For example, the CDO of MediaPub 2 describes how the digital department is organized with a cost ... That's weird, and people have to get used to that, and you ...
* Forthcoming at Journal of Information Technology
Digital Innovation and Institutional Entrepreneurship: Chief Digital Officer Perspectives of their Emerging Role* Table 3. Three Approaches for Navigating Tensions in “Digital” vs. “IT” Logics of action Grafting Definition
Outcomes
Drawbacks
Grafting enables the digital initiative by tightly linking these new practices and capabilities with an existing functional unit.
New digital practices in several departments, teams with mixed competencies acting towards a common goal
Cost intensive, time consuming, the “digital” unit acts against its core identity – create new value streams, direct impact, experimentation
Bridging Definition
Outcomes
Drawbacks
Bridging involves establishing links between existing functional units to achieve a new digital initiative.
Triggers restructuring of existing executive roles and thereby a new collaborative working mode, overcomes silos
Initial power struggles, temporally limited
Decoupling Definition
Outcomes
Drawbacks
Decoupling describes how new digital initiatives are separated and insulated from the existing functional units to achieve a new digital initiative.
Fast execution of the digital logic, easy identification of members with the goals
Lacking integration with existing structures, no sufficient consideration of existing IT governance policies, culture of “lone warriors”
(1) Grafting enables organizations to embark on new digital projects by aligning those projects closely to existing organizational functions. In a sense, this involves aligning and incorporating the two units to work together in a way that accommodates the institutional logic of existing units with the emerging digital logic of action of the CDO. For example, the CDO of MediaPub 2 describes how the digital department is organized with a cost reduction focus to avoid competition with the other departments for the budget and establish transparent distribution of responsibility: “[We are organized as a cost center], and this is one of the very important things […] because in this business, if I would have been a profit center or managing a profit center with digital activities, then I think from the core business […] I would be seen as a competitor. There would be no incentive for them to change the core business […] because then their logic would be, "Now digital, it's with the CDO, so
Page 1 of 7
* Forthcoming at Journal of Information Technology I don't have to do anything with digital because it's his job. If he fails, it's not my problem (CDO, MediaPub 2).” The main idea is that the other departments “pull” the services from the digital department – the CDO group supports them. This may seem very similar to the usually depicted role of the IT department. However, the team is infusing the “digital” logic to many areas of the organization through temporarily tightly coupled activities of the digital team with other teams in the organization. The CDO applies “digital” methodological frames while working with many diverse functions such as the IT department, editorial teams as well as the management board. These new activities involve agility, multidisciplinary teams, digital content creation and others. Gradually, the core activity in the editorial teams, has also changed significantly. The creation of editorial content is accompanied with principles for reusing data and also using a diversity of tools to report the stories in an interactive fashion: “Then there's the editorial teams, of course, that I also work with, and I try to hand them all kinds of tools that they can use to actually change the way that they do reporting. I help them to point out tools where they can build an interactive story fast and easily, help them to work with data journalism, if I see a data set that has become available that's something that they can leverage to build a new story (CDO, MediaPub 2).” This tight linkage goes in both directions – not only does the digital organization accommodate elements of the existing functions, but it also works to incorporate its practices within those functions. Often this process is accompanied with hiring new employees that have certain digital competencies. For example, the CDO of a bank described the new requirements that where more aligned with the “digital” logic: “In the operations group or what's now the customer experience group, we're changing the way we recruit, we're changing what we expect of people, and we're changing the overall skill mix of that group.” (CDO, FinancialServ 3) This can result in a blend between existing and new principles reflected in smaller teams, mixed competencies: Page 2 of 7
* Forthcoming at Journal of Information Technology “We create a team to work on those projects, so we call those squads in the same way that Spotify uses that term. What we do is we create that central team of skills from the organization (CDO, ForCitizens).” Grafting requires a long term vision, that can result in fundamentally different modes of work, as organizations reconcile multiple logics of action. For example, the CDO of a media and newspaper company mentioned that the pace of work is no longer “to the hour” as in traditional print news. Content is produced for various channels and the organization needs to approach this strategically: “Basically, you are publishing news all day, so you don't have this process where you are working towards one time of the day where everything needs to be ready. That's weird, and people have to get used to that, and you need to start thinking about what you are going to break on your website and what you want to have in your newspaper (CDO, MediaPub 2).” Despite the benefits of laying a solid ground for more long-term success in transforming the organization to incorporate more digital practices, some CDOs also describe how a typical “digital person” perceives this pace as rather slow and traditional: “Exactly. To me, it's always slow, because I'm a digital person and it's always too slow. (laughs). But at the end of the day there's no discussion on the need, but they [the other departments] don't feel it as urgent as I think it should be on a day-to-day basis (CDO, RetailOrg 1).” Grafting is but one way that CDOs enact their role with respect to existing organizational functions. (2) Bridging involves tactics to span two or more existing functions. In contrast to grafting, bridging involves reconciling logics in a way that does not blend or merge those logics, but instead focuses on linking distinct organizational units, yet maintaining that distinction in the respective domains. In cases of bridging, it is often the CDO function itself that acts as a boundary spanner between two other domains – such as between the CIO (or CTO) and CMO. For example, the CDO of ArtRelated 2 explains how there is no solid line between the activities of these executives and how they need to work together:
Page 3 of 7
* Forthcoming at Journal of Information Technology “… chief digital officer is kind of that bridge between the two [i.e. IT and Marketing], and if they start working well together, then your role goes away because both of those people are highly digitally capable, but they don't need the intermediary anymore (CDO, ArtRelated 2).” During bridging the CDOs act as a lynch pin. This is how the CDO of an educational organization explains the role as linking the core process and the IT department. In this case, the core process is related to communication and the IT department takes care of the infrastructure: “I'm really a lynch pin between the two. There's someone whose job it is to do public affairs and communications […] also inbound communication. We are in the media every minute of the day. If seventeen similar organizations could be questioned about issue X, our organization will lead the story in the New York Times. So, one department is focus is much more media relations and inbound. […] while IT, their focus is very much on infrastructure and security (CDO, HighEd 2).” Another CDO of a media company describes a similar situation in which the established relation with existing chief roles is crucial: “That's pretty much my responsibility. I have a commercial responsibility and an editorial responsibility, but the journalists are reporting to the Editor in Chief and the sales reps are reporting into the Chief Commercial Officer. I have a small staff who's running the websites and doing digital projects, but I'm very much relying on other chief roles’ people.” (CDO, MediaPub 1) In a temporal sense, once digital practices are enacted by the other departments, the need for the CDO role may vanish, as this was emphasized in a number of interviews: “I see myself as a transitional figure that maybe the term Chief Digital Officer doesn't exist in ten years when everybody has become digital, but, right now, the role is to push things forward and make sure that our knowledge of the latest things happening within digital are internalized within our company. The journalists, they work full time producing content, sales reps work full-time selling ad words and ads. There's really nobody who's having the look on our future business models. That's the role I have now.” (CDO, MediaPub 1) Page 4 of 7
* Forthcoming at Journal of Information Technology However, as was also emphasized during many interviews, the bridging role emerges because it is difficult to change what existing units have historically done. In some organizations this is deemed “impossible”: “The best you can do is to say, all right let's talk marketing or let's talk communication or let's talk strategy. What is the digital aspect of your profession? An idea that you transform everyone and make them understand what Twitter is about is just silly. It's not silly. It would be great but it's just impossible.” CDO, Manufacturing 5) Thus, some bridging CDOs think of themselves as translators: “There are some people now saying, and they might be right, that you'll never be able to get rid of the bridge between IT and the business because you always need a translator. Maybe digital will always be that translator because IT guys speak a certain language, and marketing guys speak a certain language, and when you put them in the same room they really don't understand each other. They really don't. You might always need these digital people in the middle to do that translation and to be that interface. I really don't know how it will turn out, we'll have to see, but there's definitely those 2 paths ahead.” (CDO, HealthRelated) Some of the CDOs, however, described neither bridging nor grafting practices in enacting their roles. (3) Decoupling refers to buffering or isolating digital initiatives from other existing practices. This mechanism may allow CDOs to establish a “second speed” IT function by keeping the emerging logic separate from the existing ideas about the IT organization. Often it was due to the nature of traditional industries where the IT function was especially slow and supportive of the core business: “Because traditional IT organization in our structure was absolutely not able to take some projects and deliver in a very fast-pace, with some small budget, on-time and agile and do it and redo it and so on.” (CDO, Manufacturing 2) This approach requires less integration in the beginning to enable a strategic view for digital initiatives quickly. The new digital organization functions like an island of start-up activity in the mist of the existing
Page 5 of 7
* Forthcoming at Journal of Information Technology IT organization. Organizations where decoupling was the predominant approach showed some evidence of deeply entrenched oppositional logics. For example, the CDO of FinancialServ 2 described how decoupling removes the tension between the established and the new function: “On the IT side, I think, you can take two routes. One is you try and transform legacy, so all the legacy, IT and infrastructure, you try and transform it. I mean, that's really, really hard, and most companies fail if they try to do that because it takes so long, and it is so enterprise level. Or you can set up a build, a separate, twin, parallel IT structure, and you just leave the legacy to be, you ignore it. You simply build something separate anew as if you were a start-up, just build a completely parallel, new infrastructure. By doing that, you remove a lot of the tension between digital and IT and the need to transform the technology and the ways of working that exist in IT (CDO, FinancialServ 2).” This approach aims at speeding up the innovation lifecycle because the CDO does not have to face restrictions that are inherently a part of traditional established organizations. The digital function became an alternative to the IT function for rapid-development projects: “The first six months, I was to structure the web, add a new portal, destroy some sites, adding something more organized, branded and so on. Right after, it came quite obvious that a lot of demand came to my office for different things. Of course, social media, media monitoring, digital marketing, any type of application that the typical IT could not be able to provide. The business unit find quite rapidly that they have a lot more services going through my service instead of going to traditional IT (CDO, Manufacturing 2).” However, after reaching some key milestones, merging the new and the old becomes a relevant question: “From a product perspective, we have driven and launched two new mobile apps. We've launched [...] the most disruptive play against banking [...] went straight to the top of the app stores in [European country]. We've launched them this week, it was launched on Android this week – the money app, which is another mobile money app we invented [...] There's a lot of different stuff that we have done and now
Page 6 of 7
* Forthcoming at Journal of Information Technology we're really thinking about how we put a digital transformation into the rest of the organization” (CDO, FinancialServ 2) CDOs who chose to decouple their units initially also needed to recruit relevant digital capabilities. Members of the newly established decoupled digital unit can easily identify with the startup mode of working and pace of innovation. However, this approach often creates the identity of “lone warriors” which may prove to be difficult to sustain on a longer term, particularly as digital capabilities need to be infused into other organizational units.
Page 7 of 7
