The New Class Of Digital Leaders
strategy+business|Fall 2017

Faced with organizational challenges, more and more companies are hiring an executive to manage their digital transformation.

Pierre Péladeau, Mathias Herzog, and Olaf Acker
The New Class Of Digital Leaders

A growing number of companies have embraced the need for strong digital leaders. Our 2016 study of chief digital officers (CDOs), which analyzed the presence of such leaders among the world’s 2,500 largest public companies by market capitalization, revealed that 19 percent of these companies have now designated an executive to lead their digital agenda. This number is up from just 6 percent of companies in our 2015 study. And the uptick has gained momentum in recent years: Sixty percent of the digital leaders we identified in our most recent study have been appointed since 2015.

Such trends reflect the movement at many companies toward a state of more advanced digital competence. In our experience, it is typically at this stage that top management becomes focused on the need for digital leadership. Early on, different business units and corporate functions conduct scattershot experiments and pilot programs in hopes of kick-starting their digital efforts. But once a company decides to design a coherent, comprehensive strategy to capture the benefits of digitization, that decentralized approach will no longer suffice.

When it comes to implementing a digital strategy, the new class of CDOs often encounter several major obstacles upon assuming their role: ad hoc digital initiatives spread throughout a large organization, lacking central oversight; a traditional culture that resists change; a gap in the talent required; and legacy systems and structures that threaten to derail their ambitions. The right CDO for your company will have the background and experience to tackle these issues. The mix of requisite skills won’t look the same at every company, but will enable a CDO to lead your organization’s digital transformation, to the point at which fundamental changes in organization, governance, capabilities, business processes, underlying technology architecture, and culture take hold.

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