A chief digital officer (CDO) is a leader who combines business acumen with digital expertise to help organizations drive digital transformation via an enterprise-wise digital vision and strategy.
At many companies, the chief digital officer is a customer-facing role that signals a commitment to a digital future. At others, the chief digital officer’s main responsibility is to strategically transform the company’s business. McKinsey & Co. have dubbed the CDO the “transformer in chief.”
The chief digital officer role
Chief digital officers oversee the adoption of digital technologies across an organization, transforming business strategy using technology and data, and evangelizing how people, processes, and technology can enable that digital vision.
The best chief digital officers can envision a company’s digital future and bring other executives and users on board with that vision. “Evangelism comes more and more under the digital role,” says Justin Cerilli, who leads the financial services technology and data and analytics practices at consultancy Russell Reynolds Associates. “It’s always about people, processes, and technology and how digital enables that. The people in these roles have to focus on process, on the business strategy, and on how to tell a story to get there.”
Chief digital officer responsibilities
Deloitte argues that digital leaders have 10 key responsibilities:
- Sense the opportunities of emerging digital technologies and digital-enabled business models
- Build and maintain external relationships with vendors, startups, analysts, and academia and be part of relevant ecosystems
- Act as a thought leader who articulates the digital future of the enterprise
- Educate the board on digital, building tech fluency from the top down
- Ensure the business strategy is a digital strategy
- Lead the development of the digital capabilities necessary for digital transformation throughout the enterprise
- Drive the move toward an insight-driven organization that leverages the power of data
- Build digital talent in the organization through a combination of developing current staff and attracting new talent
- Champion the process to identify, trial, evaluate, and scale or fail new digital technologies while ensuring they are relevant to the business
- Oversee the execution of digital initiatives
Chief digital officer salary
According to compensation analysis from Glassdoor, the median chief digital officer salary is $212,811 per year, with total pay, including bonuses and profit share, ranging from $96,000 to $491,000 annually.
Chief digital officer vs. CIO vs. CTO
The CDO position dates to at least 2011, when Russell Reynolds Associates began receiving calls looking for candidates. Since that time, the line that separates the CDO from the CIO from the CTO has been blurry at best.
According to Gartner, the CIO oversees the people, processes, and technologies within IT to ensure the IT function delivers outcomes that support the goals of the business. The CTO is responsible for managing the physical and personnel technology infrastructure and for managing client relations to ensure that service objective expectations are developed and met. Either role could take responsibility for digital transformation within the enterprise, especially if the individuals that fill them are fluent with the business as well as their technology responsibilities.
“My perspective is it’s all kind of merging together,” says Mike Giresi, chief digital officer of Molex, a manufacturer of electronic, electrical, and fiber optic connectivity systems. Giresi has also served as chief digital and technology officer of Aramark, CIO of Royal Caribbean Cruises, CIO of Tory Burch, and more.
Giresi, who is the first CDO at Molex, says he has worked hard to create a vision within the company of a CDO separate from the CIO. “The role of the CIO at Molex before was SAP; it was really around transaction processing,” Giresi says.
When Giresi spoke to Molex leadership about creating the CDO role, he was clear that he didn’t want to be the CIO. He wanted to lead digital transformation at the business by focusing on the operating model, everything to do with innovation, new product introduction (NPI), and fulfillment.
Where the chief digital officer fits in the C-suite
Some chief digital officers report to the CIO or to the CMO. But when chief digital officers fulfill a more visionary function, they should report to the CEO or perhaps the COO, experts say. In fact, Ragu Gurumurthy, chief digital officer and chief innovation officer at Deloitte, argues that in those situations other technology executives should report to the chief digital officer.
“When it comes to tech decisions for products, the chief digital officer should work with the CTO, and when it comes to internal processes, he or she should work with the CIO.” The chief digital officer should also work with the chief talent officer when it comes to hiring the skills needed for digital transformation, he says. “The chief digital officer becomes an orchestrator who sets the vision and goals.”
Or at least, the chief digital officer needs to be on a par with these other roles, he says. “You have to have a seat at the table to influence the CIO, CTO, and chief talent officer, to be a real peer. Otherwise, you won’t succeed.”
What to look for in a chief digital officer
Adriaan Bouten, CEO and founder of Digital Prism Advisors, says there are five things to look for in a CDO.
First, he says, CDOs must be great storytellers. Many CDOs come from a PR, marketing, or communications background for this reason. Bouten thinks CDOs should be technology outsiders who know where technology innovation fits best and can tell that story.
Next, CDOs should be innovators. They must straddle the line between technology and business. They must understand both product innovation and process innovation.
CDOs must also understand new trends and products in technology. They must be up to date on new digital trends and products and push their companies and fellow executives to stay aware of what’s current and what’s on the horizon.
CDOs must be able to execute on their digital strategies. They will potentially take responsibility for transforming your entire business model. Anyone who would take the keys to the kingdom in that way must have deep technical knowledge, excellent product management skills, and change management chops that help them cut through resistance to change.
CDOs must be influential. They need to get others to buy into their vision: other executives, the board, staff, vendors, even the competition and other industry leaders.