This is how companies use chief digital officers correctly

The role of the CDO can currently be the most important position in the company – or the least useful. This is due to the lack of a clear definition of the role and its anchoring in the company.

New competitors, who digitize themselves faster and more consistently and thus quickly gain market share, bring previously very successful companies such as P&C, C&A, Toys’r’Us, Mytoys or Gerry Weber more and more difficult. In order to react to this, the companies have been gradually bringing more and more Chief Digital Officers (CDO) to their management floors since 2016. For successful digitization , you need brave new CEOs, sales, IT and HR managers who understand not only traditional retail, but also the digital world 100 percent. A CDO can provide support on an interim basis at most.

“Kill your company – every day in an emergency”

In the future, only those dealers will survive who are either large and dominant in the market, who have verticalized as manufacturers or who have specialized to a high degree. The middle is dead and the regional USP is losing importance thanks to ever better shipping processes.

For companies this means: They have to revolutionize their killer factors, i.e. radically automate and digitize processes for maximum cost efficiency and speed. You need the necessary flexibility, also in the way you work in order to be able to react more agile and faster to changes in the market. And they have to develop from a regionally shaped business model to one that is nationally competitive. It is not only important to radically further develop the relevant killer factors product, price, frequency, marketing, services, features, IT and processes and organization. Companies must also have the courage to change, let go of tried and tested success drivers and learn from the success of new models. To put it bluntly, it means for companies: “Kill your company – every day in an emergency.” Misery discussions in gigantic rounds do not lead to anything. Now decisions have to be made.

CDO – currently the most misleading position in many German companies

“IT follows the strategy” – the saying that still applies today is known from the 80s. The difference to earlier is: When you talk about IT today, you don’t just mean the fax machine or ERP software. Today, IT forms the basis for all business models (online shops, social channels) and also for maximum automation and the associated increase in competitiveness. For this purpose, many companies are now bringing in a Chief Digital Officer. A part of the company defines him as the one who understands the new e-business world and will therefore find the solutions for the further development of the business strategy. The other half see him as a technical and process-oriented person.

It is completely forgotten that in view of the current market development it is not about a slight evolution of the existing business. What is required is a tough revolution, a real change, the courage to make maximum changes. But that cannot be the job of a CDO. That was, is and remains the task of the CEO – together with the management. A CDO can support you as an interim business revolutionary and, with a profound understanding of digital, drive the further development of the business model, including product, price and marketing strategy, together with the management.

The same applies to the role of the CDO as an automation and process digitizer. This is also not a CDO responsibility, it has always been the job of the IT boss. However, it is essential that the role and working methods of the IT bosses change. He must take responsibility for the process-related digitization and become much more agile and flexible in his way of working.

A CDO cannot implement cultural change either. This is the job of the HR manager and has to be driven either by HR, appropriate program managers or coaches. But change only begins when it is exemplified and implemented by the entire management. Unfortunately, many companies make the mistake of confusing process optimization with digital change. You pay lip service to CDO, but then don’t have the courage to take the appropriate action.

A CDO can only successfully digitize at eye level with the CEO

A CDO is therefore neither a new e-commerce boss, nor a new IT boss, nor a new marketing boss, but is responsible for corporate development in close coordination with the CEO. The CDO has to come from a business background, understand the new customer needs, develop new digital business models from them, bring international know-how, understand working methods and develop strategies together with the teams and above all: implement and implement them!

In order to be able to do this successfully, a CDO needs one thing: power and real decision-making authority – and a CEO who is brave enough to consistently follow the path. Positioned next to the CEO and given clear responsibilities, a CDO can successfully initiate the change in close consultation. To put it simply: the CDO becomes the CEO with equal rights in the company and shares with the existing management the tasks of the existing business and stakeholder management as well as the development of the new business. And what does that mean for the heads of IT, sales and marketing? Either they can also develop radically digitally or have to be replaced. Here too there are only two alternatives: courage or goodbye.

Without this clarity and definition of the role, a CDO is nothing more than a declaration of intent – and thus ineffective like antidepressants for heart attacks.

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