In today’s tech-orientated climate, companies are transforming their business models, operations and cultures in order to keep pace with technological innovation and consumer habits.
Many businesses are creating roles such as the chief digital officer, sometimes the chief customer or experience officer, to oversee this wholesale transformation.
Despite the rising profile of the CDO and the CDO strategy, there are still some in the industry who doubt the need for the latest addition to the C-suite.
The argument is moot for pureplay digital businesses. Facebook or Google do not need a CDO strategy for example.
Travelex however, the foreign exchange company headquartered in London, had waited for its new digital change agent with baited breath, according to its CDO himself, Sean Cornwell.
“The company and the people, I think, were waiting a long time to invest heavily in [digital] here. They were waiting for someone to come in and lay out a strategy and a vision of where Travelex needed to get to.”
In fact, despite the fact that a digital strategy should fully understand the current company before it proposes any changes, his advice is to “start with people.”
“The first place you have to execute is with the people, the talent. You have to build up those capabilities, put the right people in place and place them around the right structures with the correct methods and modes of working. Crucially, you should make sure that they are receiving the right rewards and incentives, because they’re the people that will drive the change.”
It is because of these considerations, and others, that many companies have now recognized the need for such company-wide road maps that digital executives can produce.
The CDO strategy provides an organization with a blueprint with which to measure its digital progress and is a useful tool for framing its vision coherently and highlighting areas for improvement.
Cornwell used his to start his role with several questions he would ask himself and Travelex.
“Where are we taking the business, what are the opportunities or challenges? Where should we invest?” he lists.
These sorts of questions force a company to understand what operations need to change, how its culture can best foster a digital environment, and what objectives they want to achieve.
The process is also entirely iterative, according to Cornwell: the CDO strategy is having to constantly change its angles depending on what it discovers about a company at any given time.
Cornwell fixated on a small number of key elements that Travelex wanted to build upon and scaled the digital roadmap from there.
“For us, it’s about looking at how customer behavior is changing, how the organization as a whole needs to adapt to a digital landscape, and what the growth opportunities are in the short, medium and long term?”
Cornwell’s strategy then turns these initial questions into actions.
“Do you try and evolve current IT platforms, for example, into something other than what they were designed for? Or do you start afresh given the opportunities you’re going after, building the technologies using, agile, cloud-based, development?”
This ‘evolve or create’ debate that digitization has fast-tracked, has companies questioning the value of their legacy technology.
Cornwell and his CDO strategy has struck a balance at Travelex by introducing a two-tier infrastructure approach – two distinct stacks separating legacy and new tech – in order to manage his digital strategy better, without losing any of the potential value still remaining in the financial services company’s legacy systems.
Although this allows Travelex to organize its structure more efficiently, there are elements to digital transformation that cannot fit into discreet sections and requires more sweeping changes, as Cornwell discusses.
“We are driving cultural change through the business, because when people talk about digital transformation, what they’re really talking about is an entire business transformation – the plan won’t work with some [digital] people in a corner.”
He describes how the mentality of a company must change if it is to fully digitize on top of building new skills and capabilities within the workforce.
For the change to be sustainable he argues, organizations need to revert back to their road map and initial questions to understand how they should make that mind-set leap.
In Travelex’s case, its CDO stratgey wanted the customer to be a core feature of the company’s structure.
“For us, it’s been about moving from a transaction led business to one led by the customer. In other words, where we know our customer, we can have a deep and engaged relationship with them and can personalize our interactions to make each task as relevant as possible, on whatever platform they engage on.”
What Cornwell wanted to avoid was a situation whereby people interacted with Travelex occasionally, and were treated like a new customer each time because there wasn’t a smart system in place to recognize the history of their relationship with the company .
It’s what Cornwell calls “making a switch” – a company wide switch that is.
Depending on the organization, its size and its sector, the process may take several months before any real change can be initiated.
From the outset, however, the CDO strategy must be clear and compelling when required to report back to the board of his or her progress.
For such a long term transformation, measuring success can be complicated for this new executive role and in Travelex’s case, a combination of factors provide Cornwell with its success or failure indicators.
“If you are [measuring success] from a purely ROI basis, it’s going to be a long-term payback which may often be in enterprise value rather than simple EBITDA ROI; you just have to be very clear about what you’re trying to achieve.”
Success comes in many forms however, be it in the form of new customers won, or sustaining deeper relationships with your consumer base on newer, digital platforms.
Whatever the objective, the CDO strategy will need to put in place the relevant metrics to measure success throughout each stage of the digital transformation, and Travelex’s CDO believes you should go one step forward and combine different KPIs to get the best results.
“You really have to think more widely than the traditional measures of success”, he concludes.