Where does the chief digital officer fit into retail’s executive team?

Discussion
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Feb 04, 2021
Tom Ryan

The role of the chief digital officer continues to evolve as digital transformation increasingly impacts many parts of retailing. A new study from Deloitte finds that the role’s success depends on how they perform within four archetypes. These are:

  • The Disrupter: Typically reporting to the CEO with high accountability and decision efficiency, the Disruptor has the mandate to transform existing business models and ways of working. Cons of the position may include too much accountability in organizations where the overabundance of changes can be overwhelming.
  • The Innovative Integrator: Also reporting to the CEO, the Innovative Integrator primarily focuses on the highest-priority innovations but may lack full control over all digital execution, i.e., product R&D.
  • The Market-Minded Maven: Typically reporting to the CMO or CRO, the Market-Minded Maven drives new digital solutions for customer-facing channels and routes to market. The downside is the role may be disconnected from other business units.
  • The Technology Integrator: Usually reporting to the CIO or CTO, the Technology Integrator accelerates change based on single-outcome initiatives that optimize operations. The shortcoming is that initiatives undertaken may not adapt quickly enough with changing business needs and key components of business strategy may get overlooked.

The study found that empowered chief digital officers, backed by strong mandates and executive support, could produce significant operational improvement. Deloitte wrote in the study, “The rate and scope of digital transformations are highly individualized to each organization, and it may take months or even years to transform.”

Gartner recently predicted that half of chief digital officers without a chief data officer peer will need to become the de facto chief data officer to succeed. The “2021 Gartner Board of Directors” survey found that 69 percent have accelerated their digital business initiatives in response to COVID-19 disruption and are moving faster now than before the pandemic began. Seventy-eight percent said that analytics will emerge as the top game-changing technology from the COVID-19 crisis.

Mike Rollings, VP at Gartner, said in a statement, “The success of these endeavors is intertwined — a digital business cannot exist without data and analytics.”

DISCUSSION QUESTIONS: Has the role of the chief digital officer significantly changed over the last year? What role do you see CDOs playing in retailers’ unified commerce efforts?

Please practice The RetailWire Golden Rule when submitting your comments.
Braintrust
"Chief digital officers will play a significant role in facilitating the digitizing and 'futureproofing' of existing retail stores."
"If the role of the chief digital officer has not changed or evolved over this last year then the company is not keeping up with the accelerated pace of digital commerce."
"Given that the customer now thinks “digital first” for not only retail, but for everything else, it’s common sense 101 that business organizations should follow suit."

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23 Comments on "Where does the chief digital officer fit into retail’s executive team?"


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David Naumann
BrainTrust

The chief digital officer (CDO) is still a new role for most organizations and not even considered by some companies. Where the CDO role reports depends on the stage of digital evolution of the company. However I see this role as being as important as all the other CXO roles and to be successful, this person will have to impact all areas of the organization. Therefore they should probably report to the CEO.

Shep Hyken
BrainTrust

The CDO role is as much about the customer strategy as it is about integrating digital technology into the organization. They balance the organization’s process with customer experience. The latter is influenced by the customers’ data and feedback. CDOs must work with IT, marketing, sales and customer support.

Gene Detroyer
BrainTrust

I could not agree more: “…chief digital officers [CTO, CIO, call them what you want] backed by strong mandates and executive support, could produce significant operational improvement. Deloitte wrote in the study, ‘The rate and scope of digital transformations are highly individualized to each organization, and it may take months or even years to transform.'” Add to that customer connection and you have a winner.

Great care must be taken for this position. The individual must be skilled in every aspect of the business, operations, marketing, logistics, inventory, manufacturing and customer connection. In essence a jack of all trades that lets competent people underneath being solutions. That person doesn’t even have to be skilled in technology, just must understand what it can bring to the company.

More than ever, the idea that companies are siloed into functional areas is a dead end for the future.

Di Di Chan
BrainTrust

The future of retail is a hybrid online-offline model. When Alibaba and Amazon, the e-giants of the East and West, started competing offline, they validated a wave of digital upgrades to the physical retail world. Chief digital officers will play a significant role in facilitating the digitizing and “futureproofing” of existing retail stores.

Suresh Chaganti
BrainTrust

Chief Digital Officer, Chief Data Officer, Chief Analytics Officer, and Chief Information Officer are all overlapping roles. Organization design is very critical. Without that, there are too many cooks in the kitchen, and too many things will fall through the cracks.

