EI Insight Breakfast: The Rise of the CDO

EI Advisory’s Insight Breakfast series launched on 5th July 2016, gathering a group of B2B marketers to share insights on the rising role of the CDO.

- The session was led by David Mathison, CEO of the CDO Club/CDO Summit.


From CIO, to CTO, to CDO

30 years ago, the term CIO was unheard of – the role became prevalent as organisations realised the strategic value of infrastructure, and the CTO role arose a decade later. Following this, the rise of the CDO occurred as companies and CEOs realized that strategic value now lies in data, insights and analytics. Many consider data to be a company’s strongest strategic asset, and as a result, Chief Data and Chief Digital Officer roles have been on the rise. Hybrid titles, such as Chief Digital and Marketing Officers, or Chief Digital and Information Officers, are also on the rise.

The rise of the CDO

Since 2007, the number of Chief Digital Officers hired globally has doubled each year. Now, there are over 2000, and this figure is expected to keep rising. Chief Data Officer hires have also increased, although not at this level.

The CDO to CEO transition – digital natives are next in line to run the show

Not only are firms creating Chief Digital Officer roles, they are also promoting them to the top job. In 2015, 11 CDOs made the transition to CEO, including Jim Mullen, former CDO and now CEO of Ladbrokes, and Paul Shetler, former CDO of Government Digital Service and now CEO of AU Digital Transformation. Leading digital transformation now paves the way to leading the company; in the words of David Mathison “digital natives are next in line to run the show.”

CDOs as influencers in an era of digital disruption

Digital disruption is hitting every industry, and in many cases has led to entire companies disappearing from the map, take Tower Records and Blockbuster, for instance. Hospitality and travel have been shaken up by disruptive companies like Airbnb and Uber, and the rise of the empowered consumer has played a massive part in this. In fact, as David Mathison says, “we, as consumers, are the most disruptive force.”

As a result of digital disruption, the role of the CDO has shifted from understanding digital to ‘doing’ digital: taking a more active approach. So, the ‘rise of the CDO’ refers both to the increasing number of CDOs being created, and the rising role of the CDO as a decision maker and corporate strategist. This is reflected in the positions that CDOs hold in addition to their main role. For instance, Starbucks’ CDO Adam Brotman was recently appointed to the Board of Directors at Neiman Marcus – an influential role outside the food and beverage sector.

What is the tenure of the CDO?

It is difficult to determine the longevity of the CDO role, but on average it seems to be 3-6 years. The ones who transition between roles quickly or don’t keep abreast of digital transformation don’t last. For example, former CEO of Rolling Stone Jann Wenner had announced that the magazine would never embrace the iPad – his tenure as CEO lasted less than a year. Others have been successful in maintaining their position as CDO and driving their business forward. A good example is Adam Brotman, who has been global CDO of Starbucks for over 7 years.

The challenges of the CDO

The biggest challenge is keeping abreast of digital transformation and driving a data-driven culture based on insights and analytics, so that you don’t end up with data silos. To overcome this, companies have to understand the plethora of new opportunities in the marketplace. It is also crucial to align digital and data strategy with overall corporate strategy.

The tenure of the CDO is another challenge in some cases, as companies may appoint a CDO with specific goals in mind. Once those goals are achieved, and higher targets are set, the company may need to bring in a new CDO to achieve them.

Another challenge faced by newly appointed CDOs is that they have more people reporting into them. However, while it is important to manage those reporting directly to them, CDOs themselves need to be reporting to the CEO, and CEOs must be reminded of how important the CDO role is. After all, the CDOs that have been most successful to date are the ones who directly report to (and sometimes replace) their CEO.

Finally, the shortage of data & digital talent is a challenge that affects CDOs and the wider business, as the demand increases for people who have skills and knowledge in behaviour psychology and marketing, but also in analytics and insight.

The ultimate leader

CDOs are corporate strategists who actively drive business growth, and their influence should not be underestimated. David Mathison predicts that we will next see a significant rise of the Chief Analytics Officer, and that the ultimate leader will combine the Chief Data, Analytics and Digital Officer roles.