Three types of chief digital officers and the reasons organizations adopt the role

Abstract

Digital innovation impacts every industry, and in response, many organizations have introduced a new C-suite leadership role-the chief digital officer (CDO). Based on interviews with 35 CDOs from various sectors, we have identified the domains where successful CDOs build digital capabilities (digital innovation, data analytics and customer engagement) and three types of CDOs-digital accelerators, digital marketers and digital harmonizers. Each type focuses specifically on one of the digital capabilities. The article concludes by considering the relationship between CDOs and CIOs.

Full text

June 2017 (16:2) | MIS Quarterly Executive 121
The Rise of the Chief Digital Officer12

3
        4     
               

            
             
         
5          
1 Jeanne Ross is the accepting senior editor for this article.
2 The authors gratefully acknowledge the support and time of all the CDOs who participated in the study, as well as the editorial
and review team for detailed and insightful feedback. This research was funded by the Research Fund of the University of Liech-
tenstein (Forschungsförderungsfonds der Universität Liechtenstein) in frames of the project wi-1-14 “Institutional Logics of Digital
Innovation.”
3 Rickards, T., Smaje, K. and Sohoni, V. “Transformer in chief: The new chief digital ofcer,” McKinsey & Company, 2015.
4 Grossman, R. and Rich, J. The Rise of the Chief Digital Ofcer, Russell Reynolds Associates, 2016.
5 Singh, A. and Hess, T. “How Chief Digital Ofcers Promote the Digital Transformation of their Companies,” MIS Quarterly
Executive (16:1), March 2017, pp. 1-17.
Three Types of Chief Digital Officers and
the Reasons Organizations Adopt the Role
Digital innovation impacts every industry, and in response, many organizations have
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Sanja Tumbas
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Nicholas Berente
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Jan vom Brocke
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122 MIS Quarterly Executive | June 2017 (16:2) misqe.org | © 2017 University of Minnesota
Three Types of Chief Digital Ofcers and the Reasons Organizations Adopt the Role
      
     
      
     
     
       
    
     
   
     
    

   
   
     
      
      
       

       
       

      
      
     
    
      
     
      
     
      

   

      
   
     
      

         
     
    6 

 7    

6 Peppard, J., Edwards, C. and Lambert, R. “Clarifying the ambigu-
ous role of the CIO,” MIS Quarterly Executive (10:2), June 2011, pp.
115-117.
7 Weill, P. and Woerner, L. S. Top-Performing CIOs in the Digital
Era, MIT Sloan CISR Research Breing, Vol XVI, Number 5, May,
2016
Characteristics of a
Successful CDO

     
       
       

     
      
      
     
      
      
     
      
    
       

      
      

      
    


    
      
       
    
     
     
     
       
     
       


fundamental way that we changed the
organization … digital is really integrated
into the experience while you’re in the
      
       
  
     
        
       


June 2017 (16:2) | MIS Quarterly Executive 123
Three Types of Chief Digital Ofcers and the Reasons Organizations Adopt the Role
     
     8 
  
       
8 Pseudonyms have been used for each of the companies.
      
       
    
