Insights

CDOs: Lead by Design.

“Design’s job is to help the company make sure that it’s always thinking about its long-term impact on people.”
- Katie M. Dill, vice president of design, Lyft

In 2012 only 12% of major companies reported having a CDO, a statistic that dramatically rose to above 67% by 2019. A ‘CDO’ stands for a Chief Data Officer, yet there’s a rival job role vying for the acronym: Chief Design Officers.

Given how much important data has been given Chief Design Officers may still have a long way to go before conquering the acronym, yet we believe it is a role that simply shouldn’t be overlooked.  

For the purpose of this insight, we will be referring to the design discipline whenever using the abbreviation.

A CDO is responsible for overseeing all innovation and design aspects for their company’s services and/or products. This incorporates multiple important areas such as graphic design, UX/UI design, product design, industrial design, package design, and even architectural design. Some companies utilize these individuals further by giving them valuable jurisdiction over various marketing, advertising, or engineering functions within the organization.

Interestingly, in a 2019 McKinsey survey of 200 heads of design and 100 senior executives, it was found that fewer than half of design leaders felt that their CEO fully understood their role. Furthermore, only a third of CEOs could accurately and confidently state what their CDOs were accountable for. This lack of clarity about the role was further muddied by only one in ten CEOs noting that their CDO played a meaningful role in strategic company developments. Meanwhile, only one in six of the CDOs felt they were positioned in such a way to deliver their full potential value to the business.

It is precisely this vagueness that makes the CDO position so fascinating for modern-day business. If it can be proved to be an important role within the company hierarchy and can be assigned due support, assets, and responsibilities, then surely businesses can reap an advantage over such disarray reported in the McKinsey survey.

Building the Case.

In 2014 William Barnett wrote a piece for the Economic Times arguing that managers needed to adopt ‘leading by design’ rather than ‘leading by example'. He pointed to a silicon valley example in 1993 whereby a talented team led by Bruno Delean (FITS, a software startup) tirelessly worked with Delean at the helm—yet ultimately burned out without a lasting legacy. Meanwhile, a team across town known as Seagate Technologies were able to champion leading by design to embody a powerful business model able to adapt and expand to the changing digital world.

Leading by example is commendable and certainly builds respect, general morale, and shows teams the way forward. This style is built on authenticity, mutual respect, and turning words into action but it ultimately has some limitations.

When leaders turn to design as a driving factor, they are able to change structures, routines and culture to a large extent. Being able to innovate masterfully helped Seagate Technologies to discover the unknown—and pioneer novelty.

This practice was especially advantageous in tumultuous times, which is why it has yet again emerged as a fascinating business approach. In 1992 the internet boomed and changed the business landscape at an unprecedented speed. Then, the economic recession of the late 2000s caused severe headaches for even the most established businesses. Now, reacting to the global pandemic, businesses are scrambling to recalibrate their business practices towards any potentially stable models.

Curiously, Barnett argued that great leaders do not typically have good track records for predicting the future. He points to Google, Apple, and Facebook, as examples of unexpected success stories filled with unfulfilled business predictions by their commanding officers.

This is where leading by design becomes the catalyst, as the modus operandi is not pretending to know what is coming—but rather knowing how to discover new possibilities and effectively adapt to whatever is thrown at us.

Challenging the status quo.

Returning to the 2019 McKinsey & Company survey, we discover that companies that excel in growth through design are able to increase revenue and shareholder returns by almost twice the rate of competitors and industry peers.

The survey created a ‘McKinsey Design Index’ (MDI) survey tool to assess how seriously and effectively companies were considering and adopting the best design practices. They found that roughly 90 percent of companies simply weren’t achieving their design potential—even if they’d brought in senior design roles.

The aforementioned lack of clarity and assigned responsibility certainly contributed to such a high figure for poor performance. So the question emerged, how can CDOs make a meaningful impact at a company?

