How to Choose the Right Digital Leader for Your Company

“There’s no question anymore if digital is the future. I think it’s clear to everybody. There is no resistance to move in this direction; it’s more how fast we can move.”

—Bart Leurs, chief digital transformation officer, Rabobank

Digital disruption is close to the top of the agenda in many boardrooms today, but who should lead the charge? Many companies are assigning the task to chief digital officers (CDOs). Yet, finding the right candidate is not easy and tenures tend to be short. Throughout late 2018 and early 2019, we analyzed the career paths of 508 CDOs, examined more than 1,000 survey responses from CDOs and other digital leaders, and interviewed 42 of them from across 28 countries and a broad range of industries to gain a better understanding of the position.

Our findings suggest that success in the CDO role is highly influenced by two factors: competence and credibility. Competence is an umbrella term for the combination of digital knowledge, skills, and experience. Credibility is the belief within an organization that a candidate can achieve the stated objectives.

Whether to hire a CDO from inside or bring one in from the outside is an important decision. Organizations often think that competence and credibility can best be combined in an external candidate. Out of the 508 CDOs in our career path data set, 70% were hired from outside the organization. For example, the CDO of German insurer ERGO Group said that he was hired specifically for his digital competence and experience, which the company thought would help build the initial trust and credibility required to do his job well.

But is it really that simple?

The relatively short average tenure of CDOs — a mere 2.5 years, according to our data — suggests that other factors are at play. Striking the right competence-credibility balance depends largely on how the role of the CDO is defined in a particular company. Indeed, we found that CDO roles and responsibilities differ widely among organizations. At one extreme were those that placed an emphasis on tactical areas like digital marketing or technology. At the other end were roles that described a cross-functional and rather ambiguous focus on digital strategy and transformation. Although external candidates can bring critical digital competence and experience to organizations seeking a better digital footing, they may struggle to build credibility for necessary organizational change.