Who is formulating your company’s digital strategy?

In terms of Chief Digital Officers, there is a huge talent gap in the industry

As markets are undergoing a digital redefinition, organisations are shifting gears to drive smoothly through the digital transformation and in the process, bringing a slew of new positions into the C-suite.

The world’s largest companies are allotting C-level positions to tech-specific roles, specifically that of the Chief Digital Officer (CDO).

A CDO is expected to lead digital business strategy, online services across web, mobile and social platforms and have an oversight of enterprise content, applications and infrastructure and oversee operations in the rapidly-changing digital channels. Besides these, a CDO has to also integrate modern-age technologies such as Augmented Reality, Artificial Intelligence and Big Data into business operations to enhance efficiency.

Interestingly, our research shows that 40 % of the time, the Digital Strategy is set by the Chief Executive Officer (CEO), and not a functional specialist. The General Managers and Marketing Heads are bigger advocates of the Digital Strategy than the IT or Digital Head.

Digital leadership gap

A CDO with the afore-mentioned functions should be able to lead Digital Strategy; but unfortunately, there is a significant talent gap of CDOs in the industry.

There is an increasing trend of Chief Marketing Officers (CMOs) and sales leaders, who are digitally-savvy, and Chief Information Officers (CIOs), who have operations experience, transiting into the CDO’s role. However, only a few of them have worked across functions or had extensive business experience, and they will have to demonstrate an ability to manage changes and meaningful transformation to be successful in this role.

They have to overcome the typical CMO and CIO functional mind-sets and expand their influence. They will have to operate at the intersection of strategy and technology and often assume larger responsibilities, including profit-and-loss accountability. Around 30% to 40% of the CDOs now come with primary expertise in marketing, sales or customer service.

To enable seamless digital transformation, CDOs have to strengthen their ability to realign the organisation (agile structure, shared metrics, clear delineation of governance and decision rights) to garner vital support from key functions, including the Board of Directors and the C-suites.

They have to also think about how to leverage digital technology internally to lower costs, improve quality and engage employees. The CDO needs to influence and galvanise people into action, within the organisation. Every function and department in the organisation should be touched by the impact of his work.

The world continues to spin on a data-tilted axis, and making the move from conventional business models to tech-driven ones is more important than ever.

Leadership titles such as CDOs did not exist until this decade, but today, amidst digital innovation, they signify an agency of change. Perhaps, CDOs will lead the way to a future where Digital CEOs will rise on the horizon.

( Puneet Kalra is Managing Director at Russell Reynolds Associates.)