Over the past 20 years, digital technology has changed products, services and even the entire business model. Companies have also begun to implement digital transformation. In most cases, the executive who leads a digital project is the chief digital officer. They vigorously promote the company’s digital work to stakeholders inside and outside the organization, and guide management and employees through the entire process of change.
To interpret this important role, we collected and analyzed data from 211 digital leaders in manufacturing companies in Germany, Austria, and Switzerland, and explored the characteristics and success conditions of successful chief digital officers.
We found that there are four types of efficient chief digital officers, each showing varying degrees of success in different digital transformation environments. They are social and catalytic masters, in-house experts, innovation communicators and icebreakers.
The first category: social and catalytic masters. They lead digital transformation by supporting the innovation of others and creating a working environment that fosters creativity. They have a diverse network of interpersonal relationships within the company and strong interpersonal skills. They are not personally completing digital innovations, but helping companies tap the creativity of employees and managers and promote their implementation.
The second category: internal experts internal experts also have strong interpersonal skills, their network is mainly within the company. However, such chief digital officers also possess deep strategic business knowledge and IT knowledge. They either innovate in person or provide advice and guidance to other innovators.
The third category: innovation communicators innovation communicators promote digitalization by directly participating in innovation initiatives and projects. They lack a strong technical background, but have a deep knowledge of business and economics. In the four types of chief digital palace, their external connections are the largest.
Fourth category: Chief digital officers such as the Ice Lone Ranger can be called top experts in digital technology, and often directly participate in important innovation projects. However, their social awareness, interpersonal influence and network management ability are relatively poor.
The study found that social and catalytic masters and in-house experts can be effective in many different organizational environments. The only situation that is likely to be detrimental to social and catalytic masters is that when facing high pressure from external competitors, the strategic decision-making authority is too low.
For innovation communicators and icebreakers to be effective, organizations must empower them to make decisions and involve them in strategy development. Both types of chief digital officers promote digital innovation through hands-on efforts, but there is a key difference between them: innovation communicators can be effective in low-pressure environments, and the icebreaker can be strong when the company faces external high pressure. Promote digital transformation.
There are four types of successful chief digital officers of Alexander Fliaster. They have their own advantages and contributions in different environments.
In the past 20 years, digital technology has changed products, services and even the entire business model, including customer value proposition and value creation process. In many cases, in order to implement a new digital strategy, it is also necessary to change the business ecosystem, so coordination and cooperation within the company and with external groups has become a strong demand. As a result, the company began to explore the roles, responsibilities, attitudes and skills of digital executives, as well as the key factors that contributed to the success of digital transformation.
In most cases, the executive who leads the digitalization project is the chief digital omcer (CDO). Their main responsibility is to promote digital transformation, vigorously publicize the company’s digital work to stakeholders inside and outside the organization, and guide management and employees to complete the entire transformation process, thereby playing the role of chief transformers (transformers in chief). Scholars pointed out that in this role, it must be a multi-faceted leader who can connect technology with the market, organizational business model and culture. They believe that the key to this role is to guide the direction, which is to set the vision and goals of digital transformation.
To explain this important role, we collected and analyzed data from 211 digital leaders in manufacturing companies in Germany, Austria, and Switzerland, and explored the characteristics and success conditions of successful chief digital officers (see the sidebar “Introduction to Research”). Some of the issues we discussed are as follows:
·How does the chief digital officer play the role of digital innovator and support other innovators?
· In order to implement digital transformation, who are the networks they built inside and outside the company?
·What skills and expertise will they use?
In the form of a questionnaire survey, we collected data covering various types of information from digital executives of manufacturing companies in Germany, Austria, and Switzerland, including the interviewee’s personal background, skills, contacts, behavior, and working environment. When defining digital executives, we focus on the tasks they undertake rather than the titles, and identify the research subjects as the executives responsible for digital transformation. Similar to other current research, we use the term “chief digital officer” generically to refer to these executives, taking into account senior team members (including the CEO) and their direct reports.
