Leadership Matters

Perspectives on the key issues impacting senior leaders and their organizations
November 9, 2016

Will the Chief Digital Officer Become Obsolete or Your Next CEO?

Some call it a passing fad. Others deem it critical to their organisation’s evolution. The role of the chief digital officer (CDO) is a major topic of discussion about leadership at organisations around the world and across industries, and people tend to fall into two general camps. One expects the role to proliferate and rise in prominence. Gartner, for example, predicts that 90% of large companies will have a CDO by 2019. The other side, conveyed in Information Age, anticipates the role will be short-lived as digital simply becomes everyone’s job and marketing leaders take greater ownership of the overall customer experience.

At the core, the CDO is a change agent — a C-level executive charged with helping the organisation transform in order to not merely keep pace but to maximise the digital opportunity. [We talked to some award-winning CDOs on this very topic.]

But what happens when that change is complete?

Once senior leadership understands the digital skills the business needs, that helicopter view may no longer be necessary. In more digitally mature industries, we’re seeing demand for what were initially broad, digital leadership roles shifting to more specialised posts. For example, many media companies are now veering away from holistic digital executives to leaders with niche expertise in programmatic buying and selling, engineering and “over-the-top” content (i.e., delivered via the internet). Interestingly, we’ve witnessed an inverse shift in retail: With the pervasiveness of online shopping, heads of e-commerce have given way to more expansive head of multichannel roles.  

With these changing dynamics, what’s next for the CDO? The new chapter will likely be written in sectors that are in earlier stages of digital disruption.

Industrial companies have begun to seek CDOs who can build a digital strategy largely from scratch. Historically, pharmaceutical companies’ primary relationships were with large intermediaries and buying groups, such as physicians. With easy access to health information and online tools for self-diagnosis, traditional barriers between pharma companies and consumers are quickly fading — requiring leaders who can help forge new relationships via digital channels. This disintermediation is happening everywhere and has implications for the definition of leadership roles; in some cases, the roles of the CMO and CDO will merge.

In the rapidly evolving world of digital, organisations may need to rethink what success looks like for this type of role.

The mark of success for CDOs may be that they have worked themselves out of a job in three years; they have helped the organisation become immersed in digital, at which point, their main objective has been achieved and they may shift to more specialised roles.

We also may see CDOs becoming CEOs over time. The attributes of successful CDOs — the ability to determine which digital advancements align with the strategy, the ability to build credibility while leading cross-functional teams and the ability to unite an organization under the banner of a digital strategy — are ones that would serve a CEO well. In a climate of rapid digital innovation, the CDO’s story is likely just beginning.

Grant Duncan leads Spencer Stuart’s Digital Practice in Europe, the Middle East and Africa and the Technology, Media & Telecommunications Practice in the UK. He can be reached at gduncan@spencerstuart.com.