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'Disrupt digital businesses before you get disrupted!'

Divina Paredes | April 10, 2015
Fostering a culture of digital DNA is important in order to succeed in the digital age, but who should lead this task? Ray Wang of Silicon Valley-based Constellation Research answers this question for enterprises building new businesses with disruptive technology.

"However between now and 2020, boards will see the largest change in requirements for their executive management team. Technology savvy and business acumen will no longer be isolated and separate requirements of future leaders."

The chief digital officer lineage

Lately, he says, there has been a proliferation of appointments to the chief digital officer role.

A question often arises as to what lineage these roles come from, he states. "Is it a CMO going digital or is it a CIO taking a business model digital, or is it a CTO becoming digital? Boards seeking to appoint a chief digital officer remain confused as to who or what role should be elevated. Which skill sets should be valued or emphasised?"

A closer examination by Constellation Research, reveals some patterns by industry, says Wang.

Keep in mind job descriptions do vary greatly by industry which is why in most cases role based research often fails to produce the cohorts that folks hope to achieve.

For chief digital officers, several splits have emerged, says Wang. In over 200 discussions with executive leaders on the CDO role, Wang says four common scenarios came up:

First scenario: The chief marketing officer is selected to become the CDO.: In consumer facing and brand driven enterprises, a tech savvy marketing chief often makes many of the enabling and supporting technology decisions. The focus on creating digital business models and new experiences is often a driver for selection of CMOs. Constellation sees this in consumer package goods, hospitality and gaming, home building, luxury and fashion brands, media, retail, and telecommunications.

Second scenario: The chief technology officer elevates into the CDO role: In many organisations where a chief technology officer has existed and an acceptance that the enterprise must move to a digital business model, the CTO will assume many of the requirements of a CDO. In addition, many organisations creating a CDO role often include the CTO components with a focus on business model transformation. This is often seen in academia, creative agencies, financial services, insurance, media and entertainment, public sector, and professional service organizations.

Third scenario: The chief operating officer takes on the digital business challenge: In the transformation of traditional businesses, COOs can take on the CDO position. Experience in business operations, business transformation, and general management position the COO to design, implement, and execute digital business models. Traditional enterprise facing organisations such as architecture, engineering, and construction; aerospace and defense, discrete manufacturing, industrial supply, oil and gas, and wholesale distribution often show COOs taking the key role.

Fourth scenario: The chief information officer is chosen as a CDO: Organisations seeking a progressive and tech savvy CDO, often choose very innovative CIOs. Commonly known as the Chief Innovation Officer persona of the CIO, these individuals help organisations navigate the world of start-ups and their innovation while making sure innovations meet enterprise class requirements. These organisations have built strong business and IT partnerships, says Wang. Industries that will follow this scenario include financial services, high tech, insurance, media and entertainment, mining and exploration, pharmaceutical, and transportation and warehousing.


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