According to leading consulting companies the chief digital officer (CDO) is an established role within the c-suite.
This might be true for regions like the U.S. and not so true for Europe and other more traditional economies. However, from a practical point of view, it is still unclear if the CDO will be around for the long haul.
The Rise and Fall of the CDO
Most results for searching “chief digital officer” on channels like the Harvard Business Review date back from 2013 to 2016. The earlier results have a generally positive attitude toward the CDO with headlines like “The Rise of the Chief Digital Officer” while the later ones paint a blacker picture with titles like “Say Goodbye to the Chief Digital Officer.”
An SAP survey of 450 global account directors who are responsible for managing SAP’s most strategic customers underpins that: In only 16% of the customer accounts the digital transformation is driven by their CDO, compared to 34% favoring the CEO. From the perspective of the SAP Center for Digital Leadership, the business leads will arise as additional top dog candidate in driving digital initiatives too.
So, the question stands: Is the chief digital officer a one-hit-wonder that is already on the descent? Or is the role of the CDO evolving into multiple other ones and therefore not as omni-present anymore?
A Day in the Life
A CDO is responsible for many to all topics digital within a company — at least this seems to be the public opinion. One of the most important agenda items is the identification of new business opportunities that have been created by the digital revolution. In other words, the CDO is helping a company turning digital opportunities into top-line growth.
Now, who is this character ideally? Stefanie Waehlert, ex-CDO of German-based tourism and travel goliath TUI, explains that a CDO must be a strong change manager, a strategist, must have a “do-er” mentality, and be a great storyteller. Not your typical “one-size-fits-all” kind of job. In theory, however, the role could be a real value-add to organizations trying to navigate the uncertain waters of the digital era.
A picture-book example of a chief digital officer is Atif Rafiq, a Yahoo and Amazon veteran. He joined the fast food giant McDonald’s as its first CDO back in 2013. He pushed toward digital and mobile initiatives to refocus on young consumer segments. McDonald’s ecosystem was extended toward delivery service startups like Postmates in hopes to close the gap to existing, established, and earlier founded fast food delivery chains.
Rafiq’s latest stroke of genius can be seen in many U.S. McDonald’s stores, which are equipped with self-ordering kiosks that enable the customer to co-create and build their own burgers compared to the rather traditional product and service offering.
Now that McDonald’s digital transformation is full speed ahead, its CDO has taken up a new challenge – not untypical for this breed of c-level. As of late last year, Rafiq aims to digitalize the car experience for Volvo.
The Sober Truth
Looking at the German, Austrian, and Swiss market, 53% of companies between 500 and 50,000 employees do not possess such an asset. And of the 47% that do, they do not primarily see the responsibility of driving the digital transformation with the CDO; only 26% see it that way compared to a vast majority seeing it belonging to the classic IT.
Only Time Will Tell
Looking toward the near future it is safe to say that any predictions in regards to the existence of the chief digital officer role are as sure as peeking into a crystal ball. Whether the future of digitalization is at the hands of the CDO is an unanswered question. A few years ago, the public opinion honored the CDO as the digital superman, but today the question is whether you need to establish a new company CDO or should better equip one of the other leaders with the related tasks.
As with almost everything in regards to the digital economy, the role of already established CDOs will re-invent itself faster than we can anticipate — in one form or the other.
About the SAP Center for Digital Leadership
As a leading digital pioneer, the SAP Center for Digital Leadership helps CxO customers and their organizations to navigate their digital transformation and lead with innovation. Based on SAP’s internal digital transformation learnings, the research agenda and meetings with more than 150 CxO customers per year, the center provides leaders with best practices for leading digital transformation.
The network and partner ecosystem represents today’s and tomorrow’s leaders in digital business. Partners like European Space Agency and Wacom trust the center and jointly create digital open ecosystems.
For more information, visit www.sap.com/digitalleadership.