Is 2014 the Year of the Chief Digital Officer?
For fast-growing companies, the Chief Digital Officer is emerging as the new “it” position. In fact, Gartner predicts that some 25 percent of businesses will have a CDO by 2015. Often, it’s an almost organic development: Some 70 percent of CMOs say they already have a chief marketing technologist who reports to them, and they admit they’d be lost without this kind of support.
It may seem obvious that the rise of this new power position is all about the explosion in technology, as well as the ever more essential role digital plays in customers’ lives. But organizational experts say growing tensions in the C-suite are also driving the trend, as CMOs and CIOs clash more frequently about questions of turf, innovation and accountability.
A recent survey from Accenture reports that CMOs don’t think much of their technology counterparts, with 38 percent of CMOs saying that IT deliberately keeps them out of the loop, and 35 percent grousing that marketing concerns aren’t a high enough priority. The disdain is mutual, with 31 percent of CIOs saying their marketing peers are ill-informed about tech, and 36 percent steamed because marketing routinely bypasses them for solutions, going to outside vendors and ad agencies without first checking for internal solutions.
In some ways, it could be argued, the CMO will increasingly have the upper hand in these tensions. According to Gartner, CMOs are predicted to outspend CIOs on tech by 2017.
Where CDOs Fit Now
But with customers expecting seamless (and satisfying) digital experiences across more platforms, both CMOs and CIOs are recognizing that they need help with skills and strategies that can bridge either the smallest Pinterest or Instagram campaign or the biggest investments in mobile commerce.
Unlike CIOs, CDOs aren’t concerned with equipment or tactics of how data is moved, but rather where that data is going and how it is used. And unlike CMOs, who still find themselves primarily immersed in brand and advertising, they can see every digital touch point including purchase, delivery and service. As a result, they have a much more complete picture of the customer’s experience.
For now, CDOs are seen as the people who can step in to fill gaps and deficiencies while simultaneously bridging conflicts between marketing and technology. That is, if you can find a good one. “Right now, there aren’t enough people with the right mix of technical knowledge, business experience and consumer-orientation in the market,” one client tells us. And while many digitally-proficient execs are getting called in interviews, “too many CDO candidates think this is about advertising and PR,” adds another. “What we need is a business leader with marketing emphasis.”
Digital’s Increasing Clout
Growth is the primary reason so many companies are putting “Hire a CDO” on the agenda, and the expectation is that the role will continue to evolve in the next few years. “We want someone to grow our business, strengthen our brands and reinvent marketing initiatives relative to the 360 consumer experience pre-purchase and post-purchase,” explains another client, the CMO of a global brand. “The CDO will drive the digital functional excellence from strategy to infrastructure and ensure that we have the right competence and capabilities to support and leverage the business from a digital perspective.”
Almost by definition, the CDO must be a bit of a free thinker, willing to experiment, fail and move on. They embrace data-based experimentation, adapt quickly and make iterative decisions. (Admittedly, that makes any company’s more stringent planners uncomfortable.) CDOs need to be able to move nimbly in all parts of the corporation, in terms of both departments and functions: Digital integration impacts employees, customers and the whole portfolio of products. That means they need to speak multiple business languages and simplify what can seem like insanely complicated technology. But above all, the job requires being persuasive, adaptable and visionary.
“The CDO is the CMO of the future,” says the Group CMO at a global financial institution. “Marketing will be digitally-led and classical second,” he says, “requiring agility, inclusiveness and the ability to be cross-functional.”
“Digital is becoming such an integral part of marketing,” adds the VP of marketing for an outdoor apparel and equipment company. “I could see a Chief Customer Experience Officer owning the entire brand/customer experience 5 years from now.”
Of course, that has plenty of CMOs a little envious. “The CDO role is a faster path to CEO,” another CMO tells us. In fact, one consultancy recently counted seven instances of a CDO moving into the CEO role — astounding, given that the job didn’t exist even a few years ago.
From Prophet’s standpoint, though, whether the CDO’s role evolves into CMO 2.0 or becomes the launchpad for chief executives is almost beside the point.
What really matters? Organizations must recognize that the job has less to do with dazzling digital endeavors (although those are nice) than with driving meaningful brand and revenue growth. In the end, customers don’t live exclusively in a digital or analog world — so why should marketers?
We happen to live during a time when we can see the technology transformation happening, everywhere. But we believe that marketers of the future will be “ambidextrous.”
In the end, the ultimate success of the Chief Digital Officer trend may mean the death of the Chief Digital Officer title.