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Posted by Martin Gill on April 30, 2013
Chief Digital Officer (or CDO) is the latest in a long line of snazzy C-level titles to emerge over the last few years. At Forrester we’ve been watching this trend for a while now and have made a few comments, but I think it’s time to put a firm stake in the ground.
Don’t hire a Chief Digital Officer!
There. I said it.
Now, why might I say this when a number of high profile firms are in fact hiring CDOs? Well, to put things in perspective I want to look at a tale of three brands, all of which I’ve spoken about in the past:
- Amazon…born digital. You could say “dot com” firms have an unfair advantage, as digital is in their DNA. Firms like Amazon don’t have a CMO responsible for traditional media and a separate interactive marketing team running search and social. They don’t have an assortment and merchandizing team for the web and a separate one for wholesale or stores. They don’t think in terms of channels – they think holistically. This is true of any internet first firm (Asos, Net-a-Porter, Pixmania, Zalando and my old employer the now defunct Egg to name a few). They are born digital. So why would they need a chief digital officer?
- Burberry…achieved digital mastery. A benchmark of digital transformation, Burberry’s bold metamorphosis from outfitter of the ASBO generation to heritage British luxury brand is unprecedented. Burberry has woven digital experiences throughout its brand – in its stores, its catwalk shows, its celebrity associations and everything in between. It now boasts what I’d hold up as a best in class luxury eCommerce site. It hasn’t done any of this by accident, but neither did CEO Angela Ahrendts recruit a CDO to lead this charge. Burberry’s recipe was a digitally savvy CEO who could clearly articulate her vision that “every customer will have total access to the Burberry brand and culture, regardless of where, when and how they access the company.”
- Blockbuster…had digital thrust upon them. In a world going digital, Blockbuster clung to an unwieldy and expensive distribution model and failed to look for an escape plan. iTunes, Love Film, Netflix, Spotify and a host of other cable-delivered, on-demand services eroded Blockbusters’ value proposition, leaving it with a huge cost base of people, rent and inventory which was less accessible to its consumers that the streamed content from its digital rivals. Arguably Blockbuster made two mistakes. It failed to recognize the fact that the fulfillment model for its content was changing, but it also failed to embrace digital as a means of engaging its customers. Would a CDO have been able to change this? Possibly, and given that the trend for hiring CDOs has largely originated in the media industry, out of all three brands, Blockbuster would probably have benefited the most from such a person.
If you boil all of this back to the core, underlying issue, it’s that firms that weren’t born digital need to get digital pretty damn quick.
So this raises a key question – what competencies are needed to drive this transformation? To drive the scale and level of change we are talking about here, I believe that two key competencies are required:
- The ability to develop and articulate a digital vision.
- The ability to embed large scale cultural change into an organization.
Appointing a C-level individual to be responsible for driving a digital agenda could be disastrous for many traditional firms. It risks degenerating into a political minefield as other executives say “hey, digital is her job, nothing to do with me”. Rushing out and hiring a digital upstart could set many firms back, rather than propel them forward. Not many people are both digitally savvy enough to develop a bold vision for the future and really know how to drive a transformation on this scale. In many cases such a fundamental shift for a firm may be better led by the CEO with the support of the entire C-suite.
I am in no doubt that firms need to transform. But rather than pin the hopes on a single Che Guevara style revolutionary, CEOs in particular must recognize that this is an incredibly complex problem.
At Forrester we are at the inception of a major research project looking into exactly how firms can tackle this challenge. Our eBusiness forum in Chicago will focus on exactly this subject, and Nigel Fenwick is also looking at the impact of becoming digital on Business Technology teams. Stay tuned to our blogs, our research and look for our forthcoming events to see how this research evolves over the coming months.
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