Why the C-suite must collaborate to drive digital innovation

Using disruptive technologies to rethink customer experience requires collaboration from CIOs, CMOs and CFOs to drive digital innovation.

CMOs: seeking influence on digital strategy

Today’s CMO wants greater influence on data strategy. To attain this, they need support from the CFO and CTO in the form of prioritized digital investments, allowing them to upskill the marketing function.

“CMOs have more responsibility for understanding digital than they did 20 years ago, when they may have been more focused on the creative for an ad,” says Emily Ketchen, Vice President and Chief Marketing Officer of Intelligent Devices Group at Lenovo. “We still have to evoke that emotion through creativity, to make sure we’re connecting with customers, but we also have to understand the technology.”

Despite this, marketing still relies on other functions to drive data/digital initiatives and must petition them for digital funding. Almost two in three (64%) marketing respondents agree that their finance peers find it difficult to accept the unplanned nature of marketing expenses.

When asked who should lead on digital issues, CMOs say the quality of customer data should be their responsibility, while CTOs and CFOs say that this should lie with the CTO. CMOs express frustration with their lack of influence over the business’s technology and data strategy and believe their ownership of customer data should give them a stronger voice.

CFOs: the shift to a VC mindset

Our survey indicates that today’s CFO wants to become an enabler of digital innovation, but 60% say this potential is not recognized across the wider business. At the same time, finance respondents admit they are grappling with the challenge of calculating digital value and risk.

“CFOs have to become more comfortable with venture capitalist-style funding models,” says Adrian Slobin, EY Americas Customer and Growth Leader.

“CFOs need to adopt the mindset of a VC exploring series A or B funding,” Slobin says. “It’s about experimenting and putting stuff into the world, some of which will work, some of which won't. In terms of digital marketing product and service innovation, this means leveraging digital to build and engage relationships with consumers. Experimentation is critical because the market is moving so quickly.”

While CFOs may need to become more comfortable with risk, Libby Hacker, EY Americas People Advisory Services Finance Leader, Ernst & Young LLP, explains that finance leaders are prioritizing upskilling to aid digital innovation.

“What we are observing is that a culture shift and skills upgrades are some of their [CFOs] top priorities. And when it comes to digital, it’s about upskilling people with the digital skills they’re going to need for the future,” says Hacker.

“Traditionally, finance’s role is ‘let's consolidate the data.’ We'll spend time pulling it together and then we'll hand it over to the business. Now we’re saying that we’re going to automate that. So, we need to re-skill ourselves to provide insights and be a more valued partner to internal customers in the business, to help them drive better decision-making,” says Hacker.

CTOs: pushing for change

The CTO is looking for greater collaboration from marketing and finance leaders to refine investment strategy across new and existing technology and, ultimately, to take a wider role across the business: 82% of CTOs believe, for example, that they should be more influential in enabling enterprise strategy. 

Nuno Leal, Senior Manager, Technology, Media and Telecommunications, Ernst & Young LLP, describes CTOs’ growing influence: “You see the CTOs and the chief product officers becoming super-elevated, very empowered,” Leal says. “Everybody knows that the business has to drive the change that technology enables.” Mike Kelly, EY Americas Finance Consulting Leader, Ernst & Young LLP believes that while CTOs should lead the way with digital innovation, collaboration is key.

“They [CTOs] should definitely be involved and should be leading that effort, but they need to take direction from the business. Otherwise, it’s investment money, IT money that’s spent that doesn't have the uptake, people don’t use the tools or it misses the mark,” says Kelly.

There is evidence that CTOs are pushing hardest for changes to ways of working, with 89% building cross-functional teams across marketing, technology and/or finance. The same percentage say they are refocusing business functions on the customer journey, compared to 76% in finance.

However, technology leaders also say they are struggling to prioritize investments and balance budgets across new and existing technology, while 60% say they are not consulted early enough in other functions’ technology decisions.

Understanding the unique challenges of digital innovation

Each function is calling for more involvement in digital innovation but must overcome specific challenges to achieve this.

CMOs need to work to ensure their function is digital-focused. Performance marketing relies on data and digital to operate and is, arguably, a different discipline from traditional brand marketing. The C-suite may need to be educated on the evolving role of marketing within their organizations and the increasing overlap with technology.

CFOs must become more comfortable with the risk and experimentation involved in digital innovation. Despite the risk involved in digital funding, CFOs are ready to embrace change; 82% of CFO respondents acknowledge they need to collaborate better with other functions to support their ambitions and 75% want to improve how they evaluate investments in digital.

CTOs must use their increasing influence to facilitate greater collaboration between functions. Despite wanting more of a say in shaping the wider corporate strategy, 31% of CTO respondents say that collaboration with other functions is the biggest frustration/challenge of their role.

For digital innovation to thrive, an understanding of these challenges must run through the C-suite, with senior executives pulling together to help each function overcome its issues. In this way, the business can move forward together on the path of digital innovation.

“Technology is not just something that’s in a back office or data center somewhere. It’s pivotal to corporate strategy,” says Liz Mann, EY Americas Life Sciences and Health Cybersecurity Leader. “To embrace change, to activate a strategy that includes digital technology and customer experience, every executive needs to start imagining the possible.”