Finding Leaders to Inspire and Direct In the Digital Age

September 23, 2016 – An explosive new recruiting mandate has been emerging for executive search consultants keen on offering innovative expertise to their clients and finding new avenues to growth: finding leaders who can inspire and direct companies in the digital age.

It is the latest directive to be placed in the lap of executive recruiters by companies eager to stay ahead of their rivals and, more importantly, to stay ahead of the rivals they can’t yet see. Of course, the convergence of the static world with one that is online – which digital leaders oversee with increasingly sophisticated strategies and state-of-the-art technologies – is nothing new.

An Entrepreneurial Shift

In fact, the top job of chief digital officer goes back at least more than a decade. What’s changed is the entrepreneurial shift taking place at companies which have lived in that static world for their entire, buttoned-up lives and the new ways in which they capture, manage and use data for non-technology purposes. As they rush to digitize their businesses, they are turning in droves to executive recruiters who are more than eager to help them cross the digital divide.

But organizations across the globe report they do not have a chief digital officer (CDO) to manage their digital transformation or digital strategy. According to a survey of 501 global business leaders conducted by IIC Partners Executive Search Worldwide, three out of four survey respondents (76 percent) said they did not have a CDO in place to own their digital transformation strategy.

Eighty percent of senior executives stated that they believe investment in digital transformation within their organization is very or extremely important to future success. In contrast, however, only a third of survey respondents said they plan to hire a CDO within the next two years.

Who Really Manages Digital Vision?

Companies that do not have a chief digital officer said the CEO, CIO and CMO roles serve as the primary leadership figures responsible for managing the vision and implementation of digital transformation, alongside their other responsibilities.

“Senior executives recognize the importance of investing in digital transformation for future success,” said Ruth Curran, managing partner of MERC Partners based in Dublin and global chair of IIC Partners. “However, as technology evolves and digital continues to disrupt business units and industries, a CEO who has primary oversight for this mandate will diminish their capacity to effectively manage the rest of the organization and lead their teams.”

Management of digital transformation is best directed by a devoted leader who can competently own and execute a comprehensive strategy, she noted.

The survey found that respondents were divided when asked which functional background best qualified an executive to fill the role of chief digital officer. Forty five percent of executives surveyed said the ideal CDO should have experience within the technology or IT function, while 43 percent said he or she should have a marketing or sales background.

“The schism we are seeing in the ideal functional background of a chief digital officer speaks to the hybrid nature of the role. He or she should possess an innate understanding of technology accompanied by a firm knowledge of employing digital transformation and strategy to support organizational growth,” said Christine Hayward, IIC Partners’ executive director. “This cross-functional skillset will drive continued innovation and programs across the enterprise from a central visionary perspective.”

The survey revealed the key responsibilities executives expect a chief digital officer to manage:

  • Ensuring digital assets work across business units;
  • Articulating the strategic vision to other leadership teams;
  • Championing increased value through use of digital transformation.

Top Five Skills When Hiring a CDO: 

  1. Ability to influence across an organization;
  1. Innovation (products / services / channels / markets);
  1. Experience with digital channels (web, mobile and social media);
  1. Process orientation (digitally streamline internal processes);
  1. A “Nimble Thinker” – able to predict trends and digital needs of business.

“The qualities sought after in a chief digital officer are rooted in the softer skills of management,” said Ms. Curran. “A successful CDO must exercise and exhibit persuasive leadership tactics to garner the buy-in and support of other senior leaders across the organization. Companies are not only looking for a candidate to identify valuable opportunities for digital transformation to work for the business, but lead through influence and instill confidence from other key stakeholders critical to its success.”

Hiring the Ideal CDO

Forty six percent of survey respondents reported they find their executive digital talent by partnering with executive search firms. Survey respondents were divided when asked which functional background serves a chief digital officer best: 43 percent reported marketing and 45 percent reported technology. Thirty one percent of survey respondents plan to hire a chief digital officer in the next two years.

Digital Influence 

Eighty seven percent of survey respondents said that digital transformation greatly informs and influences the strategic direction of a company’s future. One in three companies (34 percent) said they did not have the right structures or processes in place to leverage digital transformation. Another 80 percent deemed investment in digital transformation as critical to a company’s future success. Forty-nine percent of respondents scored their company a 7/10 or higher on digital transformation initiatives.

