (CCO). In fact, the Chief Customer Officer Councilrevealed that roughly 35% of businesses with more than $1 billion in revenue have one.
The thinking behind this approach is the notion that neither the chief marketing officer nor the head of salesspend enough time focusing on customers or strategy. The CCO is there to bridge the strategic gap, heal the tension between the two groups, and become the leader of customer experience transformation.
Can CIOs Lead Digital Transformation?
Meanwhile, CIOs are seen as the best candidate to lead the digital side of the transformation. Yet, like sales, IT has its own history of conflict with marketing when it comes to digitizing the customer experience.
In a recent survey by Progress, 78% of companies say their IT and marketing teams could be better aligned to deliver digital transformation. At the same time, IT is also often viewed as slow to innovate and collaborate.
Unfortunately, even though many CIOs would like to be leading innovation, much of their time can be swallowed up by tactical distractions like keeping IT operations running. This is where the role of the chief digital officer (CDO) comes in: to drive digital change across the organization.
The ranks of CDOs are swelling rapidly, doubling every year from 2013 to 2015, according to the CDO Club. The club now estimates 2,000 CDOs are roaming corporate hallways and preaching change. Depending on the person and how the role is positioned, CDOs can either be the CIO’s best ally for driving innovation or just someone else joining the chorus of organizations complaining about IT.
Disrupters in Chief
The CCO and the CDO have remarkably similar roles. Each is sometimes given responsibility for both the customer and digital aspects of the transformation, depending on the company. More important, both are stepping into delicate political territory inside the C-suite.
To succeed, these two executives must be digitally savvy, bold, and eloquent voices for change. They must have the acumen to build solid relationships with many different areas of the organization affected by transformation, such as IT, R&D, supply chain, and procurement. All of these areas will need to cooperate and potentially make investments of their own to create an improved customer experience.
Yet there is one troubling similarity between the roles as well: They signal that the existing C-suite may not have the ability to get the job done.
Granted, transforming the digital customer experience is a big job. But does it require two new C-suite members? Or is it evidence that the CEO is not doing enough to lead the transformation and support the people already hired to do it?
For more perspectives on who leads digital transformation, see Data Will Underpin The CIO/CDO Relationship.
Christopher Koch is the Editorial Director of the SAP Center for Business Insight.