      
Table 1: Overview of Respondents
Company8 Industry Sector Time in Posion (years) Country
FinancialServ 1 Banking and nance 0.25 U.S.
FinancialServ 2 Banking and nance 0.85 U.K.
InsuranceFirm Insurance 0.85 U.S.
HealthRelated Healthcare 1Europe
RetailOrg Retail 1.25 Australia
Manu&Retail Retail and manufacturing 1 U.S.
RetailCommunicaon Retail 3Europe
Manufacturing 1 Custom part manufacturing 2Europe
Manufacturing 2 Hard manufacturing 5.5 Canada
Manufacturing 3 Transportaon vehicle 1.5 Europe
ArchitectureDesign Architecture, engineering and construcon 4 U.S.
SowareCom 1 Soware 0.85 Europe
SowareCom 2 Soware 1 U.S.
FinancialServ 3 Banking and nance 0.5 Europe
Media Publisher 1 News publishing 1.25 Europe
Media Publisher 2 News publishing 1.85 Europe
Media Publisher 3 Specialized publisher 2Europe
Media Publisher 4 Specialized publisher 5.5 Europe
Media Publisher&TV 5 News publishing and broadcasng 0.5 Europe
Media Film 6 Film producer educaon/non-prot 4 Canada
Media TV 7 TV broadcasng 3.5 U.S.
Media Adversing 8 Adversing 1Europe
Media Adversing 9 Adversing 2 U.S.
Media Adversing 10 Adversing 1South America
Media Adversing 11 Adversing 1 U.S.
GovInstuon Governmental/non-prot 0.5 Europe
Labor Union Associaon/non-prot 0.25 U.S.
EducaonOrg 1 Educaon/non-prot 4 U.S.
CultureHouse 1 Culture/non-prot 1.5 U.S.
CultureHouse 2 Culture/non-prot 4 U.S.
DevelopSkill Leadership educaon/non-prot 1Europe
EducaonOrg 2 Educaon 2 U.S.
ConsumerGood 1 Consumer goods 1.5 U.S.
ConsumerGood 2 Consumer goods 1 U.S.
FinancialServ 4 Banking and nance 1Europe

124 MIS Quarterly Executive | June 2017 (16:2) misqe.org | © 2017 University of Minnesota
Three Types of Chief Digital Ofcers and the Reasons Organizations Adopt the Role
       

  
Paid … includes channels such as Google
     
      
     
    


       
      
     
      
     
    
     

The Digital Innovation CDO Domain

    
      
       
     

         
people to do something non-conventional
that normally happens in a conventional
        
 
      
are things that are traditionally done in a

       
        
    
     
Table 2: Digital Capabilities of CDOs
CDO’s Domain Relevant Capability Example Quotes
Digital
Innovaon
Building digital capabilies
for intense experimentaon;
pursuing strategic changes
to organizaonal processes,
products, services and business
models.
“I think my largest problem is … how can you transform
a business model from the print age. ... I think this is the
hardest challenge: how do you do that step-wise in a
certain amount of years [while] protecng the business
you already have but also building a new model.” CDO,
Media Publisher 1
Data Analycs Building capabilies for data
analysis to gain insights into
both internal and external data
sources.
“With one of our design businesses—designing hotels,
resorts and such—we were able to look at … Trip
Advisor for … reviews of the facilies that we designed.
… We’re also looking at ways [of using] something from
Trip Advisor. What is public data, what can we use
from that and how do we do it? Likewise with design
forums or discussion groups and [so on]. Those are
the … non-structured data sets that we’re interested in
understanding: what’s the general conversaon, what’s
the general pulse?” CDO, ArchitectureDesign
Customer
Engagement
Establishing capabilies
for providing intense focus
on relaonships with the
organizaon’s customers;
delivering outstanding
customer experience by also
streamlining internal processes.
“In healthcare, our customers [are] pharmaceucal
companies, doctors and paents. Their expectaons are
changing from analog services to digital services. As a
result, one of the things that I do is study my customers’
customers’ needs so that I can ancipate as a vendor
what I should be supplying them with. In many ways, I’m
studying paent needs and … doctor needs to gure out
what pharmaceucal companies are going to need so
that we become the … next generaon supplier.” CDO,
SowareCom 2

June 2017 (16:2) | MIS Quarterly Executive 125
Three Types of Chief Digital Ofcers and the Reasons Organizations Adopt the Role
   
      
     
    
    
     
       
      

       
      

   
target audience more times in the day, as
well as to offer products to more people
      
very lightly, very agilely and very much
focused on speed and getting something
      
      
start learning together with the consumer
      
      
    

      
       
   

The Data Analytics CDO Domain
       
     
       
