The last several years of technology innovation are leading to a split in the IT world. There’s the traditional IT space that focuses on infrastructure, networking, and compliance; and there’s the emerging field of digital tools that includes things like mobile devices, social media and location-based technology. With the application of digital technologies, an executive leadership position is also emerging — one that’s part technology, part marketing, and part business. The role is chief digital officer, or CDO, and for technology executives, it could be a blessing or a curse.
Chief digitals are cropping up in nearly every sector, from media and publishing to healthcare, retail and financial services. Market research from the CDO Club — the world’s largest membership organization for chief digital officers — indicates that the number of global CDO positions is doubling each year. In 2013, there were 500 CDOs and the Club conservatively predicts there will be 1,000 positions by the end of this year.
In the hospitality space, there have been several major appointments in recent months. Last October, McDonald’s announced that the newly-created CDO role would be filled by Atif Rafiq, who has an extensive background in the financial and technology industries. Rafiq was brought on board to oversee McDonald’s global digital strategy. According to the company’s official statement, Rafiq will “focus on future growth in e-commerce, modernizing the restaurant experience and engaging with consumers across the digital landscape.” In June, Pizza Hut announced that Baron Concors, formerly Yum! Brands CIO, transitioned into the chief digital officer role.
“What’s really interesting, when you start looking at the CDO role, is where they come from,” says David Mathison, founder of the CDO Club and producer of the CDO Summit (www.cdosummit.com). “Many CDOs were previously presidents, CEOs and general managers — in the advertising sector, as many as 60%. They’re entrepreneurs and have had P&L responsibilities.” The position got its start in publishing and media companies. This trajectory matches McDonald’s Rafiq, who most recently was GM of Kindle Direct Publishing at Amazon.com and before that was both a general manager and a global strategy product lead for Yahoo.com’s Y! Local division.
Where’s the CIO in the mix?
Just because the pattern shows that most CDOs don’t come up the ranks from a senior technology leadership or CIO role, doesn’t mean they can’t. In fact Mathison sees the rise of the CDO position as a golden opportunity for technology professionals who want to get closer to — or ultimately aspire to be — the chief executive. “A lot of innovative IT executives have been dreaming of an opportunity like this, where they can get a budget and a headcount, and use technology to drive transformation in the business.”
At MGM Resorts International, the CDO position was created and filled in 2013 by John Bollen, previously the company’s VP of technology. Bollen now reports to the CMO but says the position is just as much about technology and business functions as it is about marketing. “Here’s the tricky thing about the CDO role. You have to have extensive business knowledge of the underlying IT systems and how they work to support the marketing function,” for example the features that a hotel might want in its customer touch points, be they mobile apps, IPTV, digital signage, or the website. Even bandwidth is still very much a part of Bollen’s realm. “WiFi is a touch point and part of the guest experience,” he says.
An executive can get all that knowledge from an IT role, says Bollen, “but you also have to have a flair for innovation and the communication skills to work with marketing to translate what they want into reality.” The traditional CIO, he says, doesn’t typically interface directly with marketing systems — rather their focus has been property systems. “CIOs have often waited for the business to give them the requirements they need to develop IT systems,” says Bollen. “CIOs have been responsible for business-to-business interactions. The CDO is responsible for business-to-consumer.”
If interfacing with the consumer isn’t of interest for a technology executive, Mathison believes there will still be a role for the CIO, but the future is uncertain. “There’s always going to be a need for the CIO because when disaster strikes or there’s a dramatic loss of data at the enterprise level, you’re not calling the chief digital officer.” Security, compliance, governance and disaster recovery will always need a vanguard. The risk is the extent to which these systems are going to be outsourced and/or transition to a cloud-based architecture. “The role of CIO isn’t going away any time soon, but be very careful because the more exciting points of technology are getting chewed up on the front end by the CDO, and on the back end, there’s a chief data officer who’s evolving to take over data, insight and analytics.”