The CMO’s Guide to the Chief Digital Officer

The CMO’s Guide to the Chief Digital Officer informs chief marketers about what CDOs mean for their businesses, brands, and careers.  After outlining the market factors driving boards of directors and CEOs to create CDO positions, I’ll share three scenarios chief marketers can use to increase their relevance and influence whether they work with CDOs or not.

The Chief Digital Officer is an emerging role in organizations whose boards and CEOs have voted to pursue an explicit transformation agenda, so it is a clear sign of disruption.  Profound transformation rarely happens in large organizations and brands, which prize scale, consistency, and efficiency.

Savvy CMOs will harmonize with these forces by working closely with CDOs or, in some cases, becoming CDOs themselves.

CMOs that have backgrounds in management consulting (strategy, transformation) as well as hands-on “digital” experience with social media, mobile, analytics, and ecommerce can make excellent candidates for CDO roles.  Having solid knowledge of “technology marketing” won’t do it because what’s required in most cases is transforming how the firm/brand understands and relates to stakeholders (“customer-clients”) and delivering personal, individualized experiences to customer-clients.  This is a gut rehab, and neither the CIO nor the CMO is well suited to do it. That said, not all firms/brands need CDOs now, nor will all need them.  All will have to reorient themselves to customer-clients and start using digital information and tools for most of their business processes—and soon.

Chief Digital Officer Background

The chief digital officer is a powerful market signal that firm/brand transformation is required—all is not right at the ranch.  The CDO will drive profound digital adoption in the organization, which means deep and broad process change.  A new role is required because sitting CIOs or CMOs either don’t have the digital chops to do it or they are too occupied running their functions to focus on transformation.  Note that many of the first CDO roles were created at media and publishing companies, most of which are listing gravely to port.  In most cases, top leadership has recognized that their core business is being disrupted by “digital technologies” of which existing leadership has insufficient experience.

Digital technologies are changing the business and social environment along two axes, and the result is clear: brands will need to provide personal individualized experience.

To put the emergence of the CDO in marketing terms, digital technologies are changing the business and social environment in two ways in which brands currently fall short:  digital gives savvy organizations new real time contextual social information about stakeholder outcomes (people use products and services to create outcomes), and it enables organizations to have personal, individualized interactions with stakeholders at scale.  Here’s how it boils down into competencies.  The digital competencies that most organizations need but don’t have are:

• Social business that makes the brand deeply personal by using social technologies to relate to people; brands need to mature beyond superficial social media style promotion.
• Mobile experience that gathers and synthesizes location-based customer/client information to create convenience/capabilities for customer-clients that provide new tools and capabilities relevant to user outcomes (apps). Most brands’ smartphone and tablet apps are worthless from a customer-client outcome perspective; apps are too busy promoting to address outcomes.
• Big data and analytics that perceive more of the digital world and transform knowledge into customer-client capability/convenience.  This goes far beyond “web analytics” or “social media analytics”; to provide individual experience, you’ll need to work with far more diverse data than you do now, including messy unstructured data.
• Ecommerce that integrates relevant transaction, device, social and mobile information that informs the brand and provides a more personal experience for customer-clients focused on empowering them, not selling to them; this is built on a changed attitude toward customer-clients that’s reflected in more messaging about customer-client outcomes than product/service features.

Personal individualized experience, when done well, will lead to higher revenue and profit because the brand/firm will show its relevance to customer-client outcomes through its responses to their individual actions. Think about it; “custom” or bespoke products and services are broadly recognized as having higher value than mass-produced (product) or mass-managed (service). I am predicting that the four digital competencies will enable firm/brands to provide personal individualized experience at scale.  That is looking at the opportunity/glass-half-full side. The threat/glass-half-empty is that firm/brands that don’t provide such experiences won’t compete.  At all.

This is not an evolutionary proposition; it is transformational beyond anything we can imagine. You can drill down in Building Post-Product Relationships in the Social Channel.  To remain relevant, brands must shift their focus away from themselves and their products to customer-client outcomes. Think of yourself as a customer-client:  would you like to do business more with:

• A brand that pops screens at you, spams you, makes unsolicited calls to you, invades your computer/mobile experience with banners, solicits you for its products/services you already have—all the while talking about products you may use but don’t want to think about right now?…or
• A brand that responds to your online interactions by suggesting helpful information or links that aren’t about its products? Reviews your business with it and suggests things that might be helpful to meeting your personal or professional goals? Suggests ideas that might be helpful to your family members, colleagues, or friends?

In these terms, it’s pretty obvious, isn’t it?  Digital makes personal practical, and the brands that wait too long will capsize.

