1.0 - "Rise of the chief digital officer (cdo)" (1 of 2)


  • Digital Transformation powered by the Internet's evolution

  • VC fueled disruption powering disruptive start-ups

  • Signal vs. Noise tech ratio and what really matters
  • Empire strikes back via rise of the Chief Digital Officer (CDO)
  • The "So what?"
    • What does a CDO look like?  What do they do?  How do they create value?
    • How does a company accelerate CDO value creation and the blueprint for transformation?


The challenges and opportunities facing businesses today are enormous.  The Internet has been around for approximately 20-25 years and is entering its 3rd phase, one that has transformative implications across the board as unprecedented amounts of actionable data is coming online and being made available for commercial use.

This new era of the Internet, where the interconnectivity that powered the creation of web sites (1.0) and then networked people via social media (2.0), is about to explode into the real-world by bringing the Internet and connected devices/systems into our everyday life (3.0).

For entrepreneurs, the opportunity is massive. Where Web 1.0-connected computers and their data and Web 2.0-connected people and their data, Web 3.0 is shaping up to be connecting just about everything else - things, plants, livestock, babies. Each new wave has spun out giant companies (Google and Amazon for Web 1.0, Facebook and Twitter for Web 2.0). Will Web 3.0 create a comparable pair of behemoths?
— "IoT Is Reaching Escape Velocity" via Tech Crunch's @mattturck

While some folks call this era "The Internet of Things", I won't get caught up in the name game but will instead keep this piece focused on the challenges, opportunities, the work and excitement ahead around unlocking the value created by Web 3.0.


"Organizations We Have Today Are Unfit For the Next Century" - Undercurrent CEO,  Aaron Dignan

Organizations and their existing infrastructure were built to succeed in an era that no longer exists.  As described succinctly and perhaps somewhat aggressively by the uber talented crew over at Undercurrent, the challenges faced by today's legacy business models are nothing short of monumental:

The organizations we have today are unfit for the next century. Rigid hierarchies, inflexible matrix reporting structures, meeting-rich schedules, and decision-rights for only the most tenured members - these “features” prevent any real work from getting done. - Aaron Dignan

It is against this backdrop that legacy business models are struggling to figure out where to even begin putting plans in place to start the digital transformation process.

Remember Napster and what happened when the music business went through its digitization period?

Remember Tower Records? 

How About Netflix vs. Blockbuster? 

Kodak or Polaroid vs.Instagram? 

Borders vs. Amazon?

AirBnB vs. the Hospitality industry? 

Uber vs. Taxi/Livery? 

Warby Parker vs. traditional retail eyewear industry?

Regardless of where you are on the Digital Maturity Index, please don't think that the Internet or the explosion in digital data is going to eventually "go back in the box".  The train has left the station and the questions isn't an "if you're going to do something", it's most definitely a "when and how are you going to do something".


"90% of the world's data has been created in the last two years ... the ultimate question is really what insight and value can we draw from that data" - Goldman Sachs Chief Information Officer, George Lee

Keeping in mind that technology and Internet enabled devices create digital data that can be quite useful when made actionable, consider the number of devices connected to the Internet by phase 1.0 (1B) and 2.0 (2B) along with the projections for phase 3.0 (28-50B+) to frame the significance of the data explosion that has only just begun.

Maintaining the Goldman theme, they've created a very elegant and useful infographic around the IoT.  And then there's what PSKF did on IoT which is looking pretty good too.

Bottom line, data has quickly become the world's most valuable resource and those companies that evolve their processes, organization and approach to harnessing the data driven opportunities will be those that thrive in the future.  Those that don't, well, not so sure I need to say what's going to happen to those businesses...


"Every company can and should consider itself a technology company. Capturing, analyzing and using data to inform overarching,cross-channel business/marketing strategies and decision making is a must."

We've entered into a time of historic opportunity with the associated challenges for legacy businesses who have found themselves caught flat footed while VC backed start-ups continue to introduce disruptive, web-based solutions that undercut their legacy product and service businesses by being smarter, faster and cheaper. Said differently, these companies are "born digital" where digital permeates their company culture and DNA without regard to legacy infrastructure, institutionalized thinking, inherited overhead and other strategic resource investments made prior to the landscape shifting so dramatically.

"Born digital" companies are fluent in the language of the modern digital landscape.  They don't require any resource bandwidth invested in trying to "get it" while legacy businesses do and are trying to figure out how to keep pace as the disruptive, "born digital" catalysts continue to blaze a trail that helps inform the transformational roadmap legacy businesses must now consider.


"It's Not As Complicated As Many Would Lead You To Believe."

