There is a very high probability that you are viewing this article on your phone, tablet or other mobile device. Digital is now part of our daily life and some will say it has even made its way onto Maslow’s pyramid as a basic need! For financial services firms, that means that the customer and employee expectations are now driven by what is ‘normal’ digital experience outside the industry.
Talking to senior leadership at financial services firms, it is interesting to hear two completely opposite views on the role of a chief digital officer (CDO) and path forward on digital transformation. Whereas the board of one large organization is actively looking to hire an “outsider” for a CDO role, another large firm is looking to wean off the role because they believe digital is everyone’s responsibility. These contrasting viewpoints underscore just how divided the path to digital transformation is across the industry.
The digital transformation movement today in some ways reminds me of the Y2K phenomenon. Y2K led to a fear of being left behind and risk of the company facing a scenario where the business will shut down. Within enterprises, the fear of being left behind or disrupted is leading everyone to jump on the “go digital” bandwagon. Everything that is funded in an enterprise now is put under the “digital” category. Further, digital budgets of organizations are increasing and CEOs are publicly stating the importance of going digital.
“Simple can be harder than complex”- Steve Jobs.
Digital technology is easy to use but difficult to embed within traditional enterprises.
With Uber and Google touted as constant examples of what digital transformation can do for you, there are a number of “false positives” of progress that fail to provide return on investments. That’s driven by a siloed approach, which seems to provide pockets of transformation but fails to bring about a visible change in the organization. ‘Digital at the Core’ is a mindset, which is key to enterprise change.
Companies need a focal point for enterprise-wide transformation. That is where the role of the CDO is critical for success of these digital transformations. Today the CDO role is loosely used to define added responsibility shared by a chief marketing officer (CMO), chief information officer (CIO) and chief operating officer (COO). For organizations to be effective in their digital journey, the proper definition and identification of a transformer, or CDO, is key. The CDO is a critical transformation role and just like Optimus Prime requires effective leadership with ability to lead, collaborate, negotiate and execute!
A good CDO can be a game changer for an organization and in some ways can be more important than the CEO. Companies such as GE have appointed CDOs who are also CEOs of their digital enterprises, tasked with turning the well-established manufacturing company into a true digital business.
At the same time this role is a very different, transient role. CDOs coordinate, manage and transform everything about how a company will evolve as well as define the businesses within which the company will operate and client base to target. They are brought in to effect disruptive change in an organization, identifying gates and roadblocks to that change that need to be mitigated to implement a digital transformation. In effect, a successful CDO will ultimately reduce his or her role over time because his or her number one responsibility is to transform the enterprise to a high functioning digital organization.
CDO Objectives for Transformation
A successful CDO will lead the transformation across three C’s collectively with well-defined objectives: Company Initiatives, Customer Experience and Culture.
This is a non-exhaustive list of key objectives, which a CDO can help accomplish across each of the three key areas:
- Company Initiative:
- Define what digital is and how it supports the business strategy.
- Build buy-in across C-suite leadership across the organization.
- Executive sponsorship of an innovation ecosystem, which includes starting new businesses, investing in startups or innovation and acquisition strategy.
- Digital project portfolio management and governance.
- Customer Experience:
- Understand and build the customer experience journey and learn how digital impacts customer interaction across all channels.
- Develop and measure metrics for digital customer experience.
- Define workplace strategy to attract and retain the best talent.
- Create digital learning and retraining programs for employees and new hires.
“This is Not War,
This is Extinction”
Optimus Prime – Transformers Age of Extinction
Finding an Optimus Prime for your organization is not going to be easy and there aren’t any interplanetary job sites yet!
However, defining the role and empowering the individual will help you on the journey towards digital transformation.