High Demand for CDOs

The chief digital officer position continues to be in demand and growing in influence within the C-suite. A search on LinkedIn of the title generated more than 17,000 results.

“New business and revenue models call for digital leadership and competence. When companies based on digital revenue and a low cost platform like Uber can rise from zero to billions within months, other heavy industries like GE or Kongsberg Maritime have to think differently in order to still be in business,” said Bendik Blindheim, practice group leader for IIC Partners’ technology, digital media and telecommunications practice group.

Yet finding digital leaders is not always an easy task. “There is no clear answer when it comes to a valid transformational digital leadership profile, and more important, an ideal functional profile of a CDO,” said Mr. Blindheim. “The functional profile however, is always a result of the company’s need for new strategic competence.”

Pathways to the CDO Post

“I strongly believe future CEOs will actually be the owners of the digital agenda,” Mr. Blindheim. If the business is transformed into a more digitally-driven enterprise, why should anyone else than the CEO be held accountable, he asks.

“We have seen CEOs of technology and software companies become CDO’s in larger corporations than the one they left. Besides that, we have witnessed the trend of hiring digital oriented CMO’s from technology companies into a CDO role,” Mr. Blindheim said. “The third path is professional services / consulting leaders or partners heading an information management service line. But for now, there is no ‘usual’ path.”

Not All Companies Have a CDO Onboard

“According to market data that I’ve reviewed, fewer than 25 percent of companies currently have a CDO on staff,” said Scott A. Scanlon, founding chairman and CEO of Greenwich-based Hunt Scanlon Media. “That deficiency, taken with the high turnover rates of chief digital officers and the digital specialists working in CDO ‘feeder’ positions, helps to explain why executive recruiters see this burgeoning field as their new sweet spot.”

A doubling in CDO salaries in the last 36 months, he added, has only further electrified the search industry: pay levels for the most sought after CDOs can top $600,000 a year, according to recent survey data from Hunt Scanlon.

Companies that now see most, if not all, things digital include world class brands in publishing, hospitality, consumer products, and academia: Nestle SA, L’Oreal, Disney, McDonald’s Corp, Condé Nast Entertainment, Starbucks, Universal Music Group, MGM Resorts, Toys R US, Office Max, BBC Worldwide, CVS, American Media Group, Simon & Schuster, Forbes Media, McGraw-Hill Education, Gannett Co., HarperCollins Publishers, and MIT, Harvard & Columbia Universities. Even the City of New York brought in its first chief digital officer. Joining these industry leaders are an immense number of small to mid-sized concerns eager to make digital a central part of their business strategy.

“Every company needs to go through a digital transformation if they haven’t already, but the problem is that most companies are unsure how to do it due to prohibitive costs or lack of expert resources,” said Michael Adler, a senior partner at Lionseye Group, a search firm specializing in placing digital transformation executives.

Mr. Adler suggested these companies either create a fund to invest in companies they can leverage or one day buy or develop an innovation lab to stay ahead of the technology curb. “Either way, they need to put someone in charge of digital decisions.”

Visionary Leaders

The search for digital leaders is a wonderful business for recruiters like Mr. Adler, said Mr. Scanlon. “This unique market segment illustrates the value executive search providers can bring to well-worn brands that have discovered their own limitations as they forecast where they need to be and to a host of companies that might be new to talent acquisition, like e-commerce startups.”

But the hunt for digital leaders is a complicated business. “CDOs are transformative figures and they can change the destiny of an entire company,” said Mr. Scanlon. “These are visionary leaders, yes, but more importantly, these leaders incubate new ideas and harness the scale of their companies – they are leading the biggest-ever migration in business. It is likely the current most challenging sector of executive recruiting. Finding the world’s most influential digital leaders is where we believe executive recruiters will prove their true value.”

Additional Reading: Check out what Carrie Pryor, managing partner of Greenwich Harbor Partners, has to say: ‘How to Build a Career In the Digital Age

Contributed by Dale M. Zupsansky, Managing Editor, Hunt Scanlon Media and Scott A. Scanlon, Editor-in-Chief, Hunt Scanlon Media

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