CIOs feel threatened by the rise of Chief Digital Officers: Truth or myth?

The existing leadership structure in most organisations is ill equipped to drive the change required for dominating digital disruption. Consequently, the emergence of the chief digital officer (CDO) is essential for the new age of digital business, according to Constellation Research.

“Though the current debate often centres on whether the CIO or CMO will win out or whether chief digital officers may arise from an expanded role for the CIO, we see these arguments as shortsighted. The role will transcend both the CIO and CMO, as digital initiatives will require new skill sets,” feels the R Wang, principal analyst at Constellation Research.
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“Expect a CDO role to emerge that may include the personas of the chief innovation officer and the chief intelligence officer.”

As with any other massive transformation, the skill sets required for digital will be infused throughout the executive ranks and the organisation’s DNA. The pathway forward will involve a multidisciplinary approach. CDOs must be able to translate analog businesses into digital businesses; develop an authentic business brand; disrupt business models with digital technologies; work with five generations of digital proficiency; drive design-style transformation; manage a world of trust and radical transparency; and also invest in talented and creative people.

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“While we see many media, entertainment and technology organisations rapidly moving to develop a CDO role, other industries will eventually embrace a central champion who ensures the digital business principles and policies are in concert with an organisation’s overall strategy,” the report adds.

According to Constellation Research, other roles will be created. A ‘Chief Performance Officer’ will support the exponential increase in demand for systems put in place by the CDO. A Chief Media Channel Officer will deliver brand equity to an ever-increasing number of communication channels such as Web, mobile, apps, vehicle-to-vehicle, smart TVs and wearable, along with social media.

The rise of the chief digital officer is imminent. The mandate is to find and apply technology innovation that supports the business strategy or to craft new business models with emerging digital technologies. Constellation expects organisations that embrace this approach will differentiate themselves with higher margins, greater market share, increased brand relevancy and massive scale. CIOs seeking the next pathway should consider the requirements for success in digital business.

On the contrary, CIOs still seen as digital game changers

The term “digital,” in the last three years, has become a major driver associated with the progressive use of technology at the wider business strategy level. Gartner, which surveyed about 410 senior business leaders, claimed that a quarter of the survey respondents now have a CDO. “Adding in other VP and senior levels of digital leaders, and those respondents that plan to make an appointment this year and next, it appears that half of these companies will have a designated digital leader title by the end of 2015,” a latest Gartner report said.

However, CEOs see digital as a team game and the CIO still has the highest visibility. When Gartner asked CEOs who they would allocate relative responsibility for leading digital innovation and change over the next two years, the CIO came out on top and that’s particularly true for those who allocate more than a quarter of responsibility to a single person. However, many other roles are heavily involved. So CEOs clearly see digital as very much a collective operating committee endeavour.

“Growth is very clearly king in this year’s business priorities with 33 percent of respondents naming growth as their top priority,” says Mark Raskino, vice president and Gartner Fellow. “In 2014 growth almost equals the sum of the next three issues on the list of top strategic business priorities.

The golden rule for CIOs should be to work together with CEOs to match the use of modern technologies to the specific kind of growth that the business is trying to win - and continue to make a mark in the enterprise.