By assigning senior design roles to your company hierarchy, you’re instantly showing a positive commitment towards the power of leading by design. This should be followed with a three-pronged approach:

Firstly, the rival CDO (data) role should vitally assist design. Teams should ensure they’re making the most of any available data, both qualitative and quantitative, to put metrics in place to measure business performance. This data can also be used to create incentives in place to motivate desirable outcomes, such as enhanced customer satisfaction.

Next, the issue of having a CDO (design) and CDO (data) should not be solved by removing the ‘C’ status from your design professional. It is imperative that the design officer is embedded within your senior C-level management team and that they’re given due respect and responsibility. Design leaders can only be such if they are given the freedom to lead, and are given respect by their senior peers.

Our third point is based on strategy. CDOs should champion human-centric strategies, and be able to get the entire C-level team on board with this approach. While it is easier to imagine the positive benefits of putting customers first when designing or tweaking products and services, it is equally important to consider internal operations and reimagine the company structure and culture in a way that holistically benefits the business trajectory.  

By following these three steps, a business can aid its CDO in launching a human-centric strategy that puts customers and team members at the center of all company decision-making. This commitment becomes a catalyst for reactive decision-making to ever-changing markets and ensures the business can navigate through surprise variables.  

As a general summary, the combination of quality analytics and insights with thoughtful design thinking and methodologies will transform the culture and mindsets of the C-level team whilst filtering down this approach throughout the entire organization—when executed efficiently.

Overcoming stereotypes.

Whilst this discussion may seem mildly high-level, it’s important to note the difficulty organizations may have when discussing ‘design’ in itself.

The typical, and most rudimentary perception of design is to focus on aesthetics and form. By this, we’d imagine colors, shapes, materials, and tangible objects or images.  

Yet, the process of leading by design should not be diminished to such simplistic views. The next viewpoint of design focuses on the overall end-to-end journeys and experiences that consumers and team members face. For example, a product manufacturer should not only focus on their product looks—they should influence how potential buyers perceive their company, from every stage of the customer journey.

[BOOKMARK TO CUSTOMER JOURNEY INSIGHT].

Another way to look at the journey mapping is to assume that ‘everything is marketing’. This viewpoint forces you to look deeper at every touch-point and optimize experiences and assets to greatly benefit your overall brand and business. As such, being all great marketing is great design—ergo, design is (and should be) infused in every aspect of business.

Tangible examples.

To illustrate our train of thought, we believe we can pick any potential business operation and enhance it with thoughtful design.

For instance, with an extremely high number of businesses having to find a way to manage their team virtually and remotely due to the COVID-19 pandemic, there have been a high number of operational issues to address. While some teams may attempt to recreate the office environment with excessive zoom calls or incessant check-ins and status reports, other businesses have thrived by developing beautiful workflow solutions. As an example, a number of project management tools and collaborative software tools have enabled team members to operate with transparency, accountability, and importantly with harmony to each other.

A CDO would examine any operational step and ask if there was a more eloquent way to work. As another example, imagine the process a customer may go through when cancelling a membership. Perhaps they’d log on to the brand’s website, search for a fairly subtle contact section, fill out a mandatory form detailing their reasons for leaving, before finally being transferred to a virtual call or chat box to confirm their request with a team member. The arduous process could be tedious (perhaps on purpose) and leave a sour experience of the brand. A CDO may investigate the process and develop a UI solution that shows dedication and attentiveness to the customer, with potential upsell opportunities to retain the customer.

These considerations neatly lead us to our next point, that leading by design helps frame strategic business questions.

Strategy.

Strategy is a high-level discussion topic within itself, and any strategy without CDO input is likely vulnerable to potentially disastrous flaws.

