(aka, So You’ve Just Hired a Killer Chief Digital Officer — Now What?)
This article was first published in February 2017 in “Strategic HR Review,” but remains more relevant than ever today for companies continuing their digital transformation journey in the world of COVID-19.
You can hire the greatest (and most expensive) technology resources on the planet, but unless you set them up to succeed, they are doomed to fail you.
If 2016 was the Year of the Chief Information Security Officer, then 2017 has already shown itself as the Year of the Chief Digital Officer. Companies across all verticals woke up to realize that they were in the process of being disintermediated by West Coast technology players, from Google, Uber, and Amazon to Facebook and Apple. Boardroom conversations were all about the need to make a play in technology, and CEOs, CHROs and heads of Talent all began having serious discussions surrounding the need for a Chief Digital Officer and how they could get their hands on one (whether or not the company needed this role has been discussed in a prior piece entitled “The Rise and (Impending?) Fall of the Chief Digital Officer.”).
Innovation centers have begun popping up across the world, and highly skilled engineers and scientists are now tasked with creating new ways to evolve old businesses. This inflated demand focused on a fixed supply of technical talent has led to skyrocketing compensation and brutal competition for talent, with companies now asking themselves, “What did we get ourselves into?”
At the same time, newly minted Chief Digital Officers have found themselves in new, often strange, and overly ornamental and nonfunctional environments. In an attempt to fit the image of innovation, old line businesses have ripped down their tall grey cubes, purchased a lot of glass dividers and painted every wall bright blue. However, looking past the bells and whistles, the one thing they forgot to create was a true technical environment conducive to innovation.
On more than one occasion, the feedback that I have received from new Chief Digital Officers was, “Man, these guys have the best intentions, but they thought that the simple act of hiring me would cause money to fall out of the sky.” Another executive shared, “On a good day, I spend 20% of my time focused on working around a broken IT environment in order to deliver on the technical or product promises I made to my company.” In this example, if you are paying your Chief Digital Officer $1 million, you might as well throw $200,000 of that out the window.
In reality, most old-line companies moving toward a model of innovation have been and will continue to be ill-prepared to absorb the very talent they try so hard to recruit.
According to Shadman Zafar, Managing Director and Head of Digital Product at JPMorgan Chase, and prior Chief Digital Officer at Barclays, “Chief Digital Officers are hired to transform a business as perceived by its customers. However, it is not about a clever design of a specific product that makes the sweeping difference but the way a company works to broadly listen, react, innovate and operationalize its products and services.”
How to Set Your Chief Digital Officer Up for Success
For a Chief Digital Officer to be successful, the person needs to build an organization of highly tuned, niche industry players that can focus on two distinct outcomes:
- Innovating to create new products, services and/or business models and…
- Getting products to market at an ever-increasing rate.
That said, most companies do not realize that, without an IT environment that can support this model, the technical talent responsible for developing products for end customers are doomed to fail.
But what can CEOs, CHROs, and VPs of Talent do to mitigate this risk?
Enter Workplace-as-a-Service & People Technology
By hiring expensive tech talent, often in the form of a Chief Digital Officer, many companies are playing checkers and not chess, reacting to market dynamics instead of focusing on long-term company strategy. However, there is still an opportunity to get this right and realize the value of a big, and often public, investment.
Creating new products and customer experiences is the sexy part of what companies do. The critical, yet often neglected, components of a business usually sit behind the scenes.
Every company, regardless of size, has an individual or organization designated to support its employees’ technology needs. This function comes in all shapes and sizes, but for simplification-sake, I will put them into three buckets – 1) IT support, 2) outsourced IT and 3) workplace technology. Let’s look at each in depth:
- IT Support. In this scenario, a company creates an organization to set up an IT environment that responds to issues that arise in this environment. Incentives for the organization are tied to fixing problems fast, which is inherently reactive by nature. This group usually falls under a CIO focused on cutting costs, and in the worst-case scenario, sits under finance. If there is any innovation in this function, it is for the purpose of resolving issues quickly to reduce cost. I call this the Heisman strategy, as I picture IT giving employees the stiff arm at all costs. Don’t feel bad if you fit in this bucket – this is where most companies sit.
- Outsourced IT. If you are operating here, you are in serious trouble. Think of the message you are sending your employees. I care so little about how you spend your time that I won’t even invest in captive resources to learn your workflow in order to support you in doing what I ask of you. If this is your environment, your Chief Digital Officer and innovation office is doomed to fail.
- Workplace Technology. I like to call this function “People Experience,” as it creates an environment that is thought through, proactive and in place to enable employees to do what we discussed earlier… innovate and get product and services out fast in order to beat the competition. If enough thought is put into such an environment, bucket 1 (IT Support) does not even need to exist since employees rarely run into hurdles and if they do, they self-heal, or the employee can resolve the issue on his or her own.
