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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!

Business view: From weak social networks to real social system power

Joachim Heinz

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A system is a great thing. I love to think in systems. Systems can be small – for example a coffee-machine. You put water and coffee-powder in. Some seconds later fresh coffee comes out. Systems can be huge – the weather is a system too. Well there are many more inputs than a coffee machine needs, but there is also an output – rain, sunshine, fog, storm.

Companies are a system too. There is a lot of input (customer demands, markets, raw material etc). Then the company is adding value (hopefully…). The output of the company is a great product or service that customers can buy. If the customer does not buy the stuff, the system dies and will be replaced by another system. Simple but true this theory is.

Let´s stay with the business perspective. There is a big challenge upcoming for every business: The world changes faster than ever, driven by global networks and global communication. The result is a business environment that is something like a brain. So companies now need to connect with that brain. That is very difficult if your company is set up as hierarchical machine. Or even worse: If your company is set up as a command-and-control like “stone”. This structure cannot be connected with a brain – neither on input- nor on output-side.

Männer im ZahnradSo the question is – how can you transform your machine-like setup of your company into a vibrating brain-like network, which is able to react very fast to “input” from the fast-changing markets and build output, that makes your connected customers cheer out loud?

 
So your company is a machine, and this is as said a system. Your company is made of your associates, managers, processes, guidelines, organization and technology. Maybe there are some more parts of the machine, but these are the main building blocks. And the oil for this machine is communication – restrictive top-down, with the function of oil where needed on the machine and hidden in millions of emails and documents on restricted and thus useless (internal!) shares.

 
In order to change and improve things, for the last 10 years more and more companies invested a lot of money in social networks to improve their internal collaboration. Companies tried to achieve more transparency and very often failed. They asked for internal crowd sourcing, but internal structures blocked good ideas. Today it seems that technology won´t help alone.

 

Business TechnologyLet´s have a again a look at the system. IT technology is only one out of six building blocks of your company. You need to transform the other five building blocks too; otherwise the power of the social network just has no chance to raise. As we talk of the six building blocks associates, managers, guidelines, organization, processes and IT – you now understand, why it is so hard and challenging to become a real social, connected company. Because you need to address all the other parts, too. We talk of an operation on the open heart.

 
So what are the advantages in case you achieve to transform your company into a modern, networked and social organization? The biggest advantage: Your company will survive. Don´t laugh at me – heavyweights like Kodak and Nokia did not transform and now they are gone – in no time!

 
But there are much more advantages of becoming a connected company: Associates with responsibilities will show a greater engagement. Transparent communication enables transparent knowledge access. Self-organizing teams speed up collaboration. And guidelines which foster trust shorten decision times. Isn´t that a terrific place to work at? Yes! So start today to build your social system and release the power of networks in your company.