The rise of Chief Transformation Officers and Chief Change Officers: A necessary shift or another C-level role?
In the past five years, businesses have increasingly appointed Chief Transformation Officers (CTOs) and Chief Change Officers (CCOs) as they face growing pressure to adapt rapidly to technological shifts, market disruptions, and evolving customer expectations. But as with any new roles, a debate has emerged: Should transformation leadership be a dedicated C-level position, or can it be effectively integrated into the existing leadership structure?
There are several drivers fuelling the rise of these roles:
- Digital transformation initiatives: The push for digital transformation has become a priority for many companies, especially in response to the rapid acceleration of digital adoption during the COVID-19 pandemic. CTOs and CCOs are appointed to lead these initiatives, ensuring that transformations are not only successfully executed but also aligned with strategic objectives.
- Organisational agility: With businesses needing to navigate unpredictable market conditions and rapidly changing customer needs, there’s a growing demand for leaders dedicated to fostering agility across the organisation. CTOs and CCOs are responsible for embedding a culture of quick decision-making and adaptation.
- Managing complex transformation projects: Large-scale transformations, such as technology upgrades, mergers, or shifts to new operating models, require dedicated leadership. CTOs and CCOs often coordinate across multiple functions, breaking down silos and driving collaboration to ensure the success of these initiatives.
- Expertise in change management: Resistance to change is a common challenge in any transformation. Organisations increasingly see the need for a senior executive focused specifically on managing change. The CCO role is often tasked with aligning leadership, engaging employees, and fostering a long-term commitment to transformation.
While these arguments make a strong case for appointing CTOs or CCOs, there are counterarguments:
- Dilution of existing leadership roles: Critics argue that transformation should be part of the core responsibilities of existing C-suite executives, such as the CEO, COO, or CIO. Creating separate roles may dilute the accountability of existing leadership teams, who should already be focused on driving change and innovation.
- Organisational complexity: Adding new leadership roles can increase organisational complexity, potentially leading to confusion over responsibilities and decision-making processes. Some believe that transformation should be a shared responsibility across the leadership team rather than siloed into a single role.
- Cost and redundancy: Appointing additional C-level executives can be costly for organisations, especially smaller ones. Critics question whether businesses can afford to create these roles, particularly when transformation initiatives could be led by a cross-functional team or handled by an existing executive with a broad mandate.
- One-size-fits-all solution: Every organisation is unique, and what works for one company may not work for another. Appointing a CTO or CCO might not always be the right solution, particularly in smaller, more agile companies where leadership can adapt quickly to change without a dedicated role.
What do business leaders and experts say?
At Definia, we recently discussed the growing trend of transformation leadership roles and sought feedback from our online community on LinkedIn. See the original poll here.
The results were revealing: 58% of respondents said the need for a CTO/CCO ‘depends on the organisation,’ this reinforces the importance of tailoring leadership structures to specific business needs, rather than adopting a one-size-fits-all approach.
A growing trend
Despite the debate, data shows that the popularity of these roles is growing. Studies by Gartner reveal that by 2021, 70% of companies undergoing significant transformations had appointed a Chief Transformation Officer to lead the process – an increase from previous years.
Industries facing intense disruption – whether from new technologies, regulations, or customer expectations – have been early adopters of these roles. Many organisations recognise that specialised leadership can help manage the complexities of transformation, particularly when dealing with large-scale change.
Conclusion
The rise of Chief Transformation Officers and Chief Change Officers is a reflection of the increasingly complex and fast-changing business environment. While the debate over the necessity of these roles continues, it is clear that organisations undergoing significant transformations need strong leadership to navigate the challenges ahead.
Ultimately, whether a business chooses to appoint a CTO or CCO depends on its unique needs, structure, and goals. As Will pointed out, there is no one-size-fits-all solution. Companies must assess the complexity of their transformation efforts and decide whether their existing leadership can manage the change or whether dedicated transformation leaders are needed.
At Definia, we have seen first-hand the impact that strong transformation leadership can have on a business’s success. If you would like to talk more about an upcoming project and how Definia can help you, reach out to the team today.
