20 best practices of top chief digital officers

A growing number of organizations are embracing digital transformation in the hope of improving business processes, getting closer to their customers and boosting the bottom line. In many cases that effort calls for the appointment of a chief digital officer–someone who is as adept at business strategy and communication skills as they are at software capabilities. In the report “The Key Characteristics of Great Business Leaders: How Savvy Digital Business Leaders Balance Strategy, Governance and Execution,” Forrester Research analyst Martin Gill takes a look at what goes into the making of a top digital transformation leader. The study is coauthored by Stephen Powers, Benjamin Ensor, Fiona Swerdlow, Danielle Jessee, Benjamin Arnold, Stephanie Sullivan and Andrew Reese.

“Successful digital leaders are part business strategist and part technology evangelist,” the authors write. “They must speak the language of both, unlocking the opportunity technology brings." Success as a CDO requires a focus on strategy, governance and execution. Strong people skills are critical, since digital transformation is a cultural shift, not a a technology problem.

“Digital transformation must encompass digital experience, digital operations, digital ecosystems and digital innovation," the authors write. "Digital business leaders must work across all four of these dimensions by focusing on three key activities:

1. Strategy: Articulate a compelling strategic vision of how digital transforms your business.
2. Governance: Engage stakeholders at all levels.
3. Execution: Embrace practical tactics to drive tangible results.”

“As a digital business leader, it’s your job to translate an executive mandate (i.e., your business strategy) into action,” the authors stress. Most CEOs can't effectively communicate what is needed in a digital transformation effort, and that’s where the CDO comes in. "Even if your CEO has taken on responsibility for leading your digital transformation, she’ll need help grounding her vision in the detail of what’s possible at your firm. Work with your executive peers and build a digital vision.”

Define how your firm's digital experiences win, serve and retain customers

Digital business is much more than just ecommerce, the authors explain. “Even retail eCommerce leaders ... must help their peers understand how digital touchpoints drive brick-and-mortar sales through initiatives like click-and-collect. For Ransom, a data-driven approach is vital to articulating the true impact of digital experience on Bloomingdale’s customers.”

“Savvy digital business leaders reach beyond the boundaries of the digital team to engage operations functions such as supply chain or customer service," the authors stress.

“Digital businesses thrive by extending reach through open, scalable ecosystems,” the authors explain. “Connected business models, like marketplaces or open APIs, often feel risky to traditional executives, so digital business leaders must articulate the shift."

“A digital vision should frame innovation, not constrain it,” the authors stress. “Often, the best ideas come not from your executive team, but from employees closest to the customer."

“Successful digital leaders know that communication, alignment and flexibility are the keys to their success,” the authors write. “Digital business leaders embrace a common set of characteristics and behaviors that help them build the knowledge and relationships they need to drive transformation and adapt to rapidly changing customer, competitive, and regulatory pressures.”

“Successful digital leaders make digital initiatives resonate with firms and employees,” the authors explain.

"Monthly check-ins with senior stakeholders help highlight current digital initiatives, giving each function a forum to voice their priorities and hardships. This creates opportunities for deeper collaboration,” the authors explain.

“Digital leaders define success by both customer-centric metrics and hard financial targets,” the authors stress.

“Digital business leaders know when an investment isn’t delivering, and they’re comfortable with cutting losses and pivoting to a new initiative,” the authors say.

“With a bold vision and the right behaviors and relationships in place, digital business leaders must concentrate on driving action, and that should happen as close to the customer as possible,” the authors explain.

“Gone are the days of a single, central digital team and an “eCommerce P&L,” the authors write. “As departments demand more control, digital business leaders must embed sales and service execution into brand and market teams."

“Thirty-four percent of firms that are restructuring to become more agile report they ‘partner with startups and business incubators to bring innovation to our organization,” the authors write.

“Digital business leaders must be multilingual, speaking the language of business, marketing and technology to drive collaboration, and generate credibility,” the authors say.

“Customer insight must drive every facet and motive of transformation,” the authors stress. “Digital business leaders must constantly ask themselves “How will this allow us to better serve our customers?"

"Digital leadership is about driving a cultural and behavioral shift toward a customer-centric, outside-in, fast, connected way of doing business where technology isn’t an afterthought, but a catalyst for opportunity," the authors stress. "Tomorrow’s business leaders can’t devolve technology decisions to their IT departments.”

Drop the D

"Incumbent senior leaders will continue to resist change, cleaving to the belief that departmental success is a proxy for their personal worth. Service providers, dollar signs in their eyes, will flock to the digital transformation banner in the belief that’s what clients are budgeting for. But a new breed of leader, formed in the crucible of business and technology convergence, will emerge,” the authors say.

“Digital will make leadership as transparent as B2C business is fast becoming,” the authors say. “Your digital footprint will define your leadership potential, and will make or break your ability to hire great employees and secure your next position.”

“As digital becomes pervasive, we’ll see a further bifurcation of the legacy eBusiness role,” the authors conclude. “Strategists will set standards, foster collaboration and fuel innovation. Well-rounded, ambitious digital business leaders will step up to be the next generation of business leaders — CEOs, chief operating officers and business strategists.”