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The search for the new digital leaders

Career + Application Leadership + Management |

Picture: Gorodenkoff / fotolia

Almost one in five of the world’s 2,500 largest public companies have now named an executive to lead their digital agenda. This number is up from just 6 per cent from two years ago, according to a study by Strategy&Business. The move to install Chief Digital Officers gained momentum: 60 per cent of the digital leaders have been appointed since 2015. 

In the early days of the digitalisation trend, different business units and corporate functions conducted experiments and pilot programmes to kick-start digital efforts, say the consultants. But once a company decides to design an all-embracing strategy to capture the benefits of digitisation, that decentralized approach does no longer work. The role of a CDO therefore is to develop and implement a comprehensive digital strategy.

Larger companies are more likely to have a CDO in place, as are companies based in North America and Europe, and most CDO are men (84 per cent in 2016). But there are some notable differences in the findings compared to the study from 2015: Two years ago, consumer-facing industries such as communications, media and entertainment; food and beverages; and transportation and travel were leading the way in appointing digital leaders. Today other industries - most notably insurance and banking - seek not only to boost their customer-facing activities but also to more fully digitize their internal operations.

Also noticeable is a shift in the background of new digital leaders. In 2015, just 14 per cent of CDO had acquired their primary expertise in a technology field; in 2016, that proportion more than doubled, to 32 per cent. Meanwhile, the percentage of CDO with marketing, sales and customer service backgrounds fell from 53 per cent to 39 per cent. And the percentage of technology-oriented CDO in the C-suite is even higher - 41 per cent, compared with 33 per cent for marketing and sales CDO.

When it comes to implementing a digital strategy, the new class of CDO often encounters several major obstacles upon assuming their role, explain the consultants: “Ad hoc digital initiatives spread throughout a large organisation, lacking central oversight; a traditional culture that resists change; a gap in the talent required; and legacy systems and structures that threaten to derail their ambitions.”

The talent gap remains a critical challenge for companies seeking transformation. PwC’s most recent Digital IQ study found that the lack of properly skilled teams was considered the number one hurdle to achieving expected results from digital technology investments; 61 per cent of respondents identified it as an existing or emerging barrier. In another telling finding, the survey revealed that 46 per cent of CDOs are external hires. 

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