      

  
      
       


sets that we’re interested in understanding:
what’s the general conversation, what’s
      
hospitality world, our hotel and resort

      
       
 


       
         
     
      
        
         
      
      
   
    
      
    
        
   

The Customer Engagement CDO
Domain
     
   
     
      
       
 
      
    
       
   



      
       

“As a university student or a company, you
        
       
    
        
 

      
       


126 MIS Quarterly Executive | June 2017 (16:2) misqe.org | © 2017 University of Minnesota
Three Types of Chief Digital Ofcers and the Reasons Organizations Adopt the Role
     

    
       
     
lot of our partners come to us for social
    


        
      
      
     
         

       
       
     
    
       
      
      
      
      
        
       

      
     

Three Types of CDOs
       
     

Digital Accelerator CDOs
     
      
    
       
     
      
     
    
    
     
     
  
     

      
     
    
Table 3: The Digital Accelerator CDO Approach
Dimension Characteriscs Illustrave Quotes
Key Capability Digital innovaon “My primary KPI [key performance indicator] that I set for
myself is to create a digital experience that includes other
things as well. [We are] a mobile bank, we provision and
sign up bank accounts, savings, lines of credit only via the
mobile phone. We have a website as well, but there are no
branches.” CDO, FinancialServ 1
Primary
Objecve
Experimentaon and
implementaon
“[The IT department] had a very tradional approach,
wanng to buy very expensive analycs packages … have a
two-year roll-out. I was not willing to take that me. … I’m
very careful to say we don’t do educaon or training ... we
are not in the business of training people in Google analycs
or training people very hands on.” CDO, EducaonOrg 1
Reason for
Establishing
the Role
To adopt bimodal IT, allowing
the IT funcon to focus on the
underlying infrastructure
“In the old-fashioned way, [the IT funcon] worked very
[well]. I don’t know how much you are familiar with this
bimodal way of working [described by] Gartner … I think we
are very good in this mode, mode one I think is the lower
one … the [old IT] processes in this company are not made
for fast failure and [trial] and error.” CDO, FinancialServ 3

June 2017 (16:2) | MIS Quarterly Executive 127
Three Types of Chief Digital Ofcers and the Reasons Organizations Adopt the Role
     
       
      
    
          
    
      
     


 
    
        
      
need to transform the technology and the
       

      
        
       
      
     
     
       
      
      


pressures to deliver and execute and support
the operational systems … Digital was

of those pressures to deliver and execute the

   
    
 
    
    
      
      
      
       
    

     
      
    
    
      
     
     
    
       
       
     
      
      

      

      
        

       
  “we don’t
    
     

     
       
       
      
      


 

    
     
       
       
      

    
      
   
     

Digital Marketer CDOs
      
      
    
       
  
      
      


128 MIS Quarterly Executive | June 2017 (16:2) misqe.org | © 2017 University of Minnesota
Three Types of Chief Digital Ofcers and the Reasons Organizations Adopt the Role
      
    
     
   
      

     
       
      
       




     


   
      
       
    
    

       
      
      

      
      
        

        
       
     

         
    
       
    
     


      

    
     
       
      
      
    
     
  
    

Table 4: The Digital Marketer CDO Approach
Dimension Characteriscs Illustrave Quotes
Key Capability Data analycs “Our clients are hotel chains like Hilton, the Regent, … but [hotel
users now parcipate in] online communies about design, about
the spaces that are being built, etc. … We track these … sites looking
for [informaon]. We also look at … how [we] can learn from [things]
like Trip Advisor, … design forums or discussion groups and [so on].
CDO, ArchitectureDesign
Primary
Objecve
Customer inmacy “He [the CMO] asked for some advice from someone like me to …
show him what was possible on a digital front. I gave him some
comparables of companies who, in the consumer goods space, could
demonstrate real power of the brand, real strategic advantages
[from] … digital … and presented a new customer face that was more
in keeping with the millennial market and the younger markets,
which he wanted to aract.” CDO, ConsumerGood 1
Reason for
Establishing
the Role
To create a consistent
customer experience
across digital and
non-digital channels
“Markeng falls within my responsibility but also internal markeng,
external communicaons and so on. Eecvely, our customers or
potenal customers have mulple dierent touchpoints [from which]
they can reach out to us. Eecvely, I have to manage all of those.”
CDO Manufacturing 1

