Kellie made an interesting comment the other day. She observed that sustainability feels like the new digital... The story of the Chief Sustainability Officer mirrors the emergence of the Chief Digital Officer years ago.
Somewhere around 15 years ago, major corporations noticed that the Interwebs were really taking off, and the odds of it being a fad were waning. Some businesses (notably media) felt the pinch and pressure more than others. At risk of “not getting this digital thing”, executive teams expanded to include a new role focused on solving the digital riddle that the new world order presented.
The Chief Digital Officer.
Voila! Companies now had an expert to shield them from missing out on digital, and they could go back to their regularly scheduled programming. And that’s exactly what happened. Most of the executive team just ignored “Digital” until an announcement or startup emerged and a wave of fears about missing out crept in anew.
In fact, most CDO’s were left to their own devices to build a P&L, leveraging the mothership brand in the new domain. Successful CDO’s generated more P than L. Less successful CDO’s left the entire organizations wondering why on earth so much attention and cash was being focused on the digital distraction.
I was a CDO for 8 years. In 2008–2010, I managed to build a respectable digital business, at times despite of the rest of the organization. In 2011, the company brought in a new leader who understood the importance of digital, and demanded it not be treated as a sidecar. He gave digital true standing among the executive team and held leaders across the company to goals and targets around digital.
It was an important moment that has happened in other companies too. It changed the way the company competed digitally, and it changed the scale of digital outcomes. Digital became a meaningful part of the expectations of every executive… The entire executive team became contributors to and drivers of digital success.
As that played out the need for a separate CDO diminished. It became part of the enterprise corpus. Digital was folded back into every part of the organization as an operating expectation, versus a separate operating executive.
I suspect we’ll see CDO roles slowly disappearing across the board over the next 5 years. I have a lot of friends who are CDO’s, but it may be a decent investment strategy to back companies when they fold the CDO role into standard operations! (Assuming the signs of truly having internalized digital are evident of course.)
The emergence of the Chief Sustainability Officer is playing out as a very similar story to that of the Chief Digital Officer years ago.
Sustainability has become a real thing, and the odds that it’s a fad are past. It has been particularly obvious for companies that target Millennials as customers, or that needed to hire someone under 30. (In fact, a 2015 study from Morgan Stanley demonstrated that Millennials are 2–3 times more likely to want to buy from and work at companies that place a high value on addressing environmental and social issues.)
In response, many companies created a new role, Chief Sustainability Officer. A logical move.
For those companies early to the game, the CSO operated separately for the most part. The successful CSO’s generated value (versus growing cost) by being smart and finding creative ways to reduce energy expenditures. Solar panels. Energy efficiency agreements. Demand management solutions. Power purchase agreements.
Those strategies and stories are now playing out, and leading organizations are now making sustainability a core strategy across the entire organization, no longer an organizational sidecar.
We’re seeing companies like Walmart tackle sustainability throughout the entire supply chain. Nike has been a leader in tackling sustainability broadly across the company. Interface has transformed its entire business around a unifying sustainability philosophy. Ford is doing important work across every aspect of the company.
Notably, we’re starting to see sustainability play through marketing organizations in organic and subtle ways. We’re beyond the phase where sustainability marketing = press release of an accomplishment. That’s not terribly effective, and certainly not for longer than a week. Now, marketing teams are figuring out how to tell their brand’s story with a sustainability story natively woven into messaging across the board.
Hopefully that sort of integration of sustainability into business operations becomes the norm across the board in major companies over the next 10 years, and we start to see CSO roles being phased out then, much like CDO roles are starting to be today. As a sign of progress and success, not an abandonment.
Then, we’ll be left wondering what the new, new addition to the executive ranks will be. Chief Virtual Officer? Chief Enernet Officer? Let me know when you spot a new one in the wild.