Companies promoted at least 11 chief digital officers (CDOs) to CEO last year. It marks the third straight year more CDOs rose to the top of their organization.
David Mathison, CEO of the CDO Club and CDO Summit, shared those numbers with CMSWire after NIKE Inc. promoted Adam Sussman from director of global strategy and development to the newly created position of CDO.
Chalk it up to digital transformation: NIKE, for example, expects e-commerce to generate $7 billion of the $50 billion in revenue it anticipates by fiscal 2020.
“Digital offers a fundamental transformation of our business,” explained Trevor Edwards, president of NIKE Brand. Before joining Nike in 2014, Sussman held executive positions with Zynga, Walt Disney Company and Electronic Arts.
Sussman will lead the team responsible for the development of digital products and services across Nike.com, Nike+ and Brand Digital platforms.
Sussman’s team will also drive Nike’s consumer engagement, while overseeing Nike’s digital products and services for consumers.
Mathison, in an interview with CMSWire, said Nike's decision to hire a CDO comes on the heels of similar moves by companies including American Apparel, American Eagle Outfitters, Beachbody, Bebe Stores, Benetton, Burberry, Haggar Clothing Co., Kohls, Luxottica, L'Oréal, Mens Wearhouse, New Balance and Under Armour.
CDOs are popping up in sports, too: Mathison cited the NFL, NBA, Tennis Australia and WWE.
“Are we about to witness the gamification of Nike's global digital program?” Mathison asked. “Possibly, given Adam's incredibly strong gaming background as SVP of global publishing at Zynga, SVP of publishing at Disney and VP of global publishing at EA.”
Mathison said he was not surprised to see Sussman report to the president of Nike.
“This is the norm for any successful CDO, who has to get buy-in from the top and drive consensus across the C-suite,” Mathison said.
Mathison reported the number of chief digital officers globally now stands at about 2,000, which includes “hybrid” titles bridging the marketing and IT functions. Some examples include:
- Chief Information and Digital Officer (Mark Dearnley at HMRC in the UK)
- Chief Technology and Digital Officer (Steve Holland at 7-Eleven)
- Chief Marketing and Digital Officer (Stephen van Rooyen at Sky)
Emphasizing the strategic value of the CDO role, he said the most startling statistic this year is the rise of the CDO to CEO. According to the CDO Club numbers:
- 2015: 11 CDOs became CEO and five CDOs became board directors/non-executive director (NED)
- 2014: Nine CDOs became CEO and four became director/NED
- 2013: Six CDOs became CEO and four became director/NED
- 2012: Three CDOs became CEO and one became NED/Director
“I don’t know the number of CMOs or CIOs who became CEO last year,” Mathison said, “but given how new the CDO title is (10 years old), and that there are hundreds of thousands of the former and only a couple thousand CDOs, I think this is a startling, meteoric rise.”
Not Sold on the CDO?
Nearly two years ago, analyst firm Forrester Research wasn’t convinced of a CDO revolution.
The Cambridge, Mass. firm reported in May 2014 that just 1 percent of firms planned to hire a CDO in the next 12 months, while 50 percent had no plans to bring on the executive role. The research (subscription required) featured a survey of more than 100 e-business professionals.
Report author Martin Gill told us then that CDOs aren’t necessarily a bad thing for firms to have, but they can become "scapegoats" that allow other executives to assume digital is exclusively the CDO's job.
"And they can go about their business as they always have," Gill said. "To thrive in the new digital world, firms must embed digital into everything they do, not create a new digital silo."
Last Thursday, Gill produced another report on digital hiring trends (subscription required). He reported 28 percent of digital teams now operate as standalone groups with their own budget, headcount and a strategic voice in the C-suite, up from 22 percent in 2014. Also, 21 percent of digital leaders now report in through line-of-business teams.
“But this doesn’t mean that these firms are all hiring chief digital officers,” Gill wrote. “Digital leaders in firms like United Airlines or technology leaders in firms like Capital One and FT.com are stepping up to lead their firms’ digital agendas by combining business acumen with digital knowledge.”
'Transformer in Chief'
Some industry analysts think CDOs are transforming companies. A report by McKinsey & Company last September called the CDO the "transformer in chief."
CDOs "are charged with coordinating and managing comprehensive changes that address everything from updating how a company works to building out entirely new businesses. And he or she must make progress quickly.”
“Given these demands, it’s not surprising that the number of people in CDO roles doubled from 2013 to 2014 and is expected to double again this year (in 2015),” noted report authors Tuck Rickards, managing director at Russell Reynolds Associates; Kate Smaje, director in McKinsey’s London office; and Vik Sohoni, director in the McKinsey Chicago office.
Companies hire CDOs when they “need to approach the complex root causes that must be dissected, understood and addressed before any substantive progress on digitization can be made,” they wrote.
Further, companies bring in CDOs when the CEO “realizes the organization can’t meet the primary challenge of creating integrated transformation within its current construct.”