June 2017 (16:2) | MIS Quarterly Executive 129
Three Types of Chief Digital Ofcers and the Reasons Organizations Adopt the Role
      
having a direct-direct relationship with the
    
      
where previously they were dealing with
    
    
    
    

       
       
      
       

   

   
        

      
content, and an e-commerce store where
  
      
      
    

       
       
        
      

     

        
      
      

    

Digital Harmonizer CDOs
       
      
        
      
       
     
       
     
      
9      
     
     
    
     
  
      
      

   

       
     
      
     
a company, you see a lot of things pop up
   

    
going on across divisions, and teams and
     
      
       


      
         
    
    

      
culture and the approach, the strategic
      
       
      
     
direction, as opposed to children in parallel
play doing their own thing, which was how

       


     
     
9 Grossman, R. and Rich, J.,“The Rise of the Chief Digital Of-
cer,” Russell Reynolds Associates, Harvard Business School
Publishing, 2016.

130 MIS Quarterly Executive | June 2017 (16:2) misqe.org | © 2017 University of Minnesota
Three Types of Chief Digital Ofcers and the Reasons Organizations Adopt the Role
       
     
     
      
          
    
      
      
       
       


organizations that were really innovation
     
    

    
         
     
     
    
     
 
        
        
     

        
       
      
       
      
      
      
    
    

      
     
    
    
      
       

Table 5: The Digital Harmonizer CDO Approach
Dimension Characteriscs Illustrave Quotes
Key Capability Customer
engagement
“It’s a complete shi in the way we deliver customer value because
we understood that … other organizaons like LinkedIn and other job
posngs [were] opening up their doors for anyone to look and see
without having a payroll. We [asked ourselves] ‘How do we make our
organizaon more accessible to anyone?’” CDO, DevelopSkill
Primary
Objecve
Enterprise
integraon
“One of the things that I did was [to] build a digital strategy and a
strategic plan for the next 10 years and … a road map. … [I] then
worked with government, so that instead of everyone doing their own
individual digital projects … there was a process in place where a group
of people … at the working level [would] look at [digital ideas] and then
… very senior [managers would] look at [the ideas] and set priories
and connue to evolve those priories.” CDO, Culture House 2
Reason for
Establishing
the Role
When business
silos are liming
the impact of
digital innovaon
“When we set up new programs or projects, we create a team to
work on [them]. … We call [these teams] “squads” in the same way
that Spofy uses that term. [Thus] we create [a] central team of skills
from [within] the organizaon. [For] example, … we put a couple of
developers, a soluon architect, a user researcher [together with] a
data scienst and a designer [into a squad] … so [we] have the data
side very much represented within the digital side as well. We make
sure that we cover all relevant areas. These cross-funconal teams
[are] created from across … the dierent divisions, including digital,
data and technology.” CDO, GovInstuon

June 2017 (16:2) | MIS Quarterly Executive 131
Three Types of Chief Digital Ofcers and the Reasons Organizations Adopt the Role
Comparison of Three CDO Types
       
       10 
         
      
    

       
     
     
      

Bridging Traditional IT
(CIO’s Domain) and Digital
Innovation (CDO’s Domain)
       
        
     
      
      
       
11  

     
       

