Slideshow 20 best practices of top chief digital officers

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  • March 16 2018, 5:14am EDT
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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.

Great digital leaders bridge business and technology

“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. They should blend strategy, governance and execution. Savvy digital leaders split their time between defining and communicating strategy, governing activities and managing execution. People skills are paramount. Digital transformation isn’t a technology problem, it’s a cultural shift. Successful digital leaders are change agents, adept at softer skills like communication and influence.”

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Digital leaders blend vision and execution

“With 58 percent of firms in the midst of digital transformation, ‘digital’ is part of your firm’s vocabulary. Yet many business and technology leaders still struggle to define exactly what ‘digital’ means to their firm,” the authors note. “Is it social media? Cloud? eCommerce? It’s these and more. Digital transformation must encompass digital experience, digital operations, digital ecosystems and digital innovation. Expectations for senior leaders are changing. As a digital leader, you must change, too. 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.”

Strategy: Articulate a compeling vision of how digital transforms your business

“As a digital business leader, it’s your job to translate an executive mandate (i.e., your business strategy) into action,” the authors stress. “Some CEOs can articulate a coherent and detailed digital vision. Most can’t, and that’s where you come 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 no longer means just eCommerce,” the authors explain. “Even retail eCommerce leaders, like Bloomingdale’s global vice president of eCommerce Mary Ransom, 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.”

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Align operations to experience

“Sustainable, scalable innovation occurs at the intersection of customer experience and operations,” the authors write. “Savvy digital business leaders reach beyond the boundaries of the digital team to engage operations functions such as supply chain or customer service. Stephen Dullenty, senior future propositions manager with Aviva, connected teams like product management, experience design and underwriting to create a vision for the firm’s pay-as-you-go motor insurance, Aviva Drive.”

Orchestrate an ecosystem-driven business

“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. Alibaba partners prolifically with firms like Barclays, BNP Paribas, InterContinental Hotels Group, Marriott International and Uber to rapidly scale its global reach. A true example of a platform-enabled, ecosystem-driven business, it posted 55 percent year-over-year revenue growth in 2016.”

Drive innovation

“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. Programs like Adobe’s Kickbox help digital business leaders think like VCs and fast-track ideas with a pragmatic framework for innovation governance. Christina Scott, former CIO at the Financial Times, removed all senior managers from project meetings to encourage faster, more customer-centric decision making.”

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Governance: engage stakeholders at all levels

“Successful digital leaders know that communication, alignment and flexibility are the keys to their success,” the authors write. “Rigid governance frameworks don’t engender collaboration or drive pace. Instead, 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.”

Evangelize the disruptive potential of digital

“Successful digital leaders make digital initiatives resonate with firms and employees,” the authors explain. “Jack Doxey, vice president of digital and eCommerce at Autodesk, made digital relevant to everyone: ‘In a big company, you’ll never win if you don’t get resources behind an effort. So we made digital a part of everyone’s goals.’ Mike Proulx, chief digital officer (CDO) at Hill Holliday, recommends that digital leaders ‘identify the early wins; it’ll build trust and credibility early on, and through that, you’ll have an easier time getting buy-in on larger initiatives.”

Unite the C-suite around the digital agenda

“Proulx said every member of Hill Holliday’s C-suite contributes to the overall digital agenda,” the authors explain. “This egoless attitude, treating transformation as a joint effort, comes from a closely integrated C-suite team. 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.”

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Align teams behind a mix of customerr-centric and financial metrics

“Digital leaders define success by both customer-centric metrics and hard financial targets,” the authors stress. “Jonathan Newman, CDO at Office Depot Europe, notes that alignment metrics are critical and cites the importance of aligning marketing and sales activities on revenue and margin metrics. Russell Villemez, head of technology strategy at Dialexa, notes: ‘Recognize how to shave costs. If today 80 percent of your budget is spent on maintaining, that leaves 20 percent for innovating.”

Instill a culture of flexibility

“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. “Duncan Hammond, former delivery director at The Guardian, defines OKRs — objectives and key results — that link cross-functional activity to the company strategy and flex on a quarterly basis.”

Execution: Embrace operational tactics to drive tangible results

“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. “While digital business leaders must focus on strategy and executive influence, that doesn’t absolve them of operational duties.”

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Embed digital execution into line-of-business teams

“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. Andy Harding, House of Fraser’s former chief customer officer, created a digital product team responsible for developing digital experiences and a multichannel trading team responsible for sales and service across all touchpoints.”

Tear up the delivery notebook

“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. “Nike teamed up with AKQA to create a connected fitness community that delivers tailored workouts to customers. Accenture and McKinsey run digital labs to help clients create new experiences and business ventures. Salesforce Ignite aims to help digital leaders uncover challenges and turn ideas into a reality.”

Connect business, marketing and technology

“Digital business leaders must be multilingual, speaking the language of business, marketing and technology to drive collaboration, and generate credibility,” the authors say. “Doxey notes: ‘Digital leaders need to help other functions understand their role in digital. If people don’t understand how they plug into digital transformation, they won’t be motivated.’ Villemez echoed: ‘Digital business leaders must know how their business makes a profit and how each function contributes to that.”

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Champion, and invest in, customer insight initiatives

“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? Currently, 45 percent of firms use techniques like ethnographic research, human-centered design, and design thinking to fully understand customer needs. John Lewis’ director of online product, Sienna Veit, took her team into the firm’s store in Cambridge, UK, to co-create a mobile app for store operations."

Business is digital, and digital is people

“As a digital business leader, your role has changed and change is far from over,” the authors caution. “Digital isn’t mobile, or Alexa, or cloud or omnichannel. These technologies and strategies are aspects of what it means to be a digital business, but the reality is digital is all about people. 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. Tomorrow’s business leaders can’t devolve technology decisions to their IT departments.”

Drop the D

“Our prediction will come true, we’ll drop the digital “D” and call it what it is: business,” the authors write. “It will be a rocky ride. 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.”

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Your personal brand will define your leadership credentials

“Digital will make leadership as transparent as B2C business is fast becoming,” the authors say. “Glassdoor reviews, real-time pulse surveys, AI-powered executive search, your social presence in the industry, and more are bringing age of the customer-like disruption to recruitment, retention and the art of team-building and leadership. Your digital footprint will define your leadership potential, and will make or break your ability to hire great employees and secure your next position.”

Business leadership is your next career move

“As digital becomes pervasive, we’ll see a further bifurcation of the legacy eBusiness role,” the authors conclude. “You’ll be forced to decide — move into a line-of-business role and become an operator or stay central and be a strategist. Operators will own customer journeys, orchestrating services across an increasing web of API-connected, blockchain-powered partners. 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.”