Chief Digital Officers Research Articles

Protagonists in digital transformation: The impact of chief digital officers on firms’ financial performance

Although many firms have started to appoint chief digital officers (CDOs) to lead enterprise-wide digital transformation, it is unclear what type of CDOs can really help improve firms’ financial performance. Analyzing the CDO appointments of 158 S&P 500 companies from 2002 to 2019, our research shows that CDO appointments do help improve forward-looking firm performance, measured in terms of Tobin's q. We further find that the performance improvement is more pronounced when the CDOs are externally hired (rather than internally promoted) and when they are generalists with overall responsibilities (rather than specialists focusing on an explicit functional area). Therefore, while it is important to appoint a dedicated CDO to lead the uncertain, challenging digital revolution and improve firm performance, the effectiveness of such an appointment is dependent on how the appointment is made. These findings provide important implications for future research on CDO and for firms to reap more benefits from their CDO appointments.

Chief Digital Officers and Environmental Performance: The Role of the Organizational Environment

Chief Digital Officers and Environmental Performance: The Role of the Organizational Environment

Chief Digital Officer and Organizational Creativity Toward Digitalization

Through the microfoundation lens, this article explores how dynamic capabilities (DCs) of Chief Digital Officers (CDOs) trigger digitalization and organizational creativity of 2124 small to medium enterprises (SMEs) across 39 different European countries. As a result, the significant DCs are substantive and adaptive capabilities, which are offering new solutions, seizing new opportunities, and coping with changes. Besides, those two DCs also assume a mediator role in triggering organizational creativity within SMEs. In terms of theoretical and managerial implications, threefold contributions are provided: the first one offers a fresh study on the digital transformation context of SMEs through a microfoundation perspective; the second emphasizes the crucial role of CDOs as supported and remarked upon previous studies; and, then, the third one stresses out the importance of the individual leverage to generate creativity by the moderating role of DCs. By highlighting the originality of the research, since CDOs are seen to be the spark of unique ideas and innovations in the organization, further insights are proposed to position the need for conceptualizing new paths for developing technologies toward organizational creativity and humanity.

Chief Digital Officers

Die digitale Transformation fordert grundlegende Veränderungen in Unternehmen. Um dieser Herausforderung gerecht zu werden, kreieren Unternehmen vermehrt eine neue Führungsposition, den Chief Digital Officer (CDO). Unternehmensspezifische Unterschiede haben vielzählige Variationen von CDOs hervorgebracht. Diese Studie fasst bestehende Literatur zusammen und gibt einen allgemeinen Überblick über die Rolle des CDOs. Basierend auf den Erkenntnissen werden Handlungsempfehlungen gegeben und zukünftige Forschungsfelder definiert.

Eine Taxonomie zur Rollendefinition von Chief Digital Officers im Zeitalter der Digitalen Transformation

ZusammenfassungDie Anforderungen an einen Chief Digital Officer (CDO) unterliegen Veränderungen und die Ausgestaltung dieser Rolle nimmt je nach organisationaler Struktur eine unterschiedliche Bedeutung an. Die CDO-Rollentaxonomie dient Unternehmen als nützliches Werkzeug, um die Integration dieser Rolle in die organisatorischen Gegebenheiten zu vollziehen und die erforderlichen Kompetenzen und Aufgabenbereiche (zum Beispiel bei der Neuausschreibung des Profils) festzulegen. Die Taxonomie basiert auf dem adaptierten Extended Taxonomy Design Process (ETDP). Dies ermöglicht einen zugleich wissenschaftlich basierten und praxisorientierten Blick auf die benötigten Kompetenzen eines CDOs im Kontext der Digitalen Transformation.Aufbauend auf einer Literature Review wurden Dimensionen und Charakteristiken, gemäß den initialien Meta-Charakteristiken, den Managerrollen von Mintzberg, geclustert. In drei Iterationszyklen wurde die Taxonomie erarbeitet und mit Erkenntnissen aus Stellenbeschreibungen ergänzt. Die Evaluierung erfolgte durch Interviews mit Praktikern aus dem Executive Search Bereich.Der wissenschaftliche Praxisbeitrag macht die CDO-Rolle mittels einer Taxonomie, die mit vier Meta-Charakteristiken, neun Dimensionen und insgesamt 26 spezifischen Charakteristiken ausgestaltet ist, fassbar. Die einzelnen Charakteristiken sind dabei den Meta-Ebenen organisatorisch, entscheidungsrelevant, interpersonell und informativ zugeordnet, was eine strukturierte und zielorientierte Rollendefinition erleichtert.

