Insights
Perspectives
Perspectives
Highlights
- The digital redefinition of entire industries requires new roles and expertise at the top of large enterprises.
- CEOs should consider adding new roles to the C-suite including heads of data/analytics, digital transformation, customer experience, talent experience, and wellness.
- Companies that have done so, such as UPS, Adobe, and Royal Caribbean, are gaining vital knowledge at the top.
In this article
In this articleinpage
The big shift
For the last decade, there has been widespread adoption of digital technology by not just corporations, but also by their stakeholders—employees, customers, partners, regulators and the public at large.
Viewed from above, the digital transformations that business leaders have been investing in for years are a subset of changes that envelop us, as ubiquitous as the networks, software and apps that accompany us through our days.
The shifts prompted by the digital world—all these new ways of producing, getting, spending and operating—demand new skills, technologies and capabilities. For many companies, they also require new management capabilities and new leaders to oversee them.
Many other changes have been wrought by the global pandemic. For example, as employee and customer health, always important, has become even more of a focus in today’s turbulent environment, Tyson Foods and Royal Caribbean Cruises recently added the relatively new role of Chief Medical Officer to their respective C-suites.1
This kind of move is just the start, as the spread of the COVID-19 pandemic has accelerated the digitization trend. Consider the urgency of overseeing new technologically-driven business processes, from “lights-out” factories to reinventing how companies close their quarterly books.
A need for new C-suite capabilities
It’s clear that making sure the company is properly leveraging new capabilities, while responding to customer, partner and governmental needs, will require a reinvention of the C-suite itself. This may mean adding new responsibilities to C-suite jobs already in place, or creating novel C-suite roles, like Chief Medical Officer.
The traditional organizational structure of large companies, in which work is divided between departments (sales, marketing, R&D, supply chain, finance, HR, etc.) is being challenged by digital technologies that foundationally alter and ignore boundaries and are optimized for integration, creating new capabilities and possibilities. That integration calls for a reinvention of both the way we think of work and how we manage it.
It also argues for the reimagination of existing C-suite roles and duties, including (but not limited to) the CEO, CFO, CIO, data and digital officers, heads of R&D, talent recruitment and retention officers and more. Leadership teams that determine now what must happen for these new capabilities to be managed well, which new or expanded roles are needed most at the top and how to assure that the executives who take on these roles and responsibilities will be positioned for success.
Forward-thinking companies have been creating these new roles for some time.
The Chief Experience Officer, for example, both for internal and external customers, came into being a decade ago. In 2010 Wayne Peacock, currently CEO and president of financial services and insurance firm USAA, had it as part of his portfolio as EVP, member experience.2
Many companies have long viewed innovation, particularly technological innovation, as requiring a C-suite leader. And, as roles expand, the boundaries between functions tend to blur and blend, as was the case last year when Sam Deshpande was named Chief Technology and Risk Officer at Humana, where he now oversees the IT organization in addition to risk management and compliance.3
Firms find themselves caught short in key digital capabilities: customer experience (a complicated and interconnected discipline), supply chain management (where speed and flexibility are essential), production facilities (where organizations must simultaneously rethink how they can safely and productively deploy workers on their shop floors while accommodating and leveraging increasingly necessary robotic automation) and many others.
Indeed, a survey of 287 executives at global companies conducted by TCS this summer found that only a quarter reported having their key digital capabilities in place. Only 25% could claim an end-to-end digital customer experience, and only 24% had an installed artificial intelligence analytics capability to improve it. Less than a quarter (23%) possessed highly- automated core business processes, and just 21% had key digital ecosystem partnerships in place (see Figure 1).
