The Chief Digital Officer is likely to own social, and IT

I saw a number of articles recently — and not just in HR magazines — suggesting that companies are moving toward a new C-level executive role joining the well-established CIO and CMO roles, and perhaps stealing their thunder: the Chief Digital Officer.

Kim Nash, Do Chief Digital Officers Spell Trouble for CIOs?

When consumers wanted movies, TV, music and other media to be online and on mobile devices, entertainment companies started recruiting chief digital officers (CDOs) to transform their businesses.

Now the brisk hiring of CDOs and similar executives in other industries, including manufacturing, retail, food and financial services, leaves CIOs wondering where they stand. Contemplate too long, though, and you could be sidelined.

Twenty-five percent of companies will have a CDO in two years, Gartner predicts. In the past year, the number of employment searches for CDOs in the United States has grown by one-third, says recruiting firm Russell Reynolds. Some CIOs will get the job, no doubt.

About 20 percent of CIOs have already taken on digital officer duties, according to Gartner. For example, CIOs at the construction company Brady Corp. and clothier Burberry recently expanded their roles that way.

In many more cases, however, the CDO is an executive from outside the company–and outside IT–who parachutes in at the behest of a CEO who is adamant about corporate transformation. Usually reporting to the CEO, the CDO gets the authority to rearrange staff and request funding to launch big plans.

In other words, the CDO is handed the keys to drive the change the CEO wants but isn’t getting from the established hierarchy. Which means the future that elite CIOs thought they had sewn up–strategy setting and entrepreneurship–could be stolen.

Not too long ago, I suggested that companies might need a C-level executive to drive social adoption, but I am now betting that will be the domain of the new Chief Digital Officer, and that the CIO will become a director-level job working for the CDO. And maybe marketing will as well. Why?

The inexorable transition from a performance-based IT strategy — where companies had an incentive to manage their own hardware and software, to get the biggest bang for the buck — has been inverted by the quantum shift to cloud computing, and the companies can’t really keep up with Amazon, and other ‘cloud center’ innovators’ capabilities in virtualization and power efficiency. The old data center is being dismantled. Likewise, the opportunities for cost savings and increased mobility around BYOD is also decreasing the central role of IT.

Instead of IT investments, the CDO will be focusing on people, not hardware, on social networks, not supply chains. Social, mobile, and new means to communicate with partners and customers will become the critical transition for business.