Objective and main results

This study investigates how the decision to centralize digital transformation responsibilities (by appointing a chief digital officer - CDO) is related to transformation urgency and coordination needs of organizations.

Main findings:

• Transformation urgency – in the form of the dependency of the business model on information and knowledge and pressure from digital start-ups entering the industry – increases the likelihood of CDO presence.
• Coordination needs – in the form of high firm diversification and a lagging national digital infrastructure – increase the likelihood of CDO presence.
• The influence of coordination needs increases over time, whereas the influence of transformation urgency decreases. This finding suggests that accelerating benefits of CDOs might become less important as time goes by and society-level digitalization progresses, while those benefits related to coordination, are likely to increase.

Summary of practical implications

Managers concerned with organizational design and structure may learn from the study how centralization tendencies within their firm relate to internal as well as external factors.

Managers concerned with driving digital transformations may reflect on supporting measures, such as restructuring, change management, and training addressing and reprioritizing acceleration (responding to the transformation urgency) and coordination tasks over time.

While certain benefits of the CDO, those related to acceleration, might become less important as time goes by, others, those related to coordination, are likely to increase. The CDO’s tasks involving the necessary skill set may hence evolve over time, with the coordination tasks of CDOs gaining more relevance. Firms reflecting on a CDO appointment or re-appointment should therefore carefully assess the respective contextual conditions and then decide upon a CDO role with an emphasis on acceleration or coordination.