Chief Digital Officers’ Social Construction of and Coping with Digital Transformation

Chief Digital Officers’ Social Construction of and Coping with Digital Transformation

A perfect match or an arranged marriage? How chief digital officers and chief information officers perceive their relationship: a dyadic research design

ABSTRACT Several organisations have introduced a new leadership role, the Chief Digital Officer (CDO), as a centralised role in their top management team (TMT), tasked with accelerating and coordinating their digital transformation. While previous research proposes a complementary, tight alignment between the CDO and the Chief Information Officer (CIO), role redundancies and the fight for recognition and resources also suggest an inherent tension. We provide insights into the CIO-CDO collaboration quality based on role, TMT cooperation, conflict theory, and a dyadic design approach of 11 CIO-CDO relationships with 33 expert interviews in two waves. Our findings indicate that the CIO-CDO relationship may not always be as complementary as proposed in the literature; instead, in the vast majority of our dyads, there is too much role conflict to achieve tight alignment, leading to separation behaviour between the roles. We identify the involvement in the introduction of the other role, the CIO demand-side orientation, and the CDO supply-side orientation as important contingency factors determining the quality of the CIO-CDO relationship. Finally, unless the CIO-CDO relationship resembles a perfect match, a unified Chief Digital and Information Officer (CDIO) role may better resolve the challenges we identify in our sample’s dyads. Our insights extend the understanding of the CIO-CDO relationship.

Information is a key: Systematic literature review and empirical results on role configurations of chief information officers and chief digital officers

In the context of the digitization of companies, the executive positions of chief information officer (CIO) and chief digital officer (CDO) are becoming more important. Based on a systematic literature analysis and an empirical survey among German companies, this article shows that there are clear overlaps and role conflicts between CIOs (Hunter, 2010) and CDOs (Kunisch et al., 2020) in company practice. However, the CDO in particular has some areas of responsibility, such as communicating the need for digitization in companies, which are not attributed to the CIO. These might therefore be seen as new tasks. In contrast, topics such as information technology (IT) costs and efficiency as well as strategy orientation, but also cybersecurity and IT governance are more likely to be seen as the responsibility of the CIO. Judging by the results of the literature analysis and the empirical study, it might be feasible to maintain both positions in the future.

The art of digital transformation as crafted by a chief digital officer

Chief Digital Officers (CDOs) play a multitude of roles as they facilitate digital transformation. In this opinion paper, we draw on an interview that we undertook with the CDO at a major Chinese software and technology services firm to highlight the intricacies and idiosyncrasies of digital transformation work both within the organization and externally to clients. We characterise the nature of the CDO’s role as ‘the art of digital transformation’, recognising the blend of business and technology knowledge with superior communication and persuasion skills.

Empirical identification of the chief digital officer role: A latent Dirichlet allocation approach

This study examines the global demand for Chief Digital Officers (CDOs) to determine a universal CDO archetype in terms of competencies and tasks. It uses Bayesian statistics and Latent Dirichlet Allocation (LDA) topic modeling to measure multiple dimensions in a sample of 518 job postings for CDO positions. Findings show the hybrid nature of newly appointed CDOs, who feature a mixture of both business administration and technological skills. Further, the study highlights the pivotal role of CDOs in terms of strategic change in companies. The study has three major contributions. First, it showcases the value of LDA in job profiling research. Second, it bridges the existing knowledge gaps in CDO literature with empirical evidence from a global dataset and identifies a core CDO profile based on data extracted through LDA. Third, it illustrates the current market requirements for CDO positions, which is useful to both companies and candidates.

