Chief Digital Officer: Not Just A One-Hit Wonder?

Daniel Renkel

According to leading consulting companies, the chief digital officer (CDO) is an established role within the C-suite.

This might be true for regions like the U.S. and not so true for Europe and other more traditional economies. However, from a practical point of view, it is still unclear whether the CDO will be around for the long haul.

The rise and fall of the CDO

Most results for searching “chief digital officer” on channels like the Harvard Business Review date from 2013 to 2016. The earlier results have a generally positive attitude toward the CDO, with headlines like “The Rise of the Chief Digital Officer,” while the later ones paint a blacker picture with titles like “Say Goodbye to the Chief Digital Officer.”

An SAP survey of 450 global account directors who are responsible for managing SAP’s most strategic customers underpins that: In only 16% of the customer accounts, the digital transformation is driven by the CDO, compared to 34% favoring the CEO. From the perspective of the SAP Center for Digital Leadership, business leads will rise as additional top dog candidates for driving digital initiatives.

So, the question stands: Is the chief digital officer a one-hit-wonder that is already on the descent? Or is the role of the CDO evolving into multiple other ones and therefore not as omni-present anymore?

A day in the life

According to public opinion, a CDO is responsible for many to all digital topics within a company. One of the most important agenda items is the identification of new business opportunities that have been created by the digital revolution. In other words, the CDO is helping a company turn digital opportunities into top-line growth.

Now, who is this character ideally? Stefanie Waehlert, ex-CDO of German-based tourism and travel goliath TUI, explains that a CDO must be a strong change manager, a strategist, a “do-er,” and a great storyteller. Not your typical “one-size-fits-all” kind of job. In theory, however, the role could be a real value-add to organizations trying to navigate the uncertain waters of the digital era.

A picture-book example of a chief digital officer is Atif Rafiq, a Yahoo and Amazon veteran. He joined the fast food giant McDonald’s as its first CDO back in 2013. He pushed toward digital and mobile initiatives to refocus on young consumer segments. The McDonald’s ecosystem was extended toward delivery service startups like Postmates hoping to close the gap with existing, established, and earlier fast-food-delivery chains.

Rafiq’s latest stroke of genius can be seen in many U.S. McDonald’s stores, which are equipped with self-ordering kiosks that enable customers to co-create and build their own burgers, in contrast to the rather traditional product and service offering.

Now that McDonald’s digital transformation is full speed ahead, its CDO has taken up a new challenge – not atypical for this breed of C-level leaders. As of late last year, Rafiq was working to digitalize the car experience for Volvo.

The sober truth

Looking at the German, Austrian, and Swiss market, 53% of companies between 500 and 50,000 employees do not have a CDO. And of the 47% that do, only 26% see the responsibility of driving digital transformation sitting primarily with the CDO; a vast majority see it belonging to classic IT.

Only time will tell

Looking toward the near future, it is safe to say that any predictions about the CDO role’s existence are as sure as peeking into a crystal ball. Whether the future of digitalization is at the hands of the CDO is an unanswered question.  A few years ago, the public opinion honored the CDO as the digital superman, but today the question is whether you need to establish a new company CDO or is it better to equip one of the other leaders with the related tasks.

As with almost everything about the digital economy, the role of already established CDOs will re-invent itself faster than we can anticipate – in one form or the other.

As a leading digital pioneer, the SAP Center for Digital Leadership helps CxO customers and their organizations navigate their digital transformation and lead with innovation. Based on SAP’s internal digital transformation learnings, the research agenda, and meetings with more than 150 CxO customers per year, the center provides leaders with best practices for leading digital transformation.

The network and partner ecosystem represents today’s and tomorrow’s leaders in digital business. Partners like European Space Agency and Wacom trust the center and jointly create digital open ecosystems.

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Daniel Renkel

About Daniel Renkel

Daniel Renkel is an IT business consultant for the Center of Digital Leadership at SAP.