BLOG

The chief digital officer part 3 – how to organize the digital shift

Joachim Heinz

0

Hi and welcome to part number three of the blog series on the chief digital officer.

The first part lays groundwork and explains the urgent need for this role inside business in today’s digital world.

The second part digs deep into the tasks and the responsibility of the CDO. Part two also covers the necessary soft-skills which a CDO needs to bring with.

strategy plan on drawboardNow let´s work on the third part which deals with the correct setup of the CDO and the connected organization. Why is that so important? Just place this guy somewhere near top-management and see, things will move. No, they will not. As we have seen in part one, the digital shift happens to the business model. As this the very core of the company, we need to carefully setup the CDO to reflect this responsibility.

Beginning at the top

First question we want to find an answer: Which alternatives exist to place the CDO as a part of the top-management? There are mainly four alternatives:

Not in top-management, but directly connected to CEO in first line below him

  1. Into an existing line-function such as corporate strategy. This only works, in case the CEO is running the role of the CDO too but needs lot´s of support. Again, this huge shift cannot be delegated!
  2. As a newly created CEO-office beside existing line-functions. Same issue than first alternative. In this case it is absolutely necessary to check if this solution is a good one related to the existing company culture. If there is the tendency of “not invented here”, it is very important to grow a co-creation atmosphere.

Both solutions are not the best idea looking on the additional work-load of the CEO.

Not in top-management, not directly to CEO but connected to another C-role (well not the CDO ;-))

  1. This is for short-term a solution, but not for mid- or longterm. The organization will doubt the necessity of change, as the most important role is missing – the CEO.

Settled inside the top-management

  1. CDO is a member of the board, same level than all other members and fully responsible with a clear line between the CDO and CEO. It seems that this version is a powerful design. But it also only works in case there is a clear understanding of collaboration with especially CIO and CMO.

According to Dion Hinchcliffe, one of the thought leaders in the CDO area, showed on Twitter the tremendous growth rate. of CDOs. Run a simple test: search for “chief digital officer” in one of those big networks such as Glassdoor or Linkedin, more and more CDO vacancies are available. They all own a very core: Developing business and digital strategy along market and customer needs.

Now as we have the CDO on board, what’s next? Lonely firefighter or fully connected strategist? Standard change-programme or fresh ideas, which recognize the more and more connected workforce? The question is about the setup of the transformation organization. Here comes the challenge: A digital transformation program runs in many levels, in most functions, with effects on culture – and everything in the same time. It cannot be “planned” in a traditional manner.

How to Run an Agile Digital Transformation Programme” by Lee Bryant outlines a new approach beyond standard change programs. And by doing so, a possible door towards the “modus operandi” of the CDO is in sight. I think this is enough material for a continuation of this series towards a fourth blog post: “The chief digital officer – driving the connected transformation”. See you soon!

The chief digital officer part 2 – the tasks, the personality, the skills

Joachim Heinz

0

Hi and welcome to chapter 2 of the CDO blog post series.

In the first blog post of a series, I outlined the necessity of the chief digital officer. Digital technology is both – it can be a huge chance if you have the understanding of its power and possibilities. And it will be a threat to your company if you fail to run the transformation.  This huge responsibility needs to be taken by a chief digital officer. In this blog post, I dig into the main tasks of his work and the key aspects of his personality. I also outline the necessary leadership capabilities of such a personality. Let´s go discovering the #CDO 😉

First, I´d like to start with the foundation. As the headline is “digization” of the business model, we build the CDO around this.

  1. Development of the digital vision and strategy aligned to current and future business models as well as the existing business vision and strategy.
  2. Definition of underlying principles of the digital transformation (such as “user experience” for example)
  3. Setup of a consistent approach of the digital transformation (e.g. learning-cycles, prototyping etc.)
  4. Creation and further development of the digital roadmap (may also contain “products”)
  5. Creation of internal organization of the transformation as well as an internal core-team dedicated to this whole stuff.

There are the following premises:

  • Your CEO fully understood the need for change and is able/willing to go new ways.
  • The entire C-suite is supporting the upcoming transformation and understands, that this will be a wild ride for 5-10 years.

Now let´s dive a little bit deeper into every point and understand the core tasks and challenges in there.

 

Aerial view of Manhattan from a BinocularDevelopment of the digital vision and strategy

A vision is a kind of target-picture that is far away in the future. It is challenging, motivating and the source of all activity of the company. If the vision is developed together with the staff, an awesome commitment is the price. The CDO must be able understand the business context of both todays and tomorrows business in order to work-out a vision for the digital era.

After formulating the vision, the next step is to think of the next 2 to 4 years in the perspective of strategic maneuvers. What do the stakeholders say? What are future trends? What is the perspective of markets and customers? Strategy does not mean a long-term plan. Today in the fast changing world a strategy is giving a true north for the next 2 to 4 years.

Definition of underlying principles

Principles only work when they are applied without exception – if done so, they are a core asset in the digital transformation. If selected well and applied correctly, they can even support the evolution of the company culture.

Setup of a consistent approach

This is indeed a difficult task, because there is no blueprint. How to run a digital transformation of a company depends from size, maturity, culture, business and so on. The transformation is highly complex because there is no “single screw” to turn. Every screw you turn affects other screws. You work in a system and that is why a transformation cannot be piloted or tested. Do it or leave it.

Creation of the digital roadmap

So now you have a vision, a strategy, key principles and an idea of an approach. Next big task: Define your roadmap. What will be your first activity? Which one next? Are they interlinked? Where is the customer? The roadmap is basis for the financial planning as well as all further communication activities.