An environment focused on People Experience also delivers a direct and higher ROI on talent. Imagine if your employees could be 20% more productive. What would that do to your ability to compete in the market? Companies across industries are quickly finding that this type of investment not only helps them compete but hits both the top and bottom line quickly.
Finally, in this scenario, employees feel supported and therefore more engaged. They are more productive, therefore making more money for the company. They are less likely to leave, increasing morale and decreasing turnover costs. And if you have a company full of millennials, you pretty much cannot compete without creating such an environment, since employees are now more motivated by purpose than anything else… and what better way to help them achieve (and worse case, not impede) that purpose.
Only by creating a sophisticated Workplace Technology function can an organization truly embrace the opportunities of a truly global, all-digital and agile workforce. However, there are many landmines along the way to creating such an organization.
Common pitfalls in hiring a Workforce Technology leader
Too often, IT roles are viewed as less strategic than technology roles touching products or direct revenue generating roles such as sales. Because of this, business leaders are often less critical in their IT hires. As Zafar so aptly notes, “Without the right talent in place to help transform the workplace tools, systems and services, the challenge of Chief Digital Officers can become a non-winnable battle against Business as Usual.”
When assessing a head of Workplace Technology, beware of the following four profiles:
The TacticianCompanies with an unsophisticated technology infrastructure often look at IT executives like their cable repairman – someone that can fix their problems. Remember, your head of Workplace Technology is an executive first, and a technologist second. Therefore, this person needs to be able to deliver a vision of where they want the business to go and then work backwards, laying out the tactical initiatives that need to happen to get there.
The Utopian VisionaryIn a previous article entitled “10 Ways to Nail the Most Strategic C-Suite Hire” (Doonan 2016), I warned clients against “the flash” of the highly visionary CIO. The same is true of the Workplace Function, for similar reasons. First, be careful not to bite off more than you can chew. An executive coming in with a vision and agenda that is just not consumable by an organization will not work. Second, and specific to Workforce Technology, the executive needs to be close enough to the end user to really understand a particular persona’s workflow (described above). The executive that paints an amazing vision but is out of touch with reality on the ground will not gain the trust of the organization.
The Tool BeltI’ve had many clients get excited by a candidate that is a savant at solving a problem that is particular pain point, such as “collaboration” or video conferencing, that a company is currently experiencing. While this individual can sometimes solve a short-term need, he or she is rarely able to see the big picture, connecting the dots to understand user personas and provide long-term solutions on a broader scale.
The Prima DonnaPerhaps the worst profile of all, this IT executive has had the top job (perhaps CIO) at a smaller company and is willing to “take a step back” to get into a larger organization, often with the goal of being the successor to the CIO. I’ve seen executive recruiters use the “successor card” as a carrot to attract such an individual. However, Workplace Technology is more than a full-time job. Executives preoccupied with obtaining broader scope fail to gain the trust and confidence of the organization, and usually leave the organization worse off than when they entered.
How to choose the right Workforce Technology leader for your business
In building out a high-performance workplace services organization, there are four specific attributes to look for in a leader of this group.
One that has great instincts for understanding different employee personasAn employee in finance has a very different way of achieving a goal as compared to a salesperson. Only by truly understanding the purpose and context of the person’s role (or group of individuals, known as a persona) can a technology executive create a process and later the tools to help that individual get where they need to go. A great workforce technology leader listens, observes, and above all has empathy for each employee and his or her unique business needs.
A maniacal focus on end user experienceStrong workforce technology executives are obsessed with the end user experience. They are able to not only address employees’ IT needs but also enable them to be more productive in the workplace and actually enjoy interacting with this technology as they would at home. In fact, the best CDOs I have seen aim to create a worker experience that is even better than a consumer’s experience in a personal setting.
The change management skills to drive change in a legacy environmentWe all pay for the sins of others. Employees are wired to fear change. Only a leader that shows empathy for the plight of the employee will gain their trust to the point where they can impact the end user experience.
A natural chess playerThe best Workplace Technology executives that I know are business leaders first, technology leaders second. They have a natural ability to stay ahead of the business, automating processes and building for scale. Think of companies like Amazon and Capital One. They focus on serving employees before they encounter issues, and sometimes are even able to turn internal facing tools into outward facing, revenue generating products!
There is no one-size-fits-all approach, and I find that the framework below is a useful tool in helping my clients map candidate profiles to the company’s need and tolerance for risk.
So now you know:
The emergence of the Chief Digital Officer is fast tracking the evolution of old industries as they compete in a tech-first world. However, without creating a proper support function, many CEOs, CHROs and Heads of Talent will find themselves cleaning up a mess rather than basking in the sun of a digital transformation. Being able to spot what type of workplace IT executive fits your company, along with having the right expectations and support in place for them to be successful, will allow you to have happy, more engaged and more productive employees for years to come.