Please understand that I write this having been thrice a chief marketer myself.  Our world is rapidly morphing into a postproduct world that recognizes what’s always been the truth: customer-clients really don’t care about products and services; they only buy them to make their lives better.  Digital social technologies have changed the world because social information about customer-client outcomes is virtually free now, so it’s economically possible to skate to where the puck has always been anyway.  Brands can now differentiate by helping customer-clients achieve outcomes.  The CDO is in charge of rapidly developing the competencies to mine and use digital information to offer customer-clients individualized experiences at scale.

Meanwhile, in the CMO’s Office

So where does all this leave the CMO?  Actually, there has never been a better time to be in marketing, although “marketing” as we’ve practiced it is on the seriously endangered list.

For our purposes here, I’ll define the core intent of marketing as:  “Interacting with customer-clients to increase their understanding of how our “brands” can make their lives better.”  The way we have done this until now has been incredibly primitive.  We have focused on our products and services (logical, we knew more about them than about customer-clients) and tried to “prove” our relevance even while we knew very little about individual outcomes.  We delivered mass messages, promotions, pricing, and products because we didn’t have the information to make it personal.

Now, digital social technologies give brands incredibly rich information about individual goals and outcomes, so brands will be able to truly be relevant instead of faking it.  But there’s going to be some turbulence while we navigate to smoother air.

Transformation initiatives in large organizations are like relay racing:  to maximize value, leaders must transfer the baton from old to new without dropping it.  To transform brands from digital social adolescents to mature adults, they must keep operating the current state while developing new competencies.  Then they operate old and new concurrently until they master the new enough to stop doing the old.  Much of the status quo in marketing, I.T., and other areas may be challenged, but the status quo will persist in during the transformation process.

Here are three scenarios that help maximize CMOs’ relevance during digital transformation. Obviously these are generalizations, so mix and match to create your own.

Evolving CMO

Definition: you’re an experienced chief marketer who’s quite familiar with digital marketing but not a leader.  You’ve had responsibility for “online experience” in a Web 1.0 sense but at arm’s length as you’ve outsourced a lot to agencies.  You can understand the need to transform but want to remain relevant rather than becoming a change agent yourself.

Action steps:

• Talk with your CEO, CIO, board members, etc. about digital transformation.  Take their temperature.  What do they think of it?  Obviously, you need to manage your part of transformation in harmony with theirs.
• Of the four CDO competencies, pick a major and a minor, but ecommerce can’t be the major because it’s evolving as a function of the others.  Optimize for your experience, competencies’ relevance to the brand’s current marketing, and your interest.  You want to start building serious hands-on knowledge about these competencies.  If you love something, it will be easier to stretch yourself.
• Actively look for opportunities to develop competency in-house; you can learn yourself, lead your teams, and help prepare for the brand’s transformation, even if you don’t lead it; you work to support it.
• Ecommerce/websites offer extensive opportunities to evolve and add value, pre-transformation.  Update: Website Redesign 2.0
• Big data and analytics involve a lot of collaboration with the CIO, so unless you have a very close working relationship already, don’t pick that one.  However, if s/he is leading in big data, bend over backward to support the initiatives and learn as much as possible.
• Most brands are in the dark ages with mobile.  You can start evolving by rethinking your relationship with mobile users.  Read How Marketers Are Pushing the Wrong Button on Mobile
• Social media might be a good choice because so few brands are even in the ballpark. Review the Upgrade Social Media Use Cases along with its Team Building Plan; they will show you how to build social business competency and start taking social media back from your agencies.  Once you realize that social business competency is core to your and your brand’s future, you probably don’t want to outsource it much longer unless the use case is extremely strong.
• If you like, use the Chief Digital Office
• Review this digital transformation thought leadership library; it includes thought leadership from global consultancies, visionary executives and analysts.

Transforming CMO

Definition: you’re an experienced chief marketer who’s led transformations in the past, so you are accustomed to leading peers and teams through the flames of fear.  Moreover, you’ve gotten your hands dirty with digital marketing.  You’ve long had responsibility for “online experience” in a Web 1.0 sense; you’ve built in-house competencies in various aspects of SEO, content design, user experience design, mobile design and social media, even though you’ve also outsourced a lot to agencies.  You can understand the need to transform and want to be a change agent yourself.

Note, not all brands will need CDOs, so you may be able to work with your CIO to evolve quickly enough without one. But don’t fool yourself; we’ve been in a 33rpm world, and social has put us at 78rpm. You probably need to go faster than you think is feasible.

