5 Barriers to Chief Digital Officer Success
In today’s climate of constant digital disruption, companies are turning to the new management role of Chief Digital Officer to push through rapid change and oversee digital transition.
The success or failure of this new role is very much dependent on organisational culture and how the role is structured.
1 - Lack of executive team commitment
Executives teams that have realised they are lagging behind their competitors and new entries are looking to the CDO role for making someone responsible for driving the digital agenda. However, the success of the role will be largely determined by solving the cultural issues that resulted in the position having to be created in the first place.
Potential CDO’s need to be mindful that the role may have been created to give the illusion of progress and there is not the appetite for risk or acceptance of change across the wider Executive team.
2 – A marketing-led strategy
Unfortunately, many companies focus on developing a lengthy digital strategy or a perfect website when the focus needs to be on integrating digital into all aspects of the supply chain. A marketing only approach means the business is removed from the culture change when they should all be actively encouraged to contribute to the “spirit of digital”.
Time must also be spent in unpacking complex business process issues so they can be improved and addressed before digitisation can occur. Skipping this discovery misses a great opportunity to introduce LEAN practices, possible new business and partnering opportunities. According to McKinsey most businesses will gain more from the cost reductions realised in the digitisation of the supply chain then the dollars they will generate through a new customer interface.
Utilising their knowledge, it is the responsibility of the CDO to identify and prioritise the functions that will deliver highest value. This will cut across reporting and customer analytics, system integration and automation, embedding digital skills /roles and the managing the arrival of new emerging industry technologies such as 3D printing The scope is wide and the CDO should have clear responsibilities and KPI’s to deliver. Most of all they need the empowerment to at times drag an organisation into the customer-centric digital mindset.
3 - A risk-averse culture
A successful digital strategy requires a bold vision and a healthy appetite for risk taking. A credible CDO will arrive with a solid understanding of trends, a good deal of market analysis, transformation experience. The high profile of this type of Change Agent means they carry the large risk of transformational change, gone are the early days of introducing basic digital capabilities and from the CDO emerges a tenacious visionary with a Specialist Generalist skill set across business and IT. Your CDO won’t know all the answers before they start, which won’t sit well with Execs that like guarantees. They will however know how to fail early and fast and be keeping an eye on the players inside and outside your industry that are getting it right.
4 – Inability to attract the right talent
The team is key and the shortage of digital skills will still cause a CDO to fail if they can’t find the right talent. The competition for digital skill sets in intense. Along with creative ways to recruit, organisations that hold good talent should be insuring they identify people within the organisation they can skill up to meet future demand. Some leaders are hesitant to release team members to participate in cross functional digital teams.
These development opportunities build engagement and widens the change support base, plus as all of a company’s employees are now digital consumers many will be keen to share their valuable ideas. Digital skills will permeate every role, holding back team members to concentrate on the “real work” won’t prevent the inevitable change.
5 - A silo mentality
A CDO needs to work closely with the CIO but as digital cuts across an organisation the role cannot succeed if it is required to operate in only one or two silos. The CDO needs to influence the entire executive team of the value delivered and that Digital is relevant all areas of the business. Your CDO needs to be empowered. The roles must have the authority to determine which initiatives will deliver the highest business value first and KPI’s reflect achievement across process, business models and customer experience.
The effectiveness of your Chief Digital Officer can be hampered by a number of factors. When considering creating a CDO role, Executive Teams need to be honest with themselves that they understand that their power base will shift while they adopt new ways of solving problems. The CDO is not the cause of that uncomfortable feeling but a messenger of what is happening outside the company walls. The CDO role is a temporary one, as its success negates its need. Removing the barriers to their success means everyone will get back to doing the “real work” again sooner. An efficient Chief Digital Officer working within an aligned Executive Team results in everyone winning and, who knows, possibly the next big thing.