CDOs Are Reaching New Heights — and Quickly

There aren’t a lot of chief digital officers around, but the position has already become something of a springboard to a chief executive or president’s title.

There are at least seven recent moves by a chief digital officer (CDO) into top management slots. Mostly, people shift from one company to the next, a la Michael Bloom (@Michael_Bloom), who was CDO at Wenner Media and is now the CEO at Guardian News and Media, NA, or David Cautin, the former CDO at NYSE Euronext, now CEO at kgb, a directory service company. People also move up the ladder in their own company, like Paul Gunning, who was a chief digital officer at Tribal DDB and global CDO for DDB and is now the CEO of DDB Chicago.

Given that there were only 75 CDOs in 2011, having several of them move into top management positions so quickly might seem surprising. It might also reflect title inflation: would DDB Chicago have had its own CEO a decade ago? But David Mathison, who is tracking the rise of the chief digital officer through his firm, says it reflects the digital reality of business today, and the needs businesses have for blending digital and business savvy.

“When you look at their backgrounds and skill sets, they’re coming up from entrepreneurial and managerial backgrounds,” Mathison says.

Now, keep in mind that Mathison, founder of the Chief Digital Officer Club, is also helping to create CDOs. His company not only does research on the position, but also runs recruiting searches for companies that want to hire CDOs. Mathison says that hiring has picked up this year, to the point where a new CDO is named almost every business day. He thinks there will be 500 CDOs worldwide by year’s end.

The growth is scattered, but much of it is happening in Europe. Mathison says that’s because European companies are catching up to their U.S. counterparts; prior to this year, 88% of the CDOs he was tracking worked for American companies. Another 7% were in Europe, and the remainder in Asia. Mathison says the European Union is also pushing a digital agenda, as part of a drive to increase entrepreneurship.

While some of the businesses leading the way in creating CDOs aren’t what you might expect — Starbucks was an early adopter — most CDOs work at companies connected closely to content. Mathison says 40% of CDOs are in advertising, another 15% are in publishing and the same at media companies. Mathison says this is probably being driven by the extent of digital disruption affecting content-related businesses. The biggest sector for other sorts of companies are non-profits, as well as government organizations.

Despite this concentration in content, Mathison says there are CDOs in every industrial sector. The industries moving slowest to adopt the title are insurance, banking and pharmaceutical companies. Most American CDOs have profit-and-loss responsibilities and significant business experience, but in Europe many CDOs are being hired who are in their 20s. Mathison speculates that European companies may be seeking people with a deep understanding of social media.

While “digital” is in the title, Mathison says that the position is not a technical role, but a business role. That said, he expects that many companies will put former CIOs in the CDO role, especially CIOs who’ve worked at consumer-facing companies. This reflects in part prominent successes achieved by former CIOs in operations roles, like Stephen Gillett (former Starbucks CIO, Best Buy president and CDO, and now COO at Symantec), Stephen Laster (former chief information and technology officer at Harvard Business School, now CDO at McGraw-Hill) and Mark Dearnley, the former Vodafone CIO who is CDO and CIO at the HMRC (Her Majesty’s Revenue and Customs, the UK’s Internal Revenue Service).

Mathison, predictably, expects to see good things happen for new CDOs. “These people — if they are successful — will probably be running the show in three to five years. I’ve been surprised at how quickly it’s happening.”