Action steps:

• Talk with your CEO, CIO, board members, etc. about digital transformation.  Take their temperature.  What do they think of it? Obviously, you need to manage your part of transformation in harmony with theirs.
• Of the four CDO competencies, pick a major and two minors, but ecommerce can’t be the major because it’s evolving as a function of the others.  Optimize for your experience, the major’s relevance to the brand’s current marketing and your interest.  You want to start building aggressive hands-on knowledge about these competencies.  If you love something, it will be easier to stretch yourself and your teams.
• Socialize the things you are learning with your Chief Sales Officer, CIO, CEO, COO, CFO and other peers.  Develop a point of view about what your brand will look like, postproduct. Use that as an organizing principle that you make actionable through social business, mobile, and big data/analytics.
• Social media is an excellent choice for the major because so few brands are even in the ballpark, and you probably lead it currently.  If not your major, it’s a mandatory minor.  Review the Upgrade Social Media Use Cases along with their team building plans, which are linked from the use cases; they will show you how to build social business competency and take social media back from your agencies.  Make social a priority because it will educate your teams about customer-client outcomes quickly and inexpensively.  Most agencies thrive on creating content and delivering it though social technologies; they can’t relate to your customers and prospects as well as your brand can.
• Once you develop and test some hypotheses about user outcomes, aggressively experiment with outcome based messaging on your website.
• Use the Evolving CMO bullets on the other competencies.
• Bookmark and check the Chief Digital Office often; also join its Google+ page, which will feature curated thought leaders exchanging emerging ideas on digital transformation.
• Make this digital transformation thought leadership library your best friend; it’s updated frequently with thought leadership from global consultancies, visionary executives, and analysts.

CDO

Definition: you’re an experienced chief marketer who’s jumping out of your seat right now. You’ve led transformations in the past, so you are accustomed to leading peers and teams through the flames of fear, and you want to champion digital transformation even if it means a career change.  You’ve gotten your hands dirty up to the shoulders with digital marketing. You’ve long had responsibility for “online experience” in a Web 1.0 sense; you’ve built in-house teams in various aspects of SEO, content design, user experience design, mobile design and social media, even though you’ve also outsourced a lot to agencies.  You can understand the need to transform and want to be a change agent yourself.  You want to get out of marketing 1.0.

Action steps:

• Talk with your CEO, CIO, board members, etc. about digital transformation.  Take their temperature.  What do they think of it?  If they are excited about it, maybe you can lead an aggressive effort in your current situation; if not, lace up your running shoes.
• Of the four CDO competencies, pick social business and another major, along with two minors.  Optimize for your experience, the majors’ relevance to the brand’s current marketing and your interest.  You want to start building aggressive hands-on knowledge.  If you love something, it will be easier to stretch.
• Socialize the things you are learning with your CIO, CEO, Chief Sales Officer, COO, CFO and other peers.  Develop a point of view about what your brand will look like, postproduct. Use that as an organizing principle that you make actionable through social business, mobile, and big data/analytics.
• Start a blog (if needed, use Blogging Quick Launch Guide), and share your insights on digital transformation at brands; interact on Twitter and Google+ by following thought leaders and sharing insights and links. Take Twitter and Google+ to the next level by using Value Vectors.
• Connect with executive search firms that specialize in CDO and digital transformation searches.  Russell Reynolds has extensive thought leadership and is very active.  Egon Zehnder is also active.
• Actively network online with CEOs and consultants by reaching out to them on LinkedIn, showing them your blog posts and relating your insights to what you know about them.  Also reach out to CIOs championing big data initiatives and who are active in digital social venues. Less interesting are CIOs that don’t get social as transformation.  Many CIOs hate unstructured data, but that’s where the most personal information often is.
• Use the Transforming CMO bullets for the other competencies.
• Get active with the Chief Digital Office and join its Google+ page, which will feature curated thought leaders exchanging emerging ideas on digital transformation.  In addition, its private community will hold behind closed doors sessions with pioneers.
• Make this digital transformation thought leadership library your best friend; it’s updated frequently with thought leadership from global consultancies, visionary executives, and analysts.

Insights

• If you think about the core intent of marketing as I do, the disruption described here is the best thing that’s ever happened to the field.  Arguably, marketing has taken something personal—listening to an individual retail customer and suggesting something that would help him/her—and mechanized it.  A side effect is that it’s abjectly impersonal.  That’s what’s changing; we are going back to personal because it’s now practical at scale.
• Social business is the most “analog of the digital” because it offers people and brands the ability to interact personally, freely, and individually, which is deeply satisfying.  The data element is crucial back office support for the personal individualized experience, but it’s also the mechanical part.  Social is the messiest and most personal.  It also informs the others because you will learn about customer-client outcomes in social, validate the nuances, and use your knowledge to develop mobile, web, and other experiences.
• I’ll close with this arresting thought:  as always, businesses, brands, and industries will adopt at various speeds, but in case you think you are in a conservative field and won’t have to deal with digital for a few years, beware.  I saw how conservative B2B clients in the early 2000s began demanding Amazon-like functions from their big enterprise vendors.  They were flatfooted and paid consultants dearly to try to “catch them up” to clients’ demands. Conservative people and fields aren’t aware of it, but their expectations change based on personal experience elsewhere; once the most adventurous or aggressive brands start offering the personal, individualized experience, people will demand it everywhere.  Social business and mobile require relatively modest investments, but they have long learning curves.  Big data and analytics often require significant investments of money and time.