[BOOKMARK TO STRATEGY INSIGHT]

The typical CEO, COO, and CFO, do not bring the interns or new recruits into the highest level of decision-making discussions. These C-level individuals typically also tend to lean on experience and an aged education, meaning that strategy-making discussions from any business degrees they may have may actually be fairly dated. Whilst this accusation may seem blunt, it is reflected by every withered framework developed in the 90s and early 00s that unfortunately introduces cognitive biases into the company processes.

At some point, someone needs to ask ‘why do we do this the way we do?’ and ensure that ‘because it’s how we’ve always done it’ is not an acceptable answer. Left unchecked, subconscious biases will dramatically undermine the strategy-making process. Think of how ridiculous it would seem to run a modern-day major company with the standard marketing and operational practices of the 80s—prior to the internet and digital era dramatically changing opportunities.

In tandem, relying on older methods of decision-making is to downplay any market disruptions or new methodologies. Those that champion design are able to harness the latest and greatest approaches to gain a competitive advantage.

As an example of such an advantage, a CDO of a food company may have noticed the rising expectations for sustainability and social responsibility that generation Z has led. Their work with research and development, and their marketing team(s), could work on upgrading the companies internal processes and output to ensure that they became an industry leader for such CSR values. Being able to anticipate market shifts such as this, and adapt at speed with consumer behavior changes, gives a company an immediate slipstream to grow at speed while competitors scramble to catch up.

The CDO Role.

Our discussion may appear to be centering the CDO as one of the most important individuals in any organization, but by all means, we don’t believe that they should be the sole source of understanding and innovation.

In her book, ‘1000 things every designer needs to know about people’, Susan Weinschenk, guides the reader through vast tombs of insightful human-centric insights that can help shape better decision making. These decisions are not all front-loaded within the design process, but also are applicable to how marketing and research & development teams should approach their work.

When human-centric design is made universal in a company, it elevates pressure on seniority to identify all potential pain points within important (or seemingly trivial) business discussions. So, perhaps the CDO should therefore ensure they take leadership seriously within their role—as teaching holistic approaches to their team can ensure more robust thinking and strategic operations.

It is on this point that we find it useful to highlight that a CDO’s role should not be seen purely as executional, as their higher level thinking and input can influence a positive trajectory for the company. When giving such importance to an individual we thusly believe they need to be equipped with sufficient status to unblock problems quickly and have adequate respect and accountability amongst leading peers—meaning that they should report directly to the highest level of management when possible.

To support this claim, we’d argue that each level of management brings their own opinions, biases, and motivations to their decision making activities. Therefore, for every individual above the senior company designer, the design perspectives can be altered and diluted—or worse, ignored outright. For example, if the CDO reported to a head of marketing then the marketing leader may find their background to regularly present directly opposing ideas from the CDO’s human-centric ideas. This clash could incentivise the marketing leader to protect their own influence and pride, therefore not including the CDO in important meetings in case they slow down decisions with contrasting suggestions.

As such we believe the reporting structure for a CDO will reflect their potential at a company.

Responsibilities.

If we are to argue for such seniority and responsibility for CDOs, then we need to be prepared to designate enough responsibilities to allow them to lead by design.

Giving your CDO a mandate and authority to deliver on improving customer-experience allows them to work efficiently without having to navigate lengthy persuasive decisions with the internal bureaucracies existing in a complex company structure.

Here are some suggested responsibilities to encourage CDO success:

Firstly, as their focus is so human-centric, this can begin with the internal teams. Involving the CDO in HR activities can be beneficial, such as final interviews or prospective hiring test assignments. A great leader can shape their team, but it would certainly help speed the process up if they’re involved in picking the team in the first place. We believe one of the most useful hiring skills can be to identify the potential culture-fit of a prospective hire—i.e. Will they fit into the structures and positive mindset your team has created?

Secondly, being able to provide keen input and leadership with various operational processes is an invaluable responsibility. Design leaders can optimize customer-centric practices and introduce the best design tools to solve complex problems intelligently. Once again it is important to state that design thinking is useful internally too, especially by onboarding the C-level team with innovative practices and a growth mindset.