We also asked these digital executives to provide background information about their respective companies and to evaluate the success of digital transformation. In the end, we collected data from 21 chief digital officers from companies of different sizes (mostly large and medium-sized companies with 100 to 5,000 employees) and various manufacturing industries. Among these people, 97 executives meet the standards we set for an efficient chief digital officer. This article’s research on four types of digital executives is based on them. In carrying out this research, we adopted a relatively new research method, the so-called fuzzy-setqualitative comparative analysis. The main advantage of this method is that it can help us analyze the complex combination of factors such as manager skills and professional background, rather than studying the isolated effects of individual factors separately. Using this method, we can paint a more comprehensive and more realistic image for digital executives active in different working and organizational environments.
·In different specific environments, which type of chief digital officer is best suited to leverage his strengths?
Four types of efficient digital executives in business organizations
We found that there are four types of efficient chief digital officers, each playing a unique leadership role in different digital transformation environments and showing varying degrees of success. They are Networker&Catalyzer, Insider Expert, Innovation Evangelist, and Lone Icebreaker. (See the sub-column “Four Images of Successfully Digitalized Executives”)
The first category: social and catalytic master The first type of successful chief digital officer we found is the social and catalytic master. They have three main characteristics.
First, they lead the digital transformation by supporting the innovation of others and creating a work environment that fosters creativity. Second, they have a diverse network of interpersonal relationships within the company, and high-level teams, middle managers, and ordinary employees are the objects of communication and contact. Approximately 70% of social and catalytic masters also make extensive contacts with people outside the company, such as customers, suppliers and consultants. Third, they possess strong interpersonal skills, treat others with sincerity and sincerity, understand others’ behaviors and motives, and influence and motivate others.
The contribution of social and catalytic masters to digital transformation is reflected in helping innovators and project teams overcome internal obstacles, advocate their ideas to other decision makers in the company, and strive for resources for the development and implementation of digital projects. They are not personally completing digital innovations, but helping companies tap the creativity of employees and managers and promote their implementation.
The second category: internal experts are similar to social and catalytic masters. Internal experts also have strong interpersonal skills and have extensive and diverse connections in the company. However, such chief digital officers also possess deep strategic business knowledge and IT knowledge. Their high-end capabilities and expertise are reflected in the fact that among this type of digital executives, more than 19% have a doctorate.
Compared with the other three types of digital executives, this type of chief digital officer has the longest average tenure in the current company (up to 16 years, compared with the average tenure of innovation communicators of only 9 years), while other employers and The industry has the shortest working hours. Therefore, it is not surprising that their interpersonal network is mainly limited to the inside of the organization. Internal experts are the kind of “locals” described by American sociologist Alvin Gouldner – highly loyal to employers’ organizations and tend to refer to the opinions of internal groups.
Internal experts rely on widely recognized expertise, use their own informal contacts and strong interpersonal skills in the company, or innovate in person, or provide advice and guidance to other innovators. Internal experts can explain the functions and applications of cutting-edge digital technologies in the business environment to employees and management, thereby reducing doubts caused by the lack of relevant knowledge, and promoting the adoption and spread of these technologies throughout the company.
The third category: innovation communicators are different from social and catalytic masters and internal experts. Innovation communicators promote digitalization by directly participating in innovation initiatives and projects. The chief digital officer of this type contributes to digital transformation by acting as a gatekeeper—introducing new ideas from the outside, challenging inherent perspectives and thinking frameworks, and redefining the company’s vision and its basic business logic.
The inspiration for creativity often comes from combining the knowledge of different professional fields in an ingenious way. In the career of an innovation communicator, about 58% of the time is working with other companies, and 47% of the time is in other industries. Therefore, they are fully capable of meeting the innovation challenges in digital transformation.
Innovative communicators lack a strong technical background, but are well versed in business and economics knowledge-80% of them are studying business management and economics, which is the highest among all types. Compared with the other three types of chief digital officers, they have spent much longer in finance or marketing and sales in their careers.
Thanks to excellent interpersonal skills, innovation communicators have all kinds of supporters and creative providers outside the company. Among the four types of chief digital officers, their external contacts are the largest, so they can widely absorb and reorganize a variety of different ideas, experiences and solutions, and most effectively promote digital innovation.