Creation of internal organization

The digital era does not work with stand-alone heroes. As every business is a network, a CDO needs to be able to build up networks inside and outside the company. For this (and all the other work that needs to be done) he runs his own team of experts. This team should contain 50% of externally hired people.

Looking on all those tasks, they are not small ones. Well there is a reason for the “C” in the CDO. How to setup the CDO I will outline in my third blog post of this series.

Now let´s have a look on the personality. These are the must-haves of any CDO:

Visionary thinking

Digital technology develops very fast. The CDO needs to be able to envision the possible developments and abstract those towards business impact. The CDO also needs to be aware of the development of societies and influence on workforce. He needs to be able to detect weak signals.

Portrait of young businessman with toy paper wings. Success, creative and startup concept. Copy space for your text

Leading in change

Leading in change

A CDO is also a kind of digital “evangelist” able to drive the change by motivating and encouraging for new structures, practises, processes and technologies. A quite short sentence for a huge task. There are not many things more challenging in business than driving a change.

 

Managing skills

A CDO also has to run very practical managing work. Checking budgets, planning the workforce, giving structure and enforcing key rules are some important tasks of the CDO.

Systemic thinking

A business is a complex system. It is not necessary to understand every detail. But it is a prerequisite that the CDO is able for systemic thinking and understands the interlinking of technology, core processes, culture, strategy and assets as well as stakeholders and customers.

Broad knowledge and understanding

A business transformation driven by digital technology and surrounding impacts. This is the core. That means that the CDO needs to have a deep understanding of digital technology, business structures, future developments and trends, both leading and managing skills. On top of this, the CDO also experienced new working models such as iterative working (e.g. scrum). He is able to lead in change and make large networks follow his vision and strategy. In other words, the CDO needs a very broad groundwork in knowledge and understanding.

Summary: The CDO is a personality being able for multi-focal work and strong abilities to work with networks. The CDO needs a broad knowledge base as well as strategic skills. The perfect candidate knows both worlds: The traditional management setup as well as “start-up-like”-work and is able to build bridges (and to be honest, this might be a rare species today!).

Looking on all those requirements it is clear that there is a strong interplay with the CEO and the other C-roles in the board of management. There are several ideas how to setup the #CDO. In my next blog post in the CDO-series, I will compare the most important scenarios and do a strength and weakness analysis. So, hopefully see you soon again in chapter 3, the “how” to setup a CDO in a company.

 

The chief digital officer part 1 – the why, the what, the how

Joachim Heinz

0

As the world becomes a digitally connected place, the impact on business is huge. As businesses are not partly affected but as a whole, there needs to be a clear responsibility for the necessary transformatinonal efforts. This blog post outlines, why businesses are in need for a chief digital officer. In a following series of blog posts, I will explain his tasks and responsibilities and finally give and idea how to organize this role inside companies.

In the first blog post, I will focus on the need for such a role in the C-suite.

Understanding digital impact on business

world netAbout 200 years ago, people and busineses laughed about the first steam machines. But step by step it became clear that steam machines can do some work cheaper and more efficient. It was the dawn of a new era that transformed business as well as society – it was the begin of the industrial revolution. Today nobody will neglect this very clear observation.

Today, we can see many new steam machines. A global internet connecting people, information and hardware. Smartphones with insane technology. Mobile networks with data speed beyond land line connections. CPUs double their speed every two years. These are not one steam machine. Today, a dozen of transform-class technologies are on the way to shape our landscape of life and business. And all those technologies come simultaneously.

Those technologies already transform societies and markets and well – customers. 10 years ago customers had no chance to make enough pressure on business regarding product wishes – today customers can bypass businesses by crowdfunding their own idea and select for a business partner. Markets are being reshaped in no time – airbnb did not invent to rent a bed, but they reinvented the way how to rent a bed. Uber did not invent the taxi-service. They reshape how this business is done powered by digital technology.

Those technologies will grow into every part of our business life because there is a simple but true paradigm: “everything that can be digitized will be digitized“. And that is even true for the core of every company. Digitalization even affects your business model.  Beyond that, with digital technologies it is even possible to create new business models. Not convinced yet? Then investigate on Amazon kindle, Apple itunes, Paypal and so on. Even the producing industry is not in a save place. Todays megatrend in the industry is called industry 4.0 which deals with connectivity between machines, workpieces and humans.

Beyond all business-model views, your workforce is currently being transformed, too. Just in that second. Or do you think that their usage of Whatsapp, Weibo, Wechat, Facebook and many other digital tools does not affect them? Sure, it does affect them very much. To make the picture complete, younger generations who now enter business seeking for a new sense in their work. Just giving them a target and say “go!” make them only leave your company.

So here is the summary of why your company needs a chief digital officer: Digitalization will come to your business model. And if not you do that, another company will do. So here is the big task: You have to transform your company to meet the needs of digitally enhanced or even purely digital business models. Therefore you need a strategy first. But don´t forget a very valid sentence from Mr. Drucker: “Culture eats strategy for breakfast”.

Image converted using ifftoany

Building strategy, enhance the business model, develop the company culture – seems to be a CEO-job, doesn´t it? OK but there is a big challenge. As the transformation ahead is based on digital technology, you need to have a deep understanding of technology and the intersection with humans, culture and strategy. And this is not a part-time job. This is why I call the Chief Digital Officer into the C-suite.

In my next blog-post in this series, I will dive into the “what” of the Chief Digital Officer and give a frame to his responsibilities and tasks.