Forty two per cent of chief digital officers told Egon Zehnder they believe their next role will be CEO, despite the fact the vast majority are the first in their company to hold their current title and three-quarters don’t feel their organization is prepared for digital transformation.
The global executive search firm recently released CDO Decoded: The First Wave Of Chief Digital Officers Speaks, which was based on a survey of large company executives late last year. Their ambitions for the top job was much higher than any other C-suite role. Twenty two per cent, for instance, said they could imagine themselves in the same role elsewhere and only 12 per cent saw themselves taking on a CMO role.
While 37 per cent of CDOs said they meet with their company’s board on a quarterly basis, the Egon Zehnder report’s authors suggested this was too infrequent, and encouraged firms to give digital leaders the time and freedom they need to build a strong team. As it standards, 54 per cent of CDOs said they spend more time “evangelizing” digital transformation than actually helping their companies executive on it.
“Digital progress means using key performance indicators and other metrics that may be very different from the traditional ways of measuring success. So CDOs must have the right to develop and use their own benchmarks, even in businesses that they are not in charge of,” the report said. “Says one CDO: “One of my biggest challenges is that I’m asking for digital KPIs in core businesses. If you only look at financial results, you don’t really know what’s going well or badly in a subscale business model.”
The Egon Zehnder research comes out not long after a much more cautionary study from Strategy&, a group within consulting firm PwC, which said CDO hiring has slowed from 160 positions at the 2,500 largest publicly traded companies in 2016 to 2014 two years ago and only 54 companies in 2018. Strategy& suggested the CDO role has already reached is peak or “high-water mark” and may be headed for extinction.
“Leaders at many companies now believe that putting a single person in charge of digital transformation may not be the best approach, because it is an intrinsic strategic priority across the whole business as agility becomes critical to survival. The CDO role no longer leads a discrete function,” the firm said, adding that demands of those who still employ CDOs are rapidly changing. “The CDO must have the appropriate technology background. One-third of the individuals who originally took up the CDO position have been replaced due to such changing expectations.”
Some of the Egon Zehnder report echoed these challenges. A full 80 percent of CDOs said evolving cultures was more or much more difficult than they had previously believed, and breaking down of silos was tougher than expected for 68 per cent. That said, some are finding ways to break through.
“At one global company, the CDO created a policy committee that assigns one person to each of the existing internal units (legal, compliance, finance, etc.) that can challenge norms and traditions,” the report noted. Culture is possibly the most important — and least considered — dynamic determining how much momentum a digital transformation effort can gain. It is critical to understand how open a company is to change before bringing in a digital transformation specialist. It’s also key to make sure that the CDO is supported in his or her attempts to break down silos.”
Despite the uphill battle many continue to face, CDOs don’t sound like they’re prepared to throw in the towel quite yet. A large majority, or 79 per cent, said they would take on a similar role in the future.
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