How To Best Select and Partner with a Digital Transformation Officer

March 16, 2020 · Paolo Timoni

According to leaders in the executive recruiting industry demand for chief digital officers is currently far greater than supply. Also, there are many different ways in which the role is defined at different companies often generating confusion and in some cases suboptimal results. To foster success CEOs and Board members embarking in a new digital transformation journey should partner with a digital transformation officer and put thoughtful considerations on how to define the right profile, setup the role, and structure his or her compensation.

Defining the ideal candidate profile

The Chief Digital Officer is not only a digital guru but also a seasoned general manager. He or she should have experience running a P&L and also change management experience either in turnaround or fast-growth situations.

Russell Reynold Associates, The Rise of the Chief Digital Officer

In a company aiming to accelerate value creation, a chief digital officer needs to have the ability to lead transformation across the organization and a combination of hard and soft skills:

  1. The ability to articulate and operationalize a digital strategic vision built around the customer experience, in combination with a strong bias for action, bold thinking, and a high tolerance for risk;
  2. The capacity to take on problems by identifying root causes across functions and to make the tough decisions necessary to resolve them;
  3. Hands-on digital expertise spanning e-commerce and transactional expertise, online marketing and social media expertise, and transformative products and technologies;
  4. Experience in striking the right balance between achieving near-term impact and setting in place the conditions for longer-term success that will allow the organization to compete digitally;
  5. High emotional quotient and strong interpersonal skills to foster collaboration, minimize internal conflicts, and maintain forward looking momentum.

Today's CDOs' varied backgrounds suggest a misalignment between the objective of the hiring company and the actual talent and expectations attached to their role.

Egon Zehnder, CDO Decoded

After two decades of the Internet there is a reasonable cadre of mid-level digital managers with product, technology, or marketing backgounds. However, there are relatively few senior general managers who have worked across functions or have had extensive Board experience.

Russell Reynold Associates, The Rise of the Chief Digital Officer

Setting up the new role for success

In order to setup the new digital transformation officer role for success, CEOs and Board members should consider the following best practices:

  1. Reporting directly to the CEO and the Board with monthly or at least quarterly Board interactions;
  2. P&L responsability aligned with the expected business transformation goals including responsability for sales, capital expenditure and funding for a dedicated team including marketing, sales, engineering, and change management professionals.
  3. A bias on longer-term results, tolerance for early stage mistakes, and expectations of progressive optimization and validation during the initial 12 to 18 months.
  4. Encouraging support from other members of the top management team and especially from the CMO and CIO.
  5. Structuring compensation with a significant performance-based equity component vesting based on the value creation achieved through the digital transformation program.

Many CDOs I know are stuck between marketing and IT, building business cases or writing requirements with no authority to actually build or change anything.

Forbes, Pradeep Aradhya, How to setup a chief digital officer for success - March 12, 2020