It is important to remember that all these roles, including Chief Digital Officer, are enterprise-wide. It would be a huge mistake to have such roles report to a specific function such as Marketing. People in these roles need to have strong business acumen, understanding of their domain, and political savvy to navigate matrix organizations across various functions. It is not easy, and that is the reason successful organizations are few and far between.

Bob Amster
BrainTrust

I fear that I don’t even like the title, let alone know what this officer is supposed to do. The title is considerably more nebulous than for example chief financial officer, or chief operating officer. We know what those officers do. There is a term seldom used anymore; the general merchandise manager. What is that officer called today? It is easy to identify “finance,” “merchandise,” and “operations” (COO), but what is “digital”? Is it a thing or a concept? Until we agree on a definition, or change its name, we may be talking about different things without realizing it.

Lisa Goller
BrainTrust

Oh yes. A changing CDO role mirrors how digital has evolved from a retail nice-to-have to a non-negotiable must-have. Brands that invested in digital before the pandemic (Lululemon, Sephora, Nike) emerged as well-prepared winners.

Now CDOs lead as strategists to fuel unified commerce. They smash silos among functions and retail channels to improve productivity, minimize costs and wow shoppers. Since they’re in charge of growth, more CDOs now turn to proven best practices for a seamless digital experience that builds trust and sales.

Jeff Sward
BrainTrust

The key word in the article is “intertwined.” Digital is not a silo unto its own, it’s how the silos are connected and mesh — or don’t. From product development to store ops to e-commerce to final delivery digital skills and execution can make or break the business’s efficiency. So it’s not a function of where it reports, it’s a function if how well it helps integrate and streamline all the business functions. And that involves a very large dose of old-fashioned human skills.

Chuck Ehredt
BrainTrust

I wrote a thesis on “The Organizational Maverick” nearly 40 years ago – about the person who floated freely across an organization to put teams together to solve problems or pursue opportunities – kind of like the hero cowboy in mythical stories. The CDO is part this and part CX but, now that most digital channels embrace best practices, there is diminishing return on further digital CX improvements. For that reason, the CX function now should be pushed out into every customer-facing department to ensure all functions deliver a consistent customer experience based on the overall business strategy.

It is kind of for this reason that the role is immensely important and needs to be given the mandate to break down traditional silos and fiefdoms that are holding companies back from enhancing the value customers receive across every customer journey.

Gary Sankary
BrainTrust
This role, at the moment anyway, should be about helping their organizations understand how they can best leverage innovation and technology in a couple ways: To help their organization quickly assess and react to changing customer behaviors. The pandemic has exponentially accelerated consumer adoption of unified commerce capabilities. Providing leadership to accelerate the organizations’ adoption of the right technology to support their customers, quickly, is critical. Provide their organizations with the right data and insights, curated and presented in a format that’s usable by the team members who are making the decisions and executing the strategies that drive business. I still see organizations unable to find the right insights from their massive data investments . Focus on those technologies and capabilities that extend their value proposition and resonate with their customers. Not every e-commerce capability is right for every customer. A CDO should be able to connect strategy, value prop and technology to help their organizations make the right investments. In summary, help the organization move more quickly. One of my old CEOs used give… Read more »
Gene Detroyer
BrainTrust

Gary, I agree with everything you write except for one word, “helping.” I would replace that with “leading.”

Brandon Rael
BrainTrust

The chief digital officer (CDO) role has evolved significantly over the past several years. With the convergence of the physical and digital commerce worlds, it is an absolute necessity to give the CDO a seat at the executive table. Especially as so many retail strategies are centered around the digital experience for the consumers and the associates who need to help enable the digital organizational transformations.

The great acceleration brought about by COVID-19 has required retailers to rapidly shift their operating models to a digital-first strategy. This also requires that a customer-focused digital strategy be embedded across all areas of the company, including merchandising, pricing, promotions, social media, supply chain, store operations, etc.

An outstanding digital experience needs a dynamic leader to lead these organizations through these turbulent times and establish a sustainable and continuously improving digital strategy.

Perry Kramer
BrainTrust

The CDO role and who they report to will vary across retail brands based on their tolerance for risk and organizations’ capacity for change. To be successful they need to have enterprise level governance and influence. Additionally, I agree that the CDO must have strong and reliable data to make decisions with. The chief data officer title may be new, but the role has existed in most tier 1 and 2 organizations for a long time. The role is evolving in that it used to be about accuracy and availability and looking back at data. Now it needs to add AI and ML to those skills so that the data team provides the chief digital officer forward visibility and the ability to quickly measure success and modify innovation without waiting months to understand new initiatives’ impacts.

