In some companies, the CDO acts as a catalyst for innovation and fosters a culture that embraces new technologies and digital practices. A good example here might be Domino’s Pizza: By prioritizing digital innovation, they introduced a wide range of digital ordering options and, with that, more revenue. This shift, driven by digital leadership, has positioned Domino’s as a leader in the fast-food industry in terms of digital engagement.
The well-known and relatively common challenge in large organizations is the existence of silos that hinder cross-functional collaboration. This was probably the most common scenario I have encountered, but the CDO can bridge these gaps by ensuring the corporate digital strategy and digital initiatives are aligned across departments.
The case against
As digital technology becomes omnipresent, there’s an argument that digital strategy should be integrated into every business unit rather than centralized under a single executive. This approach helps to empower leaders within their departments, and in some cases, this accelerates digital integration.
The responsibilities of a CDO often overlap with those of Chief Information Officers (CIOs) and CTOs, leading to confusion and redundancy. I have experienced that in some companies, the roles and responsibilities of a CDO have been absorbed by these, suggesting that a separate CDO may not be necessary (anymore).
I have also heard a lot of criticism that the CDO role is short-term and focused on driving immediate digital transformation. Once digital practices are established, the need for a CDO often diminishes. We have seen this in companies like Starbucks, which phased out the CDO role after achieving significant digital milestones.
But of course, the decision as to whether a Chief Digital Officer is needed in your company is likely not made based on the listed pros and cons. Evaluating each company’s situation is also essential, as this will be a key driver.