Given the nature of Venture Capitalist's risk tolerance and importance of "betting big", some folks describe their portfolio theory as one more akin to "Portfolio Roulette" due to the fact that if they make 10 investments they typically expect 7 to fail, 2 to break even or have a modest exit and 1 to have a big exit which delivers the vast majority of the fund's overall return.  

I mention this because those super smart and courageous VCs and their portfolio companies are the disruptors that are blazing the trail for legacy businesses to inform their transformation efforts but it might make sense to reign in a bit of the enthusiasm around how "innovative" they are when it comes to applying their fundamentals to the real-world of legacy business model transformation.  Also, it's a solid segue to introduce the idea of "Signal vs. Noise".

"Signal vs. Noise" and the resulting ratio is a term often used in technology circles that effectively describes how much of an output is desired vs. how much is "noise" or outputs that aren't desired.  Because VC's make such high-profile investments and we have a cultural fascination with start-ups ingrained into our American Dream DNA, these efforts receive a disproportionate amount of media coverage and word of mouth buzz which makes what they're doing seem bigger than what it actually is.  Not that different from the way we perceive Sports and Entertainment due to the coverage of these industries.

In no way am I diminishing the value of their efforts and I have nothing but the utmost respect for those that have the entrepreneurial courage to do what they do but in the context of corporate strategy for Fortune 1000 businesses, this activity needs to sit inside the appropriate context. In addition, a whole lot of this action has been coming out of Silicon Valley where sometimes these "disruptive companies" are actually addressing "fake problems that don't actually create any value" that might be somewhat useful in SF or perhaps NYC but not for the mainstream and like chewing gum, the flavor will eventually run out and they'll be thrown away. 

This "group think" of Silicon Valley and other start-up ecosystems is absolutely necessary to allow the world's most ambitious and aggressive entrepreneurs to go big and eventually create companies that change the world but again, this activity needs to be put in context as it relates to legacy business model transformation.  Just as one would research best-in-class companies or best practices within an industry when performing the upfront due diligence ahead of strategy formation, that world needs to fit inside of that process but not dominate or have such an impact that it pushes the pendulum too far in the other direction where a company strays away from its core business in an effort to "reinvent itself".

To that end, here's a "Signal vs. Noise" punch list of 5 elements that all legacy businesses should incorporate into their north star as they move down the transformation path:

  1. Social Web + Digital Landscape Quotient of Senior Management + Company
    • Think of it as the solar system, you don't need to know everything about every star/planet but you definitely need to understand the pillars which include the main constellations  (i.e. Facebook meets Linkedin meets Twitter etc) and planets (i.e. Google etc), how they interface with each other and most importantly how people use them which delivers you to the implications for your business
  2. Not About Big Data, It's About Smart, Relevant + Useful Data
    • Capture it, harness it  and be sure to structure it so its useful and can inform all relevant internal/external efforts
  3. Network Your Business For Internal + External Benefits
    • Invest in the right modern technology, people and partners to essentially create a platform your business sits on that is the result of interconnected systems that talk to each other and allow you to maximize the value of the smart/structured data from #2 by being able to "put it in the machine" and unlock its true value
  4. Customer Experience Is The New Battleground
    • Whether your business is B2C or B2B, it MUST be invested in creating a customized, meaningful and valuable relationship between it and each individual customer as that's their expectation and the tech/digital tools are available and ready to go (i.e. Not using Responsive Design here on out is a wild idea)
  5. Reconsider Any Partner That Doesn't/Won't Understand Marketing Communications Convergence and Isn't Digital First, Channel Agnostic
    • Given where we are and where we're headed, this is table stakes and while I understand how much overhead and infrastructure many of these larger shops have in "doing things the way they have" but isn't that what this whole "transformation party" is all about?...sorry, it had to be said


With that all of that being said, it seems like a good place to hit the pause button to allow for a natural break separating Part I and Part II of this piece.

Part II of this piece will build off the background and context around the "Digitization of Everything" and dig into the "So What?" with some actionable insights:

  1. Rise of the Chief Digital Officer to accelerate transformation efforts
  2. What does a CDO look like?  What do they do?  How do they add value in real, practical terms?
  3. "Art of the Conversation" to Accelerate Transformation Efforts
    • Accelerating a company and CDO's digital vision and blueprint by applying strategic resources at the intersection of communications, marketing and business strategy to move faster and smarter
  4. Not Just Working Harder But Also Working Smarter
    • 5 practical ways to integrate digital thinking across the organization to unlock synergy and align the CDO's efforts more closely with enterprise KPIs

Please look for Part II next Tuesday 1/20.

Thanks for reading!


E: Alec.coughlin@sapientrazorfish.com; T/IG: @Alec_Coughlin