Lee Peterson
BrainTrust

Given that the customer now thinks “digital first” for not only retail, but for everything else, it’s common sense 101 that business organizations should follow suit. Nothing should happen, IMO, without the CDO being involved — nothing. This is NOT a trend, and for those who think stores are the most important element of retail, wake up, it’s mid-day and you just slept through the most transformational period in U.S. retail history. It’s a digital-first world, for customers and for us, and the CDO should be as close to the CEO as possible and, one day soon, the next CEO.

Cynthia Holcomb
BrainTrust

Unlike startups and innovators, many C-suite officials rose through the ranks, without having any first-hand knowledge of overseeing any digital innovation in the components of their businesses. C-suite is as siloed from innovation as is an entry-level employee. The politics, de-facto gatekeepers, and corporate inertia solidly underpin the deadly serious platform of the “status quo.” Truly those brave souls brought in to be the first or second chief digital officer are more likely to fail than execute any meaningful digital innovation within a corporate organization.

Human nature is human nature. Pretending otherwise is a fatal flaw hindering corporate digital innovation. Hence Deloitte concluded in its study, “The rate and scope of digital transformations are highly individualized to each organization, and it may take months or even years to transform.”

Gene Detroyer
BrainTrust

Excellent comment!

Patricia Vekich Waldron
Staff

A CDO has critical skills and responsibilities that span multiple functions in a retail or brand organization. They need a seat at the big table to be effective.

Michelle Collins
Guest

Welcome to the age of Chief Digital Identity Officer which is the partner of or evolution of the Chief Digital Officer. Technology is now a core part of determining how manufacturing and sourcing translates to sustainability practices. Likewise, technology is now interwoven with digital threads that can be sewn into fabrics which creates a new world of personalized consumer experiences.

James Tenser
BrainTrust

Is anybody else here in this forum growing weary from C-fatigue?

Of course retail organizations must elevate digital transformation as a crucial strategic activity. Every functional area of the business is affected — not just tech and marketing.
Handled the wrong way, designating a C-level executive could make internal silos more impenetrable. As Suresh and Gary wisely point out, retail enterprises must consider how to evolve organizational design and ensure that its initiatives add more value, not just more complexity.

Ananda Chakravarty
BrainTrust

Great to take another look at the CDO. The CDO and their role usually shifts with the adjustment of digital maturity. Every department in a modern company has digital, and the CDO needs to work cross functionally to achieve goals at the Executive, Marketing or Technology levels. The more mature a company is digitally, the more the CDO influences. There are the specialized roles with boundaries as suggested by Deloitte, but this is a consequence of the current fit of the company in the digital spectrum. Take a look at this article from a couple of years back.

Rachelle King
BrainTrust

If the role of the chief digital officer has not changed or evolved over this last year then the company is not keeping up with the accelerated pace of digital commerce. Many retailers are still trying to define their digital strategy. Undoubtedly, it’s evolving weekly, if not daily. The chief digital officer can play a critical role in connecting commerce throughout the organization, driving out inefficiencies and optimizing integration. The key is to hire smartly and break down internal silos that often diminish full potential of this role.

Yogesh Kulkarni
BrainTrust
Yogesh Kulkarni
Chief Operating Officer, Antuit.ai
2 months 11 days ago

Retailers got dragged into a very fast paced digital transformation during COVID-19 as customers changed what they bought and, most importantly, how they bought. Leaving aside a few forward-looking retailers, most of the retailers weren’t ready for their online sales to reach 30 percent to 40 percent of the revenues or to support curbside deliveries or supply chain readiness for pick/pack and ship for online deliveries. Most retailers have to transform rapidly and some of this transformation is going to need them to break the silos of e-commerce vs. store teams. Also, for most of the retailers, it is their IT landscape, which is very much store-centric rather than customer-centric. That will get in the way of rapid transformation.

Casey Craig
BrainTrust

The Chief Digital Officer needs to sit at the intersection of technology and business. The CDO is both an innovator and a disruptor who can lead the retailer through digital transformation. As shoppers’ expectations around a personalized shopping experience continue to evolve and digital innovation accelerates, the CDO role is integral to keeping up with that rapid rate of change while not overlooking the needs of the business. In order to make an impact, it’s important that s/he reports directly to the CEO in order to influence strategy, operations, and technology.

wpDiscuz
Braintrust
"Chief digital officers will play a significant role in facilitating the digitizing and 'futureproofing' of existing retail stores."
"If the role of the chief digital officer has not changed or evolved over this last year then the company is not keeping up with the accelerated pace of digital commerce."
"Given that the customer now thinks “digital first” for not only retail, but for everything else, it’s common sense 101 that business organizations should follow suit."

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