The New Kid on the Block: Chief Digital Officers and Three Ways of Political Job Crafting

Chief Digital Officers (CDO) are expected to fulfill a strategic role in the digital transformation strategy and its implementation. Although research on digital transformation is growing steadily, we lack a coherent understanding of the extent and the nature of the CDO role as the scope of the CDOs’ responsibilities remains unclear and there are potential redundancies with reference to other IT executives. Based on 53 interviews with CDOs, we examine how they as strategic leaders engage in defining their jobs. In our analysis we draw on job crafting theory as a theoretical lens. We identify that CDOs face pressures to define a role narrative and engage in political job crafting practices. Specifically, we reveal change of existing power dynamics, shift of perception as well as enhancement of job credibility as political job crafting practices. These practices help strategic leaders, CDOs in particular, to maneuver strategically and politically in the beginning but also throughout their tenure to gain sufficient authority to execute their mission. In so doing, we extend the present understanding of job crafting as a political activity at the level of strategic leadership, specifically in the context of digital transformation.

When Do Chief Digital Officers Matter? An Examination of CDO Power and Firm Performance

Incumbent firms have been increasingly appointing a Chief Digital Officer (CDO) to centrally manage and coordinate digital transformation endeavors. While extant research focuses on understanding the responsibilities of CDOs, we know only little about whether and how different CDO role designs influence firm performance. Integrating upper echelons theory with the managerial power literature, we theorize on and empirically investigate the influence of CDO power on firm performance. Our sample consists of 321 CDOs that represent 286 firms from the S&P 500 and STOXX Europe 600 indices from 2010 to 2019. In line with our hypotheses, we find that CDO multifunctional power and expertise power positively influence firm performance. Moreover, while our results reveal that, in contrast to our expectations, CDO hierarchical power negatively influences firm performance, we find that it serves as an important contingency factor that amplifies the positive effects of CDO multifunctional and expertise power on firm performance. We advance the managerial power literature in the context of digital transformation and provide guidance on the role design of CDOs.

Chief digital officers: the state of the art and the road ahead

There is a lively debate on chief digital officers (CDOs). Some practitioners stress CDOs’ critical role in recrafting digital strategies and accelerating digital transformation, while others predict their disappearance. Academics have also recently begun to study this new executive position and conducted research on CDOs which is, however, scattered across different disciplines and publication outlets. We conduct a systematic literature review that consolidates these initial gains in knowledge. Specifically, we integrate findings on theoretical lenses, research designs, and key themes in studies on CDOs and we propose a framework that organizes CDO research in three broad themes: antecedents of CDO presence, the CDO role, and consequences of CDO presence. We then build on identified gaps to develop an extensive agenda for future research on CDOs. For academic researchers, we not only offer a discipline-spanning overview of knowledge on the topic at hand but also provide useful direction towards fruitful avenues for future research on CDOs. For practitioners, we offer a summary of the current scientific literature on CDOs, including relevant insights on CDO appointments, governance, and performance consequences.

Chief Digital Officers: An Analysis of the Presence of a Centralized Digital Transformation Role

AbstractBy appointing a chief digital officer (CDO), firms decide for a central role responsible for their digital transformation. While CDOs have recently appeared in the C‐suites of firms across the globe, the current literature lacks insights into the specific antecedents of CDO presence. Grounded in the peculiarities of the digital age, we provide theoretical arguments explaining how the decision to centralize digital transformation responsibilities might be related to transformation urgency and coordination needs. Empirical analyses based on a panel data set of 913 US and European firms support that transformation urgency and coordination needs predict CDO presence. An additional analysis of moderating temporal effects reveals that, over time, the effect of transformation urgency is weakened and the effect of coordination needs on CDO presence is strengthened. We discuss implications for research and practice regarding the antecedents of CDO presence, TMT research more generally, and centralization in the digital age.

