Monday's Musings: The Rise Of The Digital Executives
Digital Leaders and Their Efforts Take a Front Seat in the Post-Pandemic Era
When the pandemic impacted businesses a year ago, most brands and enterprises scrambled to accelerate digital transformation efforts. These “digital” efforts ranged from rekindling digital channel projects to doubling down on digital channels to even accelerating subscription business models. Often led by CIO’s, CMO’s, CTO’s, and Chief Digital Officers, many successfully scrambled to shift channel revenue from physical to digital while dealing the impact of remote work delivery. These accomplishments accelerated five years of digital transformation in less than one year’s time.
As organizations now shift from pandemic burning platform to the post-pandemic reality, the “light” digital projects focused on digital channels will not be enough to sustain true digital initiatives. The simple monetization models will face intense competition. The lack of a digital business model will leave organizations exposed. In fact, digital leaders will have to invest in three key areas of true digital transformation to successfully emerge into the post-pandemic era. Organizations must invest in:
- Digital business models. Digital leaders must think hard about how their digital strategy will co-exist in a world of traditional business models. Leaders must determine where will their mix of financial investment and human capital reside.
- Digital monetization. Organizations must rethink monetization efforts across ad revenue, search revenues, goods, services, memberships and subscriptions. Selection of monetization model or models will be driven by business model decisions.
- Digital channels. While, websites, mobile apps, and chats played a key role in enabling pandemic CX, digital leaders must determine how investment dollars will be allocated in a post-pandemic world as hybrid models will dominate the landscape. Business models and monetization models will determine level of channel investment.
The Shift From CDO's To Digitally Enabled Leaders Is Happening Now
Consequently, who leads such initiatives going forward will be hotly contested. In fact, the role of the chief digital officer must be revisited given the uneven job description and responsibilities across different industries. To be honest, what a CDO does has depended on what industry has sought to create a role. In many cases, chief digital officers have served as CTO’s, others have served as CMO’s deploying a marketing tech strategy, and CIO’s who have had digital initiatives along with keeping the lights on in traditional IT have also served as a CDO. While each of these approaches have merit, this lack of clarity and consistency on what a CDO’s role should be has created some tension and mass confusion in board rooms and among executive leadership teams.
Over the next 12 to 18 months, almost every organization will have beefed up their digital leadership. The rush to anoint a Chief Digital Officer to centrally own all digital initiatives may no longer make sense given the adoption of digital inside organizations and the accelerated digital transformation experienced by leadership. What and how a Chief Digital Officer will be defined may no longer be that important. However, what digital leaders do will play a role.
To start with, expect every role inside an organization to take on digital initiatives. For example:
- Chief executive officers will beef up their direct reports and design for new digital business models, assess future partnerships for joint venture approaches, and create a digital culture that supports innovation and execution.
- Chief marketing officers will accelerate their digital presence, project their brand’s mission and purpose across all digital channels, apply account based strategies, improve personalization and relevance, and reduce customer acquisition costs.
- Chief service officers will improve incident to resolution response via digital channels, identify new monetization models for service, apply IOT models to deploy remote service capabilities.
- Chief customer officers will use digital channels to improve community and engagement efforts to improve customer retention, satisfaction, and loyalty.
- Chief revenue officers will design for new revenue optimization capabilities, build out digital monetization, apply machine learning and AI to dynamic pricing, improve account based strategies, and improve revenue per customer.
- Chief supply chain officers will use AI to capture data for demand signals, drive pricing optimization, improve S&OP efforts, create new distribution models, apply 3D printing, and reduce inventory costs.
- Chief information officers will bring their project execution expertise, improve the overall digital infrastructure and channels, design to support for digital monetization models, compete for data supremacy, and future proof architecture for new digital business models.
- Chief human resource officers will hire for digital artisans, train and reskill for right-brain and left-brain skills, enable competency based recruiting, create digital employee experiences, and build a digital culture
- Chief financial officers will apply new metrics such as active users, retention rate, customer satisfaction, customer acquisition costs, average revenue per user, profit per sale, market share growth, and reserve asset yield.
The Bottom Line: Digital Enabled CXO's Must Compete With Digital Giants
Digital giants are organizations that have built vast networks of users or devices, mastered how to disintermediate customer account control, deployed digital monetization at scale, competed for data supremacy, and developed a long term growth mind set. Notable examples include entities such as AirBnB, Alibaba, Amazon, Baidu, Coupang, Disney, DoorDash, Facebook, Gojek, Instacart, JD.com, Google, Microsoft, Netflix, Roblox, Tencent, Tesla, Uber, and Zillow in a wide variety of industries.
While Chief Digital Officers may still exist, the entire executive leadership team will grow digital skills as predicted in 2009 by Esteban Kolsky and myself.
The era of the standalone CDO driving all digital initiatives will transition to suites of leaders who have digital capabilities.
This transition to these digital leaders will prepare brands and enterprises to compete with the rise of the digital giants. A broad stable of digital leaders will prepare brands and enterprises to compete with the rise of the digital giants.
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