The fourth category: as much as 72% of the ice-breaking lone traveler comes from engineering and science. On average, they spend 47% of their careers in IT and infrastructure, 25% in research and development, and 22% in operations. In other words, such chief digital officers are geek executives who play around with bits and bytes, and can be called top experts in digital technology. Therefore, the icebreaker often directly participates in important innovation projects and plays a central role in large-scale digital initiatives.
However, the social consciousness, interpersonal influence and network management ability of the icebreaker are relatively poor. Although they have worked in the company for an average of 11 years, they have not established a complete informal network within the company (the name of “Lone Ranger” is derived from this). The lack of internal support is a fundamental difference between them and internal experts, social and catalytic masters.
Due to the lack of mature interpersonal skills, the icebreaker often uses other methods to promote digital transformation. Such chief digital officers act as defenders of innovation and company creativity engines. They design concrete and valuable solutions, and strive to urge others to achieve their goals, thereby contributing to digital transformation. Effectiveness in different environments
We speculate that these four types of successful chief digital officers may show their talents in different organizational environments. To confirm this hypothesis, we set two criteria: First, we considered the external pressure on the company and its digital executives currently undergoing digital transformation. This indicator reflects the degree to which the competitive digital products launched by established companies and market forces will challenge the company’s market position.
Second, we also consider the decision-making authority of the chief digital officer—the extent to which they influence and control the company’s affairs. We combined these two standards and designed a matrix containing four different scenarios. (See sidebar “Efficient Digital Executives in Different Working Environments and External Environments”)
We have found that social and catalytic masters and in-house experts can be effective in many different organizational environments. The only situation that is likely to be detrimental to social and catalytic masters is that when facing high pressure from external competitors, the strategic decision-making authority is too low. In the other three environments shown in the figure, they can rely on their main advantages, namely superb interpersonal skills, well-developed internal connections and diverse external connections, to provide strong support and promote digital innovators. Digital transformation.
Internal experts do not need to exert influence on the company’s core strategic decisions. They have valuable strategic business knowledge and IT knowledge, so they can contribute a lot to digital transformation, whether in high-pressure or low-pressure environments. When faced with huge competitive pressures, they will take a more proactive approach and personally embark on the implementation of innovative projects, rather than just providing advice and support to others.
For innovation communicators and icebreakers to be effective, organizations must empower them to make decisions and involve them in strategy development. Both types of chief digital officers promote digital innovation through their own hands: they personally participate in innovation projects and set the pace and direction for the company’s digital transformation. In order to succeed, they must hold high-level leadership positions with influence, control, and power.
However, there is a key difference between these two types of chief digital officers. Innovation communicators can be effective in low-pressure environments. They design and implement digital innovation with a forward-looking nature of change, advocate innovative ideas, and introduce new thinking frameworks for organizations. On the contrary, Ice Lone Ranger can succeed when the company is faced with external pressure and desperately wants to respond. As a hardworking innovator with high-end strategic business knowledge and IT knowledge, such chief digital officers are likely to become self-confident crisis managers, regardless of employees’ feelings and concerns, and strongly promote digital transformation.
To adapt to the situation, not superhero
People often portray new digital executives as omnipotent superheroes, but we found that some meticulous insights can more appropriately interpret this key position.
Our data confirms that for digital transformation, contingency or situational law is still valid. Leaders’ skills and actions can play a vital role, but it depends on their environment (for example, facing different levels of competitive pressure).
All roads lead to Rome-that is, there are countless roads to success in digital transformation. We have discovered four distinctive images, or four elements composed of skills, behaviors, and connections, which can create a set of high-performance digital elements. It is neither realistic nor effective to appoint a know-it-all chief digital officer.
Some leadership methods may encounter risks in the long run, and we must be aware of this. For example, in times of high competition pressure, the icebreaker can become an efficient crisis manager, but their interpersonal skills are poor, too little interaction with others, and limited connections within the company, so their contribution can become sustainable problem. Therefore, the activities of digital executives as chief transformation officers should be studied in the context of change management to provide more guidance for practice.
We hope that these research results can help companies find out which type of chief digital officer they need, and help the chief digital officer to promote digital transformation more effectively. This article and future research will help companies and their leaders successfully address one of today’s most powerful and exciting challenges—business digitalization.