Chief Digital Officers: What We Know So Far

Chief Digital Officers: What We Know So Far

Digital Transformation and the Legal Profession: How Corporate Legal Departments Should Digitally Transform to Create New Forms of Value

Due in part to the COVID-19 pandemic, enhancements in technology, as well as shifts in the macroeconomic and socioeconomic dynamics of globalization, Digital Transformation (DT) has become an enterprise-wide imperative for most multinational companies (MNCs). As such, legal departments are being challenged to embrace enterprise DT and start their own department’s DT journeys. Despite these trends, there is little scholarship and research about how MNC legal departments attempt to meet the DT challenge: What are GCs doing to support enterprise level DT, and how are they digitally transforming their own departments? And importantly, is what they are doing effective and value-accretive? How should they approach their DT journeys?Based on interviews of 23 General Counsels and Chief Digital Officers of S&P 500 MNCs along with the authors’ professional experience, we investigate in-house legal departments’ response and approach to DT and recommend a new model approach. Standard depictions of MNC legal departments suggest that they are viewed as cost centers. And much of the literature focuses on how GCs can add value by improving efficiency and lowering cost. The literature also appears to assume law firms provide more creative, strategic, value-additive advice than in-house legal departments. Contrary to such depictions, we contend that DT can enable legal departments to add value that external providers cannot, and that goes far beyond efficiency generation, cost reduction, and increased speed-to-market. We identify a Legal DT Maturity Framework that maps corporate legal departments’ DT trajectory into three common phases. We argue that the current three-phased approach to DT that many GCs utilize generates some added value but does not enable the full potential of DT to be harnessed. Drawing upon lessons from our interviewees’ experiences and our own, we articulate a best-practices model for how legal departments should approach DT to generate new forms of value and shift from being a cost center to a revenue generator and value creator. Our model demonstrates that the GC, as internal to the MNC, has an advantage (as compared to external providers) in understanding the MNC’s strategic priorities and risk preferences and, therefore, is better at identifying the right and best opportunities to leverage and exploit to the MNC’s advantage.In addition to filling some of the gaps in the literature, this article provides a vision that has broad applicability beyond the MNC legal department context and can be used as a model for law firms and other legal services providers to harness DT in their own contexts, so as to stay at pace with—and better serve—clients with the never-ending DT challenges emerging on their horizons.

Chief digital officers: An exploratory analysis of their emergence, nature, and determinants

With the transition from the industrial age to the digital age, a notable phenomenon is the adoption of the chief digital officer—a senior executive position dedicated to digital issues—in large firms. To explore this phenomenon, we conduct a large-scale, empirical study of the emergence of the chief digital officer position, potential variations of this role, and the conditions under which firms choose to have this position. Our exploratory analysis of all firms in the S&P 1500 index between 2000 and 2018 offers unique insights. In descriptive terms, we find that chief digital officers did not appear until 2003 and their prevalence has increased notably since 2010. In addition, an analysis of these executives' titles and role descriptions alludes to two conceptually different types of chief digital officers: generalists and domain specialists. In prescriptive terms, we reveal several factors related to firms’ performance, strategic leadership, task demands, task environments, and mimicry behavior that influence the likelihood of chief digital officer presence. The combined empirical insights call for nuanced theoretical explanations of the chief digital officer phenomenon. Our study informs research on chief digital officers and functional executives in general. More generally, it provides a window into the larger issue of the microfoundations of digital transformation and strategic change in large firms, and it points to new strategy actors and practices.

How do chief digital officers pursue digital transformation activities? The role of organization design parameters

While an increasing number of companies are establishing Chief Digital Officer (CDO) positions to support their digital transformation (DT), there has been very little research on how CDOs can pursue DT activities in their organizations. We conducted a multiple-case study to investigate the organization design parameters surrounding CDOs and their DT activities. Our study contributes to research on strategic change by showing how, once CDOs have been appointed, they need to be embedded in the organization by (vertically) anchoring them in the organization's structure, depending on the firm's DT strategy and the CDO's task focus. Further, CDOs combine different formal and informal activities to coordinate (horizontally) between employees working on DT activities in different units and at different hierarchical levels. We also contribute to organization design research by providing insights into how a firm's DT strategy, its CDO's hierarchical position, and the CDO's task focus have to be aligned in order to digitally transform a company.

Driving forces and barriers of Industry 4.0: Do multinational and small and medium-sized companies have equal opportunities?

