Objective and main results

This article investigates the emergence of the chief digital officer (CDO) position, potential variations of this role, and the conditions under which firms choose to have this position.

Main findings:

The results show that while the majority of CDOs are generalists, about 25% of them are domain specialists. Important factors that influence decisions to have a CDO include performance, strategic leadership, task demands, task environments, and mimicry behavior. For example, the results indicate that

• The need of a CDO appear to be informed by specific topline (sales) task demands rather than because of bottom-line (profitability) performance conditions in the organization or industry.
• The board of director’s composition, as reflected in its age characteristics, is associated with structural choices in large public organizations. The average age of the board of directors as well as the board’s age diversity are negatively related to CDO presence.
• The CDO is used as a complement to, rather than a substitute for, the CIO. The findings suggest that CIO presence increases the likelihood of CDO presence.
• Organizations with higher levels of organizational complexity are more likely to use a CDO to tackle task demands associated with digital transformation.
• Organizations facing greater task demands in externally-oriented functional domains, such as those related to customers and marketing, are more likely to use CDOs than those facing more internally-oriented task demands.

Summary of practical implications

The decision to have a CDO is an important choice for large organizations, and several factors should be considered when assessing the need for a CDO. Not only broader strategic and structural factors, such as the performance conditions and firm size, should be considered, but also more specific factors, such as board characteristics and whether a firm already has a CIO position.

The CDO position is not uniform across organizations but rather diverse; there are different facets of CDO titles and roles with different foci and responsibilities. When thinking about the creation of a CDO position, knowing the different facets of the CDO role will allow practitioners to familiarize themselves with the range of options they have concerning this position.

The study suggests that organizations not only need to make a decision about having a CDO or not, but also about how to define the CDO’s interfaces within the firm. The study indicates that organizations need to pay particular attention to the CDO-CIO relationship. Organizations should consider the complementary nature the CDO and the CIO, especially the task division and interplay between them, when designing the CDO position.