Leading on to this, the customer focus certainly should involve a strong input on overall the user experience. CDOs can analyze existing customer experiences and outcomes while tweaking future processes to build consistent design standards that achieve better results in line with the business strategy.

Role Summary.

In a nutshell, the above thinking may lead to a CDO job description looking similar to the following:

  • Improve internal processes through design.
  • Map out ideal customer personas alongside the marketing department.
  • Identify unmet customer needs via detailed research.
  • Create, and/or strengthen the product and/or service strategies for the business.
  • Keep track of KPIs and monitor the company progress towards strategic goals, in reference to design-related metrics.
  • Lead piloting, testing, and development/scaling of prototypes.
  • Lead product/service launches.
  • Continuously measure product/service success, and provide refinement when necessary.

Further to these tasks, a CDO would likely be responsible for multiple decision making tasks or generally approving the work of less senior teams and individuals. This may include:

  • Concept designs.
  • Prototype designs.
  • HR materials relating to design practices, training, and onboarding.
  • Hiring functions such as test briefs and final interviews.
  • Productivity management.
  • Skill development activities.
  • Design department evaluations and well-being activities.

Metrics.

To summarise our thinking, we’ll cycle back to the initial acronym clash whereby the Chief Design Officer and Chief Data Officer seemingly compete to be the CDO norm.

Data shouldn’t be discounted, and it is a core topic for the success of a Chief Design Officer. Our assertion that CDOs are so useful would be meaningless without sensible ways to track their success and contributions to organisations. So, there needs to be clear metrics put in place to determine whether your CDO is delivering effectively in their role.

McKinsey and Company reported that only 14% of the companies in the 2019 survey were setting quantified targets (such as KPIs or objectives and key results) for their CDOs.

Without measuring results efficiently, companies can quickly veer off-course without realising whether their strategy and tactics are truly performing as planned. Great metrics will allow CDOs to manage their work, and that of their team(s), in real-time whilst also potentially presenting arguments for increasing assets and investment for their work—to fast-track growth and success.

Three typical metrics spring to mind as the golden standard for measuring success:

Firstly, financial metrics are unsurprisingly a useful tool that most CFOs, CEOs and stakeholders will likely focus on immediately. By tracking sales volumes, for example, companies can monitor the (hopefully) positive impact that the design decisions have had.

Secondly, looking more strategically or holistically, operational metrics can indicate public perceptions objectively. These statistics might focus on such factors as ‘churn rates’ (how many customers stop using or buying the product/service on offer) or ‘adoption rate’ (how many new customers the business acquires). These measurements can be particularly helpful for long-term strategy whereby initial financial considerations are expected to be offset by future success and market positioning.

Thirdly, businesses can monitor the subjective opinions to gain insight into customer or team emotions, satisfactions, and overall feedback on any output influenced by the CDO. This can be a great way to determine how likely customers are to refer friends and family to your product(s)/service(s) and aid efforts to grow your loyal customer base.

While these three metric categories offer some clear guidance, it is worth highlighting that due consideration should be given to your metric choices. There needs to be a balance between giving CDOs and designers enough design/innovation freedom and overall creativity whilst focusing work on internal goals and industry benchmarks that make sense against current market trends.  Both the C-level team and the design team should be aligned with the metrics, agreeing that the chosen metrics can help point the organisation towards the most valuable conclusions.

Final thought.

Leading by design can be a powerful approach for lasting success. By empowering talented individuals equipped with HCD knowledge and strategic expertise, businesses can commit to future-proofing operations and their mandate for innovation.

To truly achieve such lofty impact, design leads need to be given serious accountability, responsibility, and importantly-trust. A CDO role puts design at the top of a company hierarchy as you can’t steer a ship from below deck.

Leading by design need not be a replacement for ‘lead by example’, in fact, we believe teaching design thinking as a core company principle will empower and harmonize your whole organization rather than just the output.

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