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The Seven Habits of Highly Effective CDOs

bkirschner
Nov 13, 2013

As mobile technology and data analytics completely reshape the business landscape, building digital business DNA is imperative for the survival in today’s app economy. Many companies are seeking out chief digital officers (CDOs) to lead this digital transformation.

It’s the right approach, according to Apigee Institute research. We found that 83% of top digitally performing companies have an explicitly appointed digital leader.

Our research also uncovered seven habits that highly effective CDOs should have. These habits were determined by an analysis of the traits that correlated to market success and to perceived internal success at digital transformation. 

1. Earn company-wide commitment: Among “digital leaders”—the companies doing better than average deploying apps, operating APIs, and using data analytics—83% have “explicitly and formally” named a person to lead digital transformation. Of these same companies, 79% report that digital projects are a company-wide priority.

2. Develop a digital strategy mission statement: Nearly all digital leaders (88%) believe that a vision for transformation has been well communicated—with more than a third strongly agreeing that they understand their company executives’ digital plans and strategy. In comparison, only 42% of the companies performing worse than average deploying apps, operating APIs, and using data analytics agree that their leadership communicates a transformation vision well; almost none (5%) strongly agree.

3. Embrace data-based experimentation: The effective CDO must be willing and able to adapt quickly and make decisions iteratively. Digital leaders are three times as likely to use experimentation as a decision-making criterion for investments, and almost 65% of digital transformation chiefs at these companies are described as “flexible/adaptable.” 

4. Connect with experts: Roughly seven out of 10 executives at digital leaders say their digital transformation chief has an especially strong network of business and technology innovators (rising to a full 81% of the very top digital performers).

5. Promote digital transformation across departments and functions: Enterprises that implemented company-wide initiatives longer than a year ago have already seen an impact on employees (73%), customers (80%), and their portfolio of products (77%); almost two-thirds of these businesses have seen impact in all three areas. Among digital leaders, 58% of their digital chiefs are described as managing well across departments, compared to only 23% of leaders at companies that are poorer digital performers.

6. Speak multiple business languages: A CDO must communicate with people across the company and understand the priorities of others. They should be able to boil down the essentials of a project in a way that makes sense to people throughout the company. Transformation leaders at top digital performers have the ability to “simplify complexity” almost three times as frequently as at poorer digital performers.

7. Strive for tangible goals: CDOs who are best at connecting digital investments directly to key enterprise performance indicators are better able achieve successful digital transformation—88% of those who perform highest on this metric are digital leaders.

 

The survey uncovered some surprising information, too. Being tech savvy, a risk taker, and intellectually curious doesn’t necessarily correlate to the highest level of success as a digital transformation leader. This suggests that organizations seeking a CDO shouldn’t focus too much on these traits. Rather, they should consider looking for individuals who are visionary, persuasive, adaptable, and have a strong network.

These findings, which were culled from a new Apigee Institute survey "Three Keys to Digital Transformation," were first presented at Apigee's recent I ♥ APIs conference. The Apigee Institute also released a self-assessment tool that lets business leaders guage where they stand on the key criteria for digital transformation success. The tool is available here.

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