10 Other researchers have recently identied additional CDO
types, including entrepreneur, digital evangelist and coordinator (see
Singh, A., and Hess, T., op. cit., March 2017).The digital accelerator
encompasses the entrepreneurial spirit; the digital marketer has some
characteristics of the digital evangelist but focuses primarily on de-
veloping digital marketing activities; the digital harmonizer to some
extent is equivalent to the coordinator role but with a strong goal to
streamline internal processes for achieving customer engagement
11 Agarwal, R. and Sambamurthy, V. “Principles and Models for
Organizing the IT Function,” MIS Quarterly Executive (1:1), March
2002, pp. 158-162.
12 Guillemette, M. and Pare, G. “Toward a New Theory of the
Contribution of the IT Function in Organizations,” MIS Quarterly
(36:2), 2012, pp. 529-551.
    
        
       
     
      
    
       
   
     
     
      
     
          
    
      
   


      
legacy systems, maintaining all of the
right stuff for legal matters, compliance,

     

        
     
     
       
amounts of information that you need to

 
      
     
     
     
         


Table 6: Overview of the Three Types of CDOs and Their Key Characteristics
Dimension Digital Accelerator Digital Marketer Digital Harmonizer
Key Capability Digital innovaon Data analycs Customer engagement
Primary
Objecve
Experimentaon and
implementaon
Customer inmacy Enterprise integraon
Reason for
Establishing
the Role
To adopt bimodal IT while
allowing the IT unit to
focus on the underlying
infrastructure
To create a consistent
customer experience across
digital and non-digital
channels
When enterprise business
silos are liming the impact
of digital innovaon

132 MIS Quarterly Executive | June 2017 (16:2) misqe.org | © 2017 University of Minnesota
Three Types of Chief Digital Ofcers and the Reasons Organizations Adopt the Role
     
      
    
      13
      
      
       
14     
     
15     
 
     
    
    
      
     16
       
17
      
     
       
      
     18  
        
       
       
     
         



function, there’s usually a strategy shift
which comes with it as well, and there’s no
       
  

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business/21591201-information-technology-everywhere-com-
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      



        
      
      
     
    
       
       
         

    
        


     

      
   
  
 

      


       

●


●



●


  
    
       
    
    
  19    
19 Gregory, R. W., Keil, M., Muntermann, J. and Mähring, M.
“Paradoxes and the Nature of Ambidexterity in IT Transformation
Programs,” Information Systems Research (26:1), 2015, pp. 57-80.

June 2017 (16:2) | MIS Quarterly Executive 133
Three Types of Chief Digital Ofcers and the Reasons Organizations Adopt the Role
     
        
    
     
    
       
 
        

       
     
      
     
      
    

        
       

     
       
    
     
        

       
    


        
 

     
      
      
       

     
       
       
     
     
    
  
        
       

20 vom Brocke, J. “Interview with Martin Petry on ‘Digital Innova-
tion for the Networked Society,’” Business & Information Systems
Engineering (58:3), 2016, pp. 239-241.
21 Weill, P. and Woerner, L. S., op. cit., 2016.


     
       
       
  
      
    
      
     
       
      
       
        


Concluding Comments
     
     
     
     
     
 
  
     
  
      

    
     
       
   


      
 
       
      

 
    
      
       
        
     
22 Peppard, J., Edwards, C. and Lambert, R., op. cit., June 2011.
23 Bird, J. “Fierce competition for chief digital ofcers,” Financial
Times, September 29, 2015.
24 Singh, A. and Hess, T., op. cit., March 2017.

134 MIS Quarterly Executive | June 2017 (16:2) misqe.org | © 2017 University of Minnesota
Three Types of Chief Digital Ofcers and the Reasons Organizations Adopt the Role
       
       
         
       
     
         

      
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Appendix: Research Methodology
     


        



      
        
       

        
   
   
   
 
  

 
       
     

      
       
   


About the Authors
Sanja Tumbas
    
      
     
       
    
   
      
     

Nicholas Berente
    
    
      
       
     
      

     

Jan vom Brocke
    
      
     
    
     
      

    
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