Digital capabilities of companies
Developing and implementing these advanced digital technologies quickly and effectively needs to be driven from the top of the organization, and by individuals with the requisite knowledge and experience. But many of these capabilities are new; they go beyond the experience and skill sets of many people in traditional C-suite roles. It is not surprising that a 2019 EY survey of 200 CEOs from large companies around the world found that almost three-quarters (72%) were considering adding to or changing C-suite roles.4 The new capabilities they believed would be most critical to growth over the next five-to-10 years and required focused C-suite leadership were digital transformation, artificial intelligence (AI), data science, innovation and behavioral science. Four out of five of these CEOs had already created new C-level jobs, including Chief Digital Officer, Chief Data Officer, Chief Ethics Officer and Chief Growth Officer. (Chief Innovation Officer, a position virtually unheard of 20 years ago, can now be found at 29% of Fortune 500 companies.)5
Indeed, many believe the CEO’s job itself has become too big and requires a rethink. One former CEO called for the creation of a “chief of staff” to “better handle the information flow necessary for a CEO to succeed,” and pointed to how well this position has worked at several companies.6
The Pandemic Accelerates a C-Suite Rethink
On the ground level, it has become increasingly obvious during the pandemic that companies must find ways to make it easier for remote workers to collaborate as efficiently, productively and cost-effectively as possible, which implies upping their data management game and making their data flows accessible across all environments and structure types. This, in turn, means deploying systems that enable visibility in response to changing demand across the global supply chain, while automating responses with AI and analytics to minimize the need for human intervention, both for reasons of safety and risk mitigation. And, of course, this radical automation and increased accessibility of data demands enhanced security for the cloud-based systems that undergird it all.
The urgency has heightened the need to reexamine how best to lead organizational change and transformation.
Today, agile companies in all sectors are resetting strategies while making wholesale changes to their operations to leverage digital technologies.
Examples are prominent in health care. Pharmaceutical firms racing to find, test, produce and distribute a COVID-19 vaccine are testing new technologies and processes on the fly to learn how to recruit patients, conduct global trials and gather data for regulatory bodies safely, accurately and remotely, even as regulators promulgate new rules of the road.7
But the illustrations extend to every industry. Banks are transitioning to remote sales and reaching out to customers digitally, offering new payment and loan plans. In health care, physicians are diving into telemedicine, and insurance companies are broadening their reimbursement policies to include it. In retail, grocery stores are shifting to online ordering and delivery as their primary channel. Manufacturing companies are pushing to develop new products and services (especially those that use digital sensors to track performance in the field as part of the Internet of Things) as a recent survey found that 75% of consumers who have used digital channels for the first time during the pandemic say they will continue to use them when (as everyone hopes) life returns to some semblance of normalcy.8
Today, agile companies in all sectors are resetting strategies, making wholesale changes to their operations to leverage digital technologies.
Inside Your New C-Suite
With a focus on capabilities required to profit from emerging digital ecosystems, corporate leaders should begin a review of their C-suite needs by assessing the emerging functions critical to their continued success at both the business and technical levels. In some cases, they will see an opportunity to adjust existing roles with new responsibilities and overseeing new capabilities. In other cases, they will find a need to create a new office entirely.
Based on this assessment, companies can create new responsibilities with accountability. These could be new C-suite roles, if there is sound justification for them, or an expansion of existing roles with new areas of functional focus. We believe that there are roles that every large company should consider adding today or making part of the responsibilities of an existing C-suite officer. These could include:
Chief Data Officers have become relatively common in companies that sell digital goods and services, especially in the financial services sector, telecommunication, media and professional services. Now data has moved to the heart of almost every business, as the pandemic underlines the importance of managing digital operations and creating resilient supply chains. Effectively, this signals the start of a second generation for the position. Since cybersecurity is paramount in a world that is increasingly doing business online, and there are compliances and privacy regulations around data, Chief Information Security Officers have also emerged as a C-suite member.
Richard Wendel, a member of MIT’s International Society for Chief Data Officers, maintains that a CDO needs both knowledge and understanding in three areas: the business domain, data technology and AI. When CDOs do not succeed, Wendell says, it’s because they “check only one or two of the boxes.” 9
Many business functions that are crying out for automation and the application of advanced technologies are being held back by leaders without the requisite technological experience or expertise— which is one argument for the creation of a Chief Transformation Officer role. For example, every company’s Finance & Accounting function could profit from implementing AI, but their CFO may not be the person to lead the effort as it requires business process automation (to eliminate data entry error), analytics mapped to desired business outcomes, agile methodologies—all part of business transformation.
Last year, UPS appointed Scott Price as Chief Transformation and Strategy Officer. In his new role, Price is leading an office that consists of corporate strategy, a transformation office, back office, mergers and acquisitions, a strategic venture fund and advanced technologies including drones, robotics and automation. “The pace of change around the world is disrupting everyone, which calls for the transformation office,” he says. “Transformation is the mechanism in which you support the pivot in your corporate strategy to apply costs from one area in your business to support growth in another area.” 10
The pace of change around the world is disrupting everyone.
