- April 12, 2017
- Posted by: Myles Freedman
- Category: Finance, IT, Marketing, Networks, Strategy
The Chief Data Officer – Who Are They and Why Companies Need One.
Data has become one of the core areas that companies are investing in at the moment, whether they are mature, on the journey or just embarking on data projects. Every mainstream magazine from the Economist to Newsweek, papers galore have gotten in on the act from the Financial Times to the New York Times – they have all presented articles about data, big data, customer data etc. Citing that data is at the heart of every or most initiative whether it’s to do with the customer experience, creating or enhancing a new product, streamlining the operational processes or getting more laser focused on their marketing. With this new (or should I say ongoing) trend, there has emerged a new power hitter, the data supremo, the knight in shining data (that’s enough now this isn’t a boxing match!) – please welcome to the ring the new kid on the block in the C-Suite – the Chief Data Officer or CDO.
Let’s take a look under the covers at who the CDO is, and what they are tasked with in this brave new world.
The New Frontier
The characteristics of the CDO:
- A Leader (yes with a capital L) that knows their “true North” and can guide companies and corral people on a journey from data immaturity to being a data competitor
- An advocate for all things data from: data governance, to data analytics, to data architecture, to data insights and actions
- An individual that has the tenure of business, and can quickly understand business models and strategy and align these to the data / information strategy – supporting the strategy to ensure the business evolