Chief Digital Officer Study 2019: The CDO era has peaked

Businesses are becoming cognisant that digital transformation efforts should be led by the broader organisation, rather than fall on one person.

Like the strategy itself, the capabilities and focus of the CDO should be regularly revisited to ensure they’re meeting the needs of the business.

Back in 2016, we predicted that the era of theChief Digital Officer would be short-lived. After all, the role of a good CDO is to put themselves out of a job.

The data from this year’s PwC Strategy&Global Chief Digital Officer Studypoints to a trend that, after a relatively quick rise to prominence, the corporate world has hit — and past — peak CDO. The study, which examines the top 2500 publicly listed companies by market capitalisation globally, found that just 54 companies created a CDO role in 2018, a sharp decline from two years prior, where the number reached as high as 160.

Overall, 21% of all companies studied had a CDO in 2018, compared with 19% in 2016. It’s marginal growth when considering the number more than trebled in two years from 2014, when the number was 6%. But this slowdown isn’t cause for alarm. Rather than a sign that organisations aren’t prioritising digital transformation, it’s evidence that creating a digitally enabled, competitive company isn’t (and shouldn’t be) the job of one individual.

The role of the CDO — defined by the study as an executive whose responsibility is to develop and implement the company’s digital strategy — is to sculpt an organisation into one that is more agile, enabled, and digitally focused. The rapid rise of this role within the past decade has corresponded with leaders of the world’s biggest companies recognising the urgent need to overhaul their digital capabilities to compete.

Indeed, the study, now in its fifth instalment, illuminates how much has changed in terms of how companies perceive and prioritise digital transformation. As ‘digital’ begins to form part of businesses’ DNA, the profile and position of the CDO role are changing. More than half of digital decision makers (54%) now sit on the C-suite of their organisation, compared with 40% in 2016. This also signifies that leadership understands for transformation strategies to gain the momentum and gravitas required to effect change across the whole organisation, it must come from, and be driven by, the top.

The profile of a CDO is changing as expectations of the role matures. The tendency for CDOs to have a technology background rather than marketing capabilities is a continuing trend. Just 18% of CDOs identified in the study have a marketing background, representing a sharp fall from 51% in 2014 when the study began, while those with a technology background now account for 41% of all CDOs, up from 14% five years previously. In some companies, chief information officers are stepping into the CDO role, which may be contributing to this rise.

While they of course must be tech savvy, the trend towards CDOs with technology backgrounds may pose a risk to transformation efforts. To truly transform an organisation, what is needed is a broader strategic CDO that drives innovation, starting from the core — the business model.