Both the internal and external customer experience has been massively affected by the COVID-19 pandemic. Remote workers need both technological and emotional support as they transition to a new way of working, and so do customers as many navigate a new and unfamiliar online market.
Ideally, the employee and customer experiences should align, facilitating a back-and-forth between employee and customer that can boost communication and thereby morale (internally) and sales (externally). A Chief Customer Experience Officer manages both, reinterpreting the customer experience for an entirely digital world and making sure employees are trained and equipped to provide the experiences customers demand, need and deserve. Doing so increases employee engagement and creates a competitive advantage for retailers, media (as it moves from broadcast and exhibition to online streaming) and others. Indeed, customer experience has moved to the center of marketing.
Even before the pandemic hit, a Forrester study found that 76% of executives said improving the customer experience was a “high or critical” priority.11 More recently, the TCS CMO 2019 study found that companies that were leaders in digital marketing had C-suite leadership that spanned marketing, sales and the post-sale experience.12 A true Chief Customer Experience Officer would oversee both disciplines, including elements of the CHRO’s responsibility.
For example, at Adobe, Donna Morris, EVP Customer and Employee Experience, made sure employees heard from customers directly, thereby informing employee- customer understanding while enhancing employee engagement. Indeed, armed with this understanding, employees were able to create tools to better serve customer needs. That, of course, led to greater customer engagement.13
Before the pandemic, employee reviews were conducted face-to-face. Today, most of those meetings occur virtually, as do team meetings, town halls and just about every interaction that not so long ago may have been taken for granted but were, in retrospect, critical to accomplishing an organization’s work. Consider the tasks involved: Managing all those virtual communications and making sure that they are productive; ensuring that the organization’s workflows are not disrupted even as employees come and go; and learning new skills, technologies and modes of operation. The collection is a lot to put on the CHRO’s agenda, especially if the office is striving to be more digitally sophisticated.
Imagine a Chief Talent Experience Officer combining (or complementing) the role of CHRO with expertise in implementing and managing digital work environments that foster collaboration among employees. An environment that strengthens employee morale and engagement (creating a positive, self-reinforcing culture that becomes an asset for talent recruitment and retentions). Indeed, it has been understood for years that organizations that demonstrate strong employee engagement produce better business outcomes, treat customers better and are more likely to stay with the company than those who are less engaged.14
The pandemic has complicated the entire area of employee recruitment and retention, which is why even appointing a Chief Talent Experience Officer may not fulfill all of an organization’s needs in this new and still evolving environment. With the accelerated move to remote consumption and remote work, and the continuing automation of back offices and factory floors, it may be wise to think about a Chief Reskilling Officer position that can take on the task of assessing what skills an organization possesses, what skills it lacks and how that gap can be bridged. Dedicating a leader to this role, working in tandem with the Chief Talent Experience Officer (or creating a position that encompasses both) could help companies deliver optimal training to those workers that need it and can best use it. Some have proposed that companies create “talent hubs” for designing and delivering training and managing people as they transition to new roles.15
As we’ve seen, Tyson Foods and Royal Caribbean have installed Chief Medical Officers. Of course, both meat processing and cruise lines have been massively affected by the COVID-19 pandemic. It makes sense. But even in sectors where employees and customers are at much less immediate risk, it remains true that we are living in a highly connected world in which extremely contagious diseases could emerge at any time, and many believe the frequency with which they do will only increase in the years to come, creating new extremes of human and business risk. The C-suite could use an officer whose job is to monitor those risks and mitigate them—a Chief Health, Wellness and Safety Officer.
Responsibilities for such a position could include planning for how a company should organize shifts in the case of a disease outbreak; monitoring the wellbeing of workers at scale, including employees working from homes in a broad geographic area, creating business continuity and recovery plans from a health perspective and setting up early warning systems to provide critical intelligence when a crisis is impending.
Even when there is not a crisis, the strains of working from home for months at a time are still being discovered and dissected. A wellness chief could follow the science and implement new ways of dealing with that stress, making sure workers adopt good habits and have the support—physiological and psychological—that they need.
Dr. Jonathan Ripp, Chief Wellness Officer at the Icahn School of Medicine at Mount Sinai Health System in New York, along with other physicians, has suggested that a wellness officer should encourage “system-wide changes,” with “the authority, budget, staff and mandate to implement an ambitious agenda.”16
Next Steps
The new and/or expanded roles a company needs at the C-level will depend on its unique circumstances and its long-and-short term objectives. Is your workforce primarily remote? Are you delivering digital products and services, or do you need to begin doing so? What are your current digital strengths? Your weaknesses? Where can you improve most quickly and effectively?