The Fourth Industrial Revolution poses significant challenges to manufacturing companies from the technological, organizational and management points of view. This paper aims to explore how top executives interpret the concept of Industry 4.0, the driving forces for introducing new technologies and the main barriers to Industry 4.0. The authors applied a qualitative case study design involving 26 semi-structured interviews with leading members of firms, including chief digital officers and chief executive officers. Company websites and annual reports were also examined to increase the reliability and validity of the results. The authors found that management desire to increase control and enable real-time performance measurement is a significant driving force behind Industry 4.0, alongside production factors. Organizational resistance at both employee and middle management levels can significantly hinder the introduction of Industry 4.0 technologies, though these technologies can also transform management functions. Multinational enterprises have higher driving forces and lower barriers to industry 4.0 than small and medium-sized companies, but these smaller companies have good opportunities, too.

Agenda of Russian Chief Digital Officers

Digital transformation of business is an increasingly relevant issue for companies across the world, requiring more attention on the part of top management. Appointing an executive focused on digital transformation is a popular, but not the only possible, measure undertaken in an effort to respond to the challenges of the new era. Many believe that the role of CDO (Chief Digital Officer) will prove to be “the most exciting strategic role in the coming decade”. At the same time, there is a wide range of opinions on the CDO’s actual job description and the knowledge and competencies it requires. This study by Moscow School of Management SKOLKOVO will help CEOs understand what role the CDO can and should play in each business context, formulate its range of responsibilities, and assess which knowledge and competencies these responsibilities require. Depending on the nature and the environment of a given business, there are three possible strategic approaches: “fully digital”, “digitally wrapped”, and “digitally spiced”. Each of these requires a CDO, a digital transformation-focused executive, as an important condition for success. However, the range of tasks such a manager handles is profoundly different in each case. In the “fully digital” domain, the CDO virtually becomes the corporation’s key visionary. His responsibilities include ensuring competitiveness with companies “born digital”, which look for the slightest faults in wellestablished business models in order to re-direct financial flows through “digital disruption” to their benefit. With the “digitally wrapped” strategy, the CDO is mostly the executive in charge of organizational development. His priorities are to create an innovation culture, develop human capital, and arrange for the respective re-structuring. Lastly, with the “digitally spiced” strategy, the CDO basically has the responsibilities of a top manager in charge of developing advanced technologies. The legacy system stack can remain with the Chief Technology Officer or Chief Information Officer, upon which the CDO will build, developing solutions based on such advanced technologies as the Internet of Things, Artificial Intelligence or cyber-physical systems. The role of CDO, regardless of the specific industry or company, is defined by a diverse and incredibly demanding set of requirements. The perfect CDO is a super-manager with a variety of functions who actively interacts with other executives and has profound knowledge as well as managerial skills. An effective CDO’s knowledge and competencies may be grouped into the following four areas: 1. Strategy and organisation: understanding approaches to strategy development in the conditions of digital transformation, economic opportunities presented by digital business models, and the respective principles of platforms and ecosystems; investment-planning and investment efficiency management skills; knowledge of organisational design and change management; 2. Consumer experience and design-thinking: insight into the digital consumers’ experience and lifestyle, the ability to analyse the pros and cons of a new product and to turn this analysis into working prototypes, mastered methods of launching new products into markets and receiving market feedback; 3. Production and logistics: knowledge of the industry’s value chains, understanding of key company operations, their strengths and weaknesses; business process re-engineering skills; 4. Technology and data: understanding the modern digital stack; knowledge of company data management strategies; ability to analyse data (including big data) for managerial decision-making; deep insight into corporate cybersecurity. The relative weight of the areas of knowledge will vary depending on the transformation type: while the “fully digital” strategy primarily requires strategic and organisational thinking, the “digitally wrapped” strategy focuses on managing the consumer experience, and the “digitally spiced” strategy focuses on the technology and internal manufacturing processes. Will the CDO role be permanently embedded in the organisational charts, or will it only exist for the duration of the relatively short period of revolutionary changes associated with the current digital technology? Digital transformation, as extensive as it is, is a finite process. It will certainly go on for many years, but eventually, the corporation will arrive at a new quality. What will happen to the CDO at that point? The opinions of our respondents were split roughly in half. Some of them indeed see the CDO as a sort of “professional revolutionary” who will be challenged in staffing a role once the revolution is complete and every corporate director has sufficient digital competencies. The other opinion is that the revolution will never end and the digitally-focused executive who ties together the entire company’s digital agenda will constitute an integral part of any major company’s organisational design. Which of the two is more accurate remains to be seen.