How are the responsibilities for digital divided up across the organization? If there is to be one leader of digital, it would be best that it be someone who has both internal, operational experience and insights, as well as profound customer touchpoints. This chapter covers the reasons why, and highlights the ideal backgrounds of digital leaders.
- Who should lead the digital agenda and strategy for the company? It's an interesting question, as many leading thinkers believe that this is a transitory period where this is for example, digital marketing and traditional marketing, digital sales and traditional sales, or digital operations and traditional operations. As digital business and business become one in the same to a greater degree, will companies even need a single leader of the function? At a recent gathering of 150 Fortune 500 chief information officers, I asked the audience, how many of their companies had a chief digital officer? Amazingly, only about five raised their hands.
Through an instant poll, I was able to determine that a little more than 50% of the chief information officers either owned the digital agenda or co-led that agenda. This may seem surprising, but let's dig into how companies should think about the person who leads the function. According to a polling my firm has done, the CIO has surpassed the chief marketing officer as the executive most responsible for leading digital transformation. Many CEOs and leadership teams of companies think of the true digital opportunity as one that is revenue-centric.
That is to say, the biggest opportunity is to sell existing or new products and services through digital channels, like the company's website or mobile application. If this is the case, it may seem logical to have a former marketing or sales leader as two of the customer-centric divisions of the company lead the function. But what about the operational aspects that are necessary to make that happen? In order to advance digital capabilities it requires organization and change management, which is the model and management practices in place to facilitate the speed and flexibility required in digital growth and development.
Digital processes, which are the means through which digital capabilities that the customer interacts with are created. Functional processes that drive and support day-to-day operations of the business and the generation of revenue. Architecture and tools which includes the governance infastructure and applications responsible for the collection and maintenance of data used in digital initiatives. Leaders of customer-centric functions may not have experience or expertise in the areas necessary to influence each of these. Likewise, there are many technical changes necessary in order to transform a company to be digital ready.
The chief information officer or chief technology officer may seem like the ideal leader to lead the charge. Unfortunately, many CIOs or CTOs do not have customer-facing responsibilities. This puts them at a disadvantage in suggesting and leading opportunities that should ultimately benefit the people responsible for the revenue of the company, the customers. If however, they're executives who have internal and external responsibilities, these are the ideal candidates to lead the charge. This could include chief information officers or chief technology officers who naturally have an internal operational purview, so long as they have customer-centric responsibilities.
It could be sales or marketing leaders who have had operational roles as they progress through the corporate hierarchy. It could also be former management consultants, the senior most of whom have sales responsibilities as well as delivery responsibilities and often can tie the internal and external perspectives together. Lastly, what about the title? If the leader who takes ownership of digital transformation is an existing executive, it may not be necessary to give them the title of chief digital officer. Now I should note that some companies do find it helpful to add this title to the responsibilities to highlight the importance of the work to come and the extent to which this will represent new sets of activities, it's not a hard and fast rule.
Companies like United Technologies, Bloomin' Brands, and JetBlue Airways have CIOs who have a second title of chief digital officer. As I mentioned, once the first waves of transformation are effectively introduced, the title may not be necessary, but having someone ultimately responsible for the change in the important early stages can help ensure that the change is managed more effectively. The digital revolution is upon us and while it may seem as if the pace of change is fast now, it will only get faster. But remember, that the speed translates into great opportunities and there's no greater motivator than that.