Once leaders determine the need for new C-suite roles, it’s critical to define the parameters of the new position, marking its responsibilities and boundaries. It’s also important to communicate that both to candidates for the job as well as up and down the organization to get buy-in at every level and ensure healthy relations among C-suite colleagues.
Finally, if a company decides to create one or more of these new positions, it must track their performance.
Many businesses have already revamped their processes and discovered new efficiencies as they have sought to adapt to the COVID-19 pandemic and major changes in the way business is conducted. In this period of transformative change, it makes sense to reassess how an enterprise operates, which C-suite offices deserve a rethink—and which new offices can benefit the organization’s present and future development and growth.
In this period of transformative change, it makes sense to reassess how an enterprise operates.
Citations
1 Wall Street Journal, “Covid-19 is Elevating New Type of Executive: Chief Medical Officer,” August 10, 2020. https://www.wsj.com/articles/covid-19-is-elevating-new-type-of-executive-chief-medical-officer-11597051800
2 Forrester, “Conversations with Chief Customer Officers: USAA’s Wayne Peacock,” February 15, 2011. https://www.forrester.com/report/Conversations+With+Chief+Customer+Officers+USAAs+Wayne+Peacock/-/E-RES58710#.
3 Humana, “Human Management Team Members Tim Huval and Sam Deshpande Assume Additional Areas of Responsibility,” October 7, 2019. https://www.businesswire.com/news/home/20191007005238/en/Humana-Management-Team-Members-Tim-Huval-and-Sam-Deshpande-Assume-Additional-Areas-of-Responsibility
4 EY, “Has Your C-Suite Changed to Reflect Changing Times?” September 24, 2019
5 HBR, “What Kind of Chief Innovation Officer Does Your Company Need?” November 11, 2019. https://hbr.org/2019/11/what-kind-of-chief-innovation-officer-does-your-company-need.
6 HBR, “The Case for a Chief of Staff,” May-June 2020, https://hbr.org/2020/05/the-case-for-a-chief-of-staff.
7 Clinical Research News, “Technological Ways to Make Clinical Trials Really Global,” April 3, 2020. https://www.clinicalresearchnewsonline.com/news/2020/04/03/technological-ways-to-make-clinical-trials-really-global.
8 McKinsey, “The COVID-19 recovery will be digital: A plan for the first 90 days,” May 14, 2020. https://www. mckinsey.com/business-functions/mckinsey-digital/our-insights/the-covid-19-recovery-will-be-digital-a-plan-for-the-first-90-days.
9 Forbes, “Rethinking the Role of Chief Data Officer,” May 22, 2019, accessed at: https://www.forbes.com/sites/insights-ntelai/2019/05/22/rethinking-the-role-of-chief-data-officer/#5636baed1bf9.
10 Medium, “UPS Chief Transformation & Strategy Officer Scott Price,” May 27, 2020, https://medium.com/@michael.wishart1990/ups-chief-transformation-strategy-officer-scott-price-9a180893619f.
11 Forrester, “CX Predictions for 2019: Delivering Value Through Voice of Customer,” December 6, 2018, https://usabilla.com/blog/forrester-usabilla-webinar-2019-cx-predictions/.
12 TCS, “2019 CMO Study,” https://www.tcs.com/perspectives/articles/cmo-study-highlights-the-initial-findings.
13 HBR, “Why Every Company Needs a Chief Experience Officer,” June13, 2019, https://hbr.org/2019/06/why-everycompany-needs-a-chief-experience-officer
14 Gallup, “4 Factors Driving Record-High Employee Engagement in U.S.,”, February 4, 2020, accessed at: https://www.gallup.com/workplace/284180/factors-driving-record-high-employee-engagement.aspx
15 HBR, “It’s Time for a C-Level Role Dedicated to Reskilling Workers,” September 3, 2019. https://hbr.org/2019/09/its-time-for-a-c-level-role-dedicated-to-reskilling-workers.
16 Neurology Today, “Meet the Wellness Officers—What They’re Doing About Burnout,” December 5, 2019. https://journals.lww.com/neurotodayonline/fulltext/2019/12050/meet_the_wellness_officers_what_they_re_doing.11.aspx.
