I am often asked to help people define what CEOs should look for in a candidate for the Chief Digital Officer position. My past eight years of digital experience have taught me that most companies tend to clearly see one or two sides of the job description and corresponding skill set, but cannot articulate in their entirety what should really be a multifaceted role – nor their expectations for impact or even outcome metrics.
This is my cocktail-napkin framework for the skills you should expect a Chief Digital Officer to bring to your company. A 2012 Russell Reynolds article listed part of them, but I believe this framework completes the scope of the role in important ways that were not originally covered; for more literature, see this McKinsey survey and this Forrester report (Forrester clients only). So, what does the CDO need to know how to do?
- Online marketing, social media and digital PR. Most marketing and communication-focused companies, such as those in fast-moving consumer goods, are quite aware that the ways to drive brand awareness and engagement have shifted dramatically in the digital era; and that they need to move from traditional metrics, such as GRPs, to much more granular digital measurements. Market research, a cornerstone of many organizations’ plans, is largely shifting to online platforms, too; and digital listeners who can find the signal in the noise are in high demand. Yet, listening and communicating well in the digital domain are far from the only required capability; and what looks like the cutting edge today quickly becomes table stakes tomorrow.
- E-commerce, digital distribution, multichannel. Retailers and manufacturers in many sectors are aggressively pursuing online sales: consumers are looking for your products online anyway, so hiding your head under the sand does not work, and in high-margin sectors such as premium and luxury goods a digital sales strategy is – at last – no longer shunned as damaging to the brand. Metrics here are about conversion, revenues and margins. The Chief Digital Officer will be the cross-channel integration champion in the organization, knowing when to push and where to stop: users will prize a seamless experience across a few channels much more than a complicated and fault-prone experience across many channels.
- Online service and CRM. Customer expect you to be online, 24/7, to answer their questions, and no longer just at the other end of a toll-free number. What often starts as a marketing-focused corporate social media presence almost always needs to be complemented by strong online customer support capabilities; forward-looking banks, insurance companies and utilities are increasingly proving their worth in this arena. Here, the relevant metrics are customer service metrics; a digital customer operations mindset and expertise are needed, enabling in turn the generation of additional upselling and cross-selling opportunities.
- Digital product and technology. The previous three quadrants extend what you are doing in the analog domain and can give you a competitive advantage: yet, it is only if you are able to reinvent your product into a profitable digital experience that you leave your competition in the dust. Media publishers, music and movies have struggled with the “profitable” part of the equation. Among successful examples, on the other hand, witness how Nike has positioned the Nike+ FuelBand at the center of a whole new Nike+ ecosysytem - remember, they used to make running shoes. A lesser-known but fine example of product redesign for the digital era is the new Getty Images watermark. From thermostats to cars, over the next few years all sorts of products and services will become very different from what we know today. If you’re not sure, go back and re-read Marc Andreessen on why software is eating the world. A good and easy-to-read guide to some of the disruptions is the recently published Age of Context by Scoble and Israel.
(Note that you can use this framework to get immediate clarity whenever a fuzzy digital project comes your way. Suppose, for example, that your team tells you “we ought to make a mobile app.” Is this a communication (or, worse, a vanity) app? a sales app? a service/CRM app? or an app that supplements, enhances, reinvents or revolutionizes your product or service? This way you can quickly define the right metrics and set your ambition levels.)
Underlying these four capabilities, your Chief Digital Officer should be able to foster a digital culture and nurture digital talents. Collaboration and knowledge sharing within the company must mean more than having an intranet, a digital suggestion box or even a prediction market: digital tools should foster your employees’ sense of community and belonging. Millennials thirst for transparency, openness and meritocracy; they will expect your company to be much more like an open-source-based software project and much less like the bureaucracy you grew up in. See this Gary Hamel talk if you’re not sure of what you should aim for.
In summary, a Chief Digital Officer is not just – as he or she is often portrayed to be – a good general management talent who has learned a few sexy digital marketers’ tricks. In my experience she will be much more impactful if she has a 360° vision of the future around her, not just of her product or industry; if she knows the front line well and has got her hands dirty with operations; and if she is unafraid to lead the evolution of the company’s culture.