The position of Chief Digital Officer (CDO) is still new or non-existent in many organizations. As a result, there is often uncertainty around the assignment of responsibilities. The reporting lines and the differentiation from more established functions such as the CIO or CTO also often prove difficult. In this article, we therefore take a closer look at the role of the CDO and give you tips for the ideal location in your company.

The ideal positioning of the CDO

First of all, the CDO is definitely part of top management. Even if they do not inevitably have to be part of the management team, their reporting line at least always leads directly to a managing director or board member. After all, they are the highest digital officer in the company.

Even if it doesn’t seem like it at first glance, the distinction from the CIO is clear and distinct upon closer inspection. This is because the CIO’s focus is on the operation and optimization of the current business model, while the CDO’s gaze is turned more toward the future. The CDO’s job is to look at future opportunities from the customer’s perspective. They also create measurement-driven strategies and innovative, hypothesis-based products. These must be able to be validated or falsified using readily available prototypes.

What does the CDO do and what do they not do

Here are some responsibilities that belong in the job description of every CDO:

  • The CDO is the designer of the digital business model of the future for your company
  • They lead the company into and through digital transformation
  • The CDO is responsible for developing and implementing the digital strategy
  • They provide agile tools and toolkits
  • The CDO orchestrates the development of a digital leadership team
  • They drive change, exemplifies digital culture and inspires others
  • The CDO enables entrepreneurial action in the teams
  • They remove obstacles from the way

But of course, there are some issues that are definitely not in the CDO’s role description:

  • They do not control all aspects of digital in the company
  • They do not make top-down decisions about projects and measures
  • They do not solely responsible for economic success
  • They do not know every project in minute detail
  • They do not distribute resources between projects

Rather, the CDO develops the digital strategy together with the company management. In doing so, they are responsible for the development of digital business models and acts as a point of contact for issues relating to digital transformation within the company.

What professional qualifications does the CDO need?

Your CDO is the interface between strategy, corporate development, marketing and technology in the company. In addition to a broad digital expertise and understanding of digital ecosystems, a good Chief Digital Officer has a deep understanding of technology and digital marketing. They also need a deep understanding of the digital craft – but at the same time can think conceptually and strategically. Overall, a CDO tends to work in a market-oriented way and ideally tries to take the customer perspective into account in every measure.

Of course, they do not lose sight of their own company in the process. Rather, they know how to take a holistic view of challenges and initiate developments in line with individual needs. Therefore, a successful CDO also needs competencies in the area of new and digital working methods.

The core tasks of the Chief Digital Officer

Develop and implement a successful digital strategy

Together with top management, the CDO develops and is responsible for the company’s digital strategy. This in turn reflects the changing consumer and information behavior of customers as well as the development of digital markets and technologies. The task of the digital strategy is to provide answers to the question of how the company can be successful in changing digital markets. In this context, the CDO is committed to its implementation and consistent further development.

Developing digital services and business models

Together with their team, the Chief Digital Officer develops new digital business models that open up new sales opportunities for the company and enable growth in different market environments. In doing so, they rethink existing strengths and processes on a digital level. The total decoupling of solution methods that are currently successful on the market can also help in the emergence of a completely new and thus disruptive approach.

Modern tools such as Design Thinking, Rapid and Virtual Prototyping or even Lean Startup as well as Google Sprints are used for development. New products are also developed agilely and with the involvement of real users on the customer side iteratively and with a short time to market.

Think and develop the digital team as a network

In order for the CDO to work effectively on implementing the digital strategy, they must build a powerful digital team. This team must also be successfully positioned within the organization. A modern digital team does not necessarily have to consist only of in-house employees – it represents a living network. This consists of in-house and external experts, who are put together depending on the current challenge. However, a fixed core team has proven to be a sensible framework in this context.

Leading the way digitally – and taking everyone with them

The digital transformation is turning all worlds of life and work upside down. In many people’s minds, digitalization primarily means streamlining, and for many employees it is associated with a high degree of uncertainty and the potential loss of their jobs. A CDO therefore has the task of explaining digitalization and its effects concretely in the context of their own company. How do you survive in increasingly digital markets? What strategy do you use to cope with digitalization and what concrete effects does this have on each individual employee? The CDO is therefore the figurehead and the face of the digital transformation in the company. They take the employees with them on the journey into the new digital world.

Putting the customer at the center

Finally, the Chief Digital Officer is also the highest-ranking representative of the customers in the company. With their consumer centricity and understanding of how users behave in digital environments, they ensure that the company can be experienced digitally by all relevant target groups. In doing so, the CDO views processes and value creation through the lens of a digital customer and, together with their team, develops digital services that consistently and continuously improve the customer experience.

Filling the CDO position from within the company’s own ranks

Digital transformation, by its very nature, always involves a great deal of change. That’s why a well-equipped executive not only brings in-depth digital expertise, but also impresses above all with strong communication skills and a great deal of empathy. Only in this way can natural resistance within the company be successfully overcome and all employees be committed to the new digital corporate culture.

When filling the position of CDO, companies can certainly draw on proven managers from their own ranks. However, they may then have to compensate for any existing professional deficits with suitable consultants or other experienced digital executives in the CDO’s team. After all, digital expertise and extensive knowledge of digital infrastructures and ecosystems are indispensable when building a successful digital team and designing and developing the digital strategy.

Personality traits of a successful CDO

Probably the most important personality traits of a CDO are willingness to change, empathy, open-mindedness and a high tolerance for frustration. They must also be particularly open to new concepts and technologies. Ideally, they combine this with the ability to classify and evaluate their individual relevance with regard to their own digital agenda. With their enthusiasm, they also convince relevant stakeholders in the company of the importance of their digital plans. But a good CDO is also empathetic enough to know that change can generate resistance and will take time. Finally, a good CDO is also willing to face conflicts. They are not immediately discouraged if, due to their broad scope, they clashe with the interests of one or the other established executive. They also know how to deal with setbacks and do not immediately throw in the towel in frustration when things get more difficult or uncomfortable.

If you are currently thinking about introducing the position of CDO in your company or are looking for competent support for your digital minister, then contact us. We make sure that the digitalization of your company proceeds as an evolution and still achieves revolutionary effects.

Tags:
#Digitalization #ITStrategy

About the author

Mathias Herrmann

CEO at ALLEHERZEN

Mathias Herrmann is an internet entrepreneur going back to the Internet’s early days with a deep interest in digital and future technologies. For over 20 years, he has been helping companies make the most of their data by forging innovative solutions – without forgetting the people behind the data.

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