Being a chief digital officer (CDO) is not easy. Unlike other C-suite executives, we have a mandate to drive change and digital transformation. And the only way to make that happen is by collaborating with people at every level across the organization – from the CEO and CFO to the most junior person in the marketing team.
Building such relationships, and persuading the business to embrace change, means we have to act like a smart corporate politician. But in an environment where change is hard to achieve, sometimes we also need to act like cowboys: take bold decisions that drive real progress, and occasionally break the rules. As a CDO, it is sometimes better to ask for forgiveness rather than permission.
At paintings and coatings giant AkzoNobel, for instance, I spent nine months discreetly working with a partner to rebuild the entire technology stack. I committed to and funded this investment out of my own CDO budget. The investment was significant financially, but brought huge strategic benefits because it enabled us to scale our existing and future digital assets to 50 countries in an operationally optimized manner. For example, it enabled us to roll out new websites and apps quickly with the right languages and localized stock-keeping units (SKUs), content, color collections and much more. There simply wasn’t anyone in the business at that time with whom I could have had a strategic and technology-based discussion about it. It was the right thing to do, so I just did it.
As a CDO, knowing when to channel your inner politician or cowboy is just one ingredient for success. In my 10 years as a CDO, in three different global companies, I’ve learned that in order to make real change within any business, you also need to continuously take on six important roles: strategist, change leader, tech builder, number cruncher, marketer and team leader.
Digital transformation is never a goal in itself – it is a way to achieve the business’s wider strategy and purpose. As a result, the digital strategy should be fully grounded in the company’s strategy.
It should be communicated in two directions: to the digital team so that they fully understand the importance of their work and feel connected with the wider enterprise, and across the business so that they buy into and support the digital initiatives.
The CDO must lead this. First, they must understand their business’s strategy and the CEO’s key objectives for the next three years. Then, they must determine how digital initiatives can help, and establish a strategic framework. This should provide a structure for everything that the digital team does and communicates. After all, if a digital project doesn’t help the company execute its strategy, is it worthwhile?
At AkzoNobel, for example, I created a digital “strategic house” that structured everything, including targets, team organization, reporting, budgeting, cost-savings measurement and much more. It helped everyone understand what we were doing, why we were doing it and how we were performing.
As a CDO, executing successful transformation requires driving change. It means creating and executing a change management plan that covers everything from culture and delivery to training for the marketing team.
In large corporations, change may prove difficult and takes time. In order to sustain momentum, it is critical to follow change management best practices, such as realizing quick wins, and building and sharing success stories and proof points at every opportunity.
The CDO needs support from the entire digital team to successfully execute and sustain this change effort. I’ve had success by assigning everyone in the digital team with a stakeholder, or group of stakeholders, they should engage with in order to push change through.
Effective long-term digital transformation requires the business to invest in new technology. This usually needs a different approach, involves different products, and happens at a faster pace than traditional technology. For instance, it usually demands an agile approach that facilitates collaboration between users, user-experience professionals and developers.
In many traditional businesses that do not create or sell technology-enabled products, the IT team and the CIO or CTO do not have this expertise. Under these circumstances, the CDO needs to assume responsibility and budget for digital program execution, including technology products and people.
If the organization design does not allow this, the CDO needs to invest in building a deep relationship and collaborating with the CIO or CTO to collectively develop and execute a shared digital vision.
Digital transformation requires significant investment – especially in new technology. Just as in every function, budgets are always challenged, so CDOs need to be fully prepared to explain in detail how the investment will be used and the expected results. They should also set an example of lean, efficient, and transparent budget management. Indeed, it can be difficult to reverse a perception that the CDO burns through cash with minimal results.
How can this be done? There are many possibilities depending on the company’s structure. It can mean reviewing suppliers and contracts – with the support of procurement and finance teams – to drive efficiencies. It can mean moving from retainers to fixed prices to reduce costs. It can also mean offshoring activities such as software development, leading to huge savings if well executed.
At AkzoNobel, for example, we managed to scale our digital initiatives tenfold with the same budget by renegotiating contracts, offshoring, and building common global platforms. We also developed a dashboard that monitored the financial impact – cost savings or additional revenue – of each initiative. Reporting clearly on how much is being saved and gained will make the whole C-suite understand that the CDO is a genuine business leader.
“Digital teams must constructively challenge processes and ways of working, such as how the marketing team promotes their products, how the IT team stores data, and how SKUs are updated”
Businesses love to showcase how innovative they are, because it can create interest and buzz around them, and that can attract customers and top talent.
The digital team can play an important role in helping the business market digital innovations. But first the CDO needs to build a strong relationship with corporate communications and PR teams to understand their strategy and goals, and the types of content they need. Armed with this knowledge, the CDO should then regularly update these teams on digital initiatives and products, and provide relevant content and case studies that showcase innovations and fit the corporate communication strategy.
For example, in 2014, the digital team at AkzoNobel created the augmented-reality Visualizer app, which enabled customers to virtually paint colors onto their walls through their phones or tablets. The app won multiple awards and achieved a lot of PR activity. Everyone in the company – from the CEO to sales reps – knew about it. This created confidence in and support for other digital initiatives.
Delivering on a digital transformation agenda is often difficult, takes time and can create friction with other functions. For example, digital teams must constructively challenge processes and ways of working, such as how the marketing team promotes their products, how the IT team stores data, and how SKUs are updated. It is a marathon that requires a long and sustained effort.
The CDO cannot and should not manage everything. It is absolutely necessary to delegate and give team members authority to make decisions in their own sphere of responsibility. This will also increase the team’s engagement and commitment.
It is therefore vital to ensure the commitment and productivity of each team member, align their abilities with their role, always provide support and create bonds between members. My motto in my team has always been “work hard, play hard”. Collective achievements and strategic milestones should be celebrated.
Driving successful execution in a complex and dynamic environment where each stakeholder has their own view, agenda and expectations requires more thinking and alignment than is needed in other functions. Based on my experience during this past exciting and exhausting decade as CDO, simultaneously and relentlessly owning and nurturing these six critical areas is key to success.
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