A company is ready to hire a Chief Digital Officer when they have “about $2 billion in annual revenues.” At least that’s the threshold Ragu Gurumurthy, chief digital officer and chief innovation officer at Deloitte, suggests.
We have a lot of respect for Deloitte, but wow that’s a shockingly high threshold. By that argument a lot of businesses needn’t worry about having a CDO. In fact, looking at the Globe and Mail ROB Top 1000 rankings, only around 100 companies in Canada meet the $2 billion threshold.
Now, I’m not suggesting that we have a better magic number. (In fact, we question whether revenue should even be a consideration in favour of a more nuanced look at the potential benefits.) But we think every company needs to be thinking like a CDO…even if they don’t hire one full-time.
Wait…what is a CDO?
The role of a CDO (Chief Digital Officer) is a combination of a digital strategist and evangelist. Someone who can not just identify needed technology, but lead the internal communication and change management necessary for successful adoption.
Minda Zetlin wrote in CIO that, “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 technological future in a way many CIOs don’t have the bandwidth to do.”
Whether the decision to hire a CDO starts with changing customer expectations, or a need improve internal operations, an effective CDO will need to marry the two.
What’s more (and more exciting), following the path that connects those two drivers can lead to creating entirely new products or business models. For example, Netflix’s goal of delivering entertainment lead them to transition from shipping DVD’s to online streaming. That might seem obvious in hindsight, but there are more than a few music industry executives who would disagree, not to mention Blockbuster.
New Perspective for the C-Suite
Regardless of the size of your organization, digital is now so core to your success that it is — or should be — the responsibility of the whole c-suite.
Theo Priestley argued this two years ago when he questioned whether there is ever a need for a CDO in Forbes. He wrote that “the Chief Digital Officer is a role born from the apparent need to fulfil responsibilities that are accountable and delivered by each of the C-suite separately in their own duties.”
What Priestley doesn’t allow for is that for some organizations, particularly those with older and more traditional cultures, there can be value in an outside perspective. Whether it’s because existing staff don’t have the bandwidth or there’s too much organizational momentum for internal resources to overcome, sometimes it takes an outsider to ask the right questions and advocate for the necessary changes.
So, what’s the answer, do I need a CDO?
If you’re doing business the way you always have and don’t anticipate that changing, then you should definitely be looking to get some outside perspective.
On the other hand, if you have identified the need for digital transformation, but you aren’t sure which new technologies or innovations are relevant to your business or how to implement them, then you’d benefit from assistance looking at your business through a digital lense.
If you’ve got the resources, you might be in the position to hire a full-time CDO. It could also mean a new hire with a different title, a change in role for someone internal, or help from consultants (*waves* Hiii!).
Whichever option best suits your needs and organization, the continued existence of your business rests on your ability to understand the challenges and opportunities that come with digital transformation and champion the changes necessary.