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'Digital Leaders Can Resolve Governance and Geopolitical Issues'
CDOs are set to play a key role in the transformation and the future success of the business with their cohesive, 360-degree approach, especially considering the constantly evolving business landscape
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As the businesses are increasingly becoming data driven, digital officers are taking a call on the strategies of the businesses. Puneet Kalra, Managing Director, Russell Reynolds Associates, a global search and leadership advisory firm speaks about the role of CDOs, digital transformation, artificial intelligence and more:
Since all businesses are switching towards digital, how do Chief Digital Officer (CDO) can steer business growth?
The pace of digital disruption is picking up significantly across industries, with financial services, healthcare and industrial companies bracing for a projected double digit change in the coming 12 months and the world's largest companies are allotting C-level positions to tech-specific roles, specifically CDO (Chief Digital Officer). The CDO is not an extension of a CIO or a CTO, limited to the lens of tech savviness alone. There is an emergence of a new breed of leaders who are data-driven, business-centric, technology-savvy and well equipped to embrace and master digital transformation.
CDO is an executive who is responsible for transformational changes to shape the business model in emerging digital customer experience and next generation experience. CDOs lead digital business strategy, online services across the web, mobile and social platforms and oversight of enterprise content, applications and infrastructure and oversee operations in the rapidly-changing digital channels. Alongside, they also integrate modern age technologies such as Augmented Reality, Artificial Intelligence, and Big Data into business operations to enhance client touch points and work efficiencies.
When you say digital transformation is not only a technology discussion but a leadership challenge, what would you suggest to businesses to counter this challenge?
Companies from financial services to industrial sectors are reorienting their strategies and organisations to align with the customer/asset life cycle and decision-making process. They are leveraging digital capabilities to find new, increasingly targeted ways to convert and engage previously inaccessible touch points in the customer journey. Front-end interactions with customers and clients continue to be the priority of digital strategies, but firms are also leaning heavily on digital to collect proprietary customer/client data.
In retail, traditional players are evolving fast and furious to overcome operational and technology challenges to meet customers' demand for a seamless shopping experience across all channels and touch points. An integrated omnichannel outreach coupled with personalised experience and communications make or break the end-to-end customer experience - increasing not just the share of mind but also the share of wallet.
In the industrial sector, sensing and deep learning of the entire asset life span enable enhanced services scheduling and smart pricing. Companies are able to dispatch/alert the right and nearby engineers to do the field job at the shortest time. The predictive closed loop process enables instant updates from automated alerts to pricing the most efficient issue resolution and parts ordering at the backend. This not just increases productivity and overall efficiencies but also open doors to generate further revenue and business opportunities.
Do you believe that concepts of augmented reality, artificial intelligence, and big data are limited to big firms in India?
The new wave of AR, AI, and Big data are already pushing businesses to build up the capacities to stay ahead in their respective domains. Large multinationals, government organizations, small - mid scale enterprise and entrepreneurial ventures, all are witnessing the constant innovation in products and services; to a large extent, it is redefining business models and increasingly moving towards a collaborative ecosystem across industries, amongst both small and big firms.
CDOs need to constantly evolve with technology else their strategies might become irrelevant, so, how do you think we can provide employees, an ecosystem where they can upgrade their tech skills regularly?
Leaders will have to first embrace innovation and be ready to keep evolving themselves. In the digital age, corporate growth largely depends on the adoption of new technologies to create impactful strategies. Leaders can encourage entrepreneurship within the firm to spur ideas incubation and develop proof of concepts, motivate the teams to upgrade their knowledge, expose them to complex scenarios and provide a vibrant exchange or reverse mentoring environment to enhance the tech skills of their employees. This can help organizations not just enable but harness the creativity of the staff to enable an interactive learning ecosystem.
Healthcare and Financial firms are already encouraging their staff to work on Medtech or Fintech related ideas. There are more organisations up skilling their staff on digital literacy, also known as the ability to conceptualize and understand the possibilities that technology such as Artificial Intelligence provides. A MIT Sloan report indicates that 36 per cent of the organisations is passive adapters with little understanding or adoption of artificial intelligence.
We have seen Nandan Nilekani, a tech person giving us the revolutionary Aadhaar card, do you think there is a need to include CDOs in public policy making as well?
For a country such as India, digital could actually be very useful in helping resolve many governance and geopolitical issues. Whether it is the availability of services, tracking of beneficiaries, transparency in decision making and usage of public funds, crime reporting, tracking tax evasion, security (domestic and cross-border), etc. Digital will be the platform to deliver multiple capabilities. The Aadhaar card is really our ability to track every citizen uniquely so subsequent analysis and action is useful.
With increasing focus on the digital, what trends do you think; we will see in the next five years in the organizational structure of businesses?
The world continues to spin on a data-tilted axis, and making the move from conventional business models to tech-driven ones is more important than ever. There is and will be a further increase in demand for highly experienced digital talent capable of leading a transformation is scarce. Consequently, the demand for executives with proven experience of transforming organisations digitally and those from pure-play, a digitally native company is immensely high. This creates retention issues, fuelling an increasingly competitive war for talent in time to come. CDOs are set to play a key role in the transformation and the future success of the business with their cohesive, 360-degree approach, especially considering the constantly evolving business landscape. In five years time, CDOs may lead the way to the rise of the Digital CEOs in time to come.
Finally, what, according to you, are the qualities that a CDO must have?
To enable seamless digital transformation, CDOs need to possess the ability to realign the organisation (agile structure, shared metrics, clear delineation of governance and decision rights) to garner vital support from key functions, including the Board of Directors and the C-suites. They have to also think about how to leverage digital internally to lower costs, improve quality, and engage employees. The CDO needs to influence and galvanise within the organisation, and not work as an isolated team or strategy; it should pervade every functions and department.
The question lies in who befits the CDO roles? There is an increasing trend of CMOs and Sales leaders who are digitally savvy and CIOs who have operations experience, transiting into the CDO roles. But few have worked across functions or have had extensive business experience, and they will have to demonstrate the ability to manage changes and meaningful transformation to be successful in this role. They have to overcome the typical CMO and CIO functional mindsets and expand their influence and impact into the broader business. They will have to operate at the intersection of strategy and technology and help their boards connect the dots with technology and their digital strategies, often assuming larger responsibilities, including P&L accountability. Around 30-40 per cent CDOs now come with primary expertise in Marketing, Sales or Customer Service as against Technology.