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In the last two decades, digital technologies have transformed products, services, and entire business models, including the customer value proposition and the value creation processes. In many cases, new digital strategies have also made the transformation of business ecosystems necessary, creating a strong need for collaboration and coordination both within the company and with external constituencies. As a result, companies are exploring the roles and duties of digital executives, their attitudes and skills, and the key factors that lead to a successful digital transformation.
The executive most often leading the digital agenda is the chief digital officer. CDOs act as transformers in chief1 by propelling digital transformation, advocating the company’s digital efforts to internal and external stakeholders, and guiding management and staff through the change process. Scholars argue that this role must be filled by multiskilled leaders who can connect technology to the marketplace as well as the organizational business model and culture.2 Providing direction — vision and purpose for digital — is seen as crucial.3
To shed light on this important role, we collected and analyzed data from 211 digital leaders in manufacturing companies in Germany, Austria, and Switzerland, exploring successful CDO traits as well as conditions that lead to success. (See “About the Research.”) We explored questions including the following:
- How do CDOs serve as digital innovators and supporters of others who innovate?
- Who comprises their internal and external networks for digital transformation?
- Which skills and professional expertise do they draw on?
- What type of CDO is best suited to specific contexts?
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1. T. Rickards, K. Smaje, and V. Sohoni, “‘Transformer in Chief’: The New Chief Digital Officer,” McKinsey & Company, September 2015, www.mckinsey.com.
2. C. Galunic, “Digital Journeys: 10 Checkpoints in Building a Digital-Ready Company,” INSEAD case no. 418-0007-52018, INSEAD Case Publishing, Jan. 29, 2018, https://cases.insead.edu.
3. G.C. Kane, D. Palmer, A.N. Phillips, et al., “Coming of Age Digitally: Learning, Leadership, and Legacy,” MIT Sloan Management Review and Deloitte Insights, June 5, 2018, https://sloanreview.mit.edu.
4. These findings help shed more light on the results of other current studies. For instance, the 2018 Digital Business Global Executive Study from MIT Sloan Management Review and Deloitte revealed that among the key traits of effective digital leadership there are “creating conditions for the employees to experiment,” “empowering people to think differently,” and “getting people to collaborate across boundaries” (Kane et al., 2018).
5. To conceptualize and measure these interpersonal skills, we deployed the well-established construct of political skills (see, for instance, G.R. Ferris, D.C. Treadway, R.W. Kolodinsky, et al., “Development and Validation of the Political Skill Inventory,” Journal of Management 31, no. 1, (Feb. 1, 2005): 126-152.
6. A.W. Gouldner, A. “Cosmopolitans and Locals: Toward an Analysis of Latent Social Roles,” Administrative Science Quarterly 2, no. 3 (Dec. 1957): 281-306.
7. See, for instance, A. Hargadon, How Breakthroughs Happen: The Surprising Truth About How Companies Innovate (Boston: Harvard Business School Publishing, 2003).
8. P.C. Fiss, “Building Better Causal Theories: A Fuzzy Set Approach to Typologies in Organization Research,” Academy of Management Journal 54, no. 2 (Apr. 1, 2011): 393-420; C.C. Ragin, Redesigning Social Inquiry: Fuzzy Sets and Beyond (Chicago: University of Chicago Press, 2008).