Research Reveals Seven Habits of Highly Effective Chief Digital Officers

The Apigee Institute presents a model for the successful CDO: networking with innovators and adaptability are key, while over-emphasis on tech skills could lead to failure

Nov. 5, 2013 – Apigee today released the findings of “Keys to Successful Digital Transformation,” a survey of over 300 executives in companies with over $500M in annual revenue. Conducted by the Apigee Institute, a research and strategy organization dedicated to helping Global 2000 companies extend their leadership in today's app economy, the survey focused on executive leadership of digital transformation and revealed essential traits for the emerging role of Chief Digital Officer (CDO).

“As mobile technology and data analytics completely reshape the business landscape, building a truly digital business DNA is an imperative for survival in today’s competitive app economy. Many companies are seeking CDOs to lead this enterprise-wide transformation,” said Bryan Kirschner, director of the Apigee Institute. “In fact, our research reveals that 83 percent of top digitally performing companies have an explicitly and formally appointed digital leader. As the role evolves, this study offers insights into the traits and habits that are the most likely indicators of success. Only by finding the right kind of digital leader can companies turn ‘digital transformation’ from theory into reality.”

A new Apigee Institute report published today called, “Three Keys to Digital Transformation,” outlines the results of its recent survey, including the seven habits the findings suggest effective CDOs should have. These habits were determined by an analysis of the traits that correlated to both market success and to perceived internal success at digital transformation.

The 7 Habits of Highly Effective CDOs

1. Earn company-wide commitment – Working systematically to earn the buy-in of company and department leaders is a key role for successful digital leaders. 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 – The highly effective digital transformation leader develops a short, compelling mission statement that can serve as a guiding light for the whole company.  Given the speed and iterative nature of digital transformation, logistics and tactics may be complex.  However the vision and strategy should not be hard to understand. 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 leaders at these companies are described as “flexible/adaptable.”

4. Connect with experts – A successful transformation leader will turn to their professional community, industry and academia to build a strong network of innovators and experts across domains. Roughly seven out of 10 executives at digital leaders say their digital transformation leader 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– Digital transformation affects every aspect of doing business, and the leader who succeeds must be able to explain, manage, and promote transformation across the company. Companies that implemented company-wide initiatives more 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 leaders are described as managing across departments well, 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. Leaders should be fluent in IT, marketing, strategy and finance in order to create the organizational alignment that is necessary to deliver digital experiences to customers, partners, and employees. More importantly, 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 digital leaders are identified as able to “simplify complexity” almost three times as frequently as at poorer digital performers.

7. Strive for tangible goals – In order to take advantage of specific new opportunities for growth, the CDO should identify the tangible goals of digital projects -- whether it’s a new revenue stream, higher efficiency, quicker time to market or something else. Those who have the strongest capabilities 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.

Surprising Findings: What is Less Important for a CDO

The survey also revealed some surprising findings about which traits are far less likely to be characteristic of successful digital leaders. The analysis shows that being tech savvy, a risk taker, and having intellectual curiosity do not necessarily correlate to the highest level of success as a digital transformation leader. This suggests that organizations seeking a successful CDO may not want to over-focus on these traits, but rather look for individuals who are visionary, persuasive, adaptable and have a strong network.

Learn More about the Successful CDO at the “I love APIs” Conference

This announcement was made at the “I love APIs” conference in San Francisco. The event, which runs through Nov. 6, brings together business and technology leaders who are driving innovation and delivering real business results across every industry in today's digital world.

Apigee Institute’s Kirschner, along with Haydn Shaughnessy from UC Irvine, John Elliot from Accenture and Michael Chai from Pearson, will discuss this survey and how to achieve digital success at a session titled, “Decision Making for the Digital Transformation” on Wed., Nov. 6 at 2pm. Register here today to attend “I love APIs.”

Survey Methodology

The “Keys to Successful Digital Transformation” survey was conducted by the Apigee Institute from September 26 to October 7, 2013.  The survey invited 321 business executives in companies with more than $500M in annual revenue to assess leadership in digital transformation.

The Apigee Institute has also released a self-assessment tool that allows business leaders to gauge where they stand on the key criteria for digital transformation success.  To access this tool, go to Apigee Institute on the Apigee website.

About Apigee Institute

The Apigee Institute includes executives in Global 2000 corporations, academic researchers and domain experts who collaboratively shape its research agenda and participate in building a body of empirical data as a shared resource. Membership is by invitation. For more information, go to http://pages.apigee.com/institute.html. To request membership, please email institute@apigee.com.

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