Ashley Friedlein: Chief digital officers are still hot property and marketers are ideal for the job

The Cabinet Office’s executive director of digital Mike Bracken recently announced his resignation. He had been leading the digital transformation of the UK government through the Government Digital Service (GDS), earning a CBE among other plaudits for his work. His new challenge is joining the executive board of the Co-operative Group as chief digital officer (CDO).

Two years ago I argued why a chief digital officer is a bad idea, provoking some heated debate. Bracken’s move has made me reassess my position. In the last few weeks, I have spoken to four CDOs of sizeable businesses to learn more about the role and what it means for the future of digital, marketing and business in general. So what have I learned?

For starters, CDOs are hot property. According to the CDO Club salaries  range from  $89,000 (£58,000) to $600,000 (£400,000), with the median falling between $250,000 (£160,000) and $300,000 (£195,000). That means CDOs are paid more than CMOs, where top earnings are around £160,000, according to Marketing Week’s 2015 Salary Survey. There are more than a thousand CDOs globally; the number has doubled every year for the past few years. In 2014, Gartner predicted that 25% of businesses would have a CDO by the end of 2015.

There appear to be two types of CDOs. First, there is what I call  the ‘ambassador CDO’. Their main role is to be an evangelist for digital across the business and to inspire, educate and inform.  This is typically a role with few management responsibilities.  The position exists in larger, often multinational companies (turnover £1bn and over), where the most senior members  can’t quite relinquish their power but feel the need to parade  digital through the corporate corridors.

The second type is the ‘transformer CDO’. This breed has real power and most are set on transforming the entire business on their journey to becoming CEO.

So what are the capabilities required of the transformer CDO? The words that come up most are leadership, vision, customer-centricity, change, transformation, innovation, disruption, tech, data, culture, agile, collaboration, communication and building buy-in. Intriguingly, the word ‘digital’ rarely comes up.  The remit of a transformer CDO is typically broader than  a CMO. The CDO has a more complete view of the customer experience across touchpoints beyond marketing to include  sales and service. The CDO often controls product as well as marketing. In fact, the transformer CDO is almost synonymous with a chief customer officer.

If you are planning to hire a CDO, here are four things to bear in mind:

• Know the difference between an ambassador CDO and transformer CDO and be clear on which you are hiring.
• If you are hiring a transformer CDO, you should acknowledge that you are hiring a strong contender for the successor to  the CEO. You should be aware, of course, of the sensitivities of existing board members or senior management if this is made explicit.
• If you hire a transformer CDO, it will be difficult for this role to co-exist happily for long with a CMO. It is better to have a head of marketing who reports to the CDO.
• Realise that the remit of a transformer CDO is not just ‘vertical’ down through the organisation, but ‘horizontal’. Digital will permeate every single area of the business, across technology, data, culture, people, process and strategy. Over time digital will need to become part of the company’s DNA.

The CDO is a very exciting role. And it is a role that marketers can take up. It will, however, be very difficult for a CMO and CDO to work together unless the CDO is an ambassadorial role only. So if marketers do not step up, they may find their new boss is a ‘digital’ executive, albeit one whose main agenda is not digital per se but customer-centricity and business transformation more broadly.

• Want to know more about how digital is transforming brands? The digital transformation stage at The Festival of Marketing in November will see leading thinkers offer strategic advice and insight on digital leadership and frameworks. For more information and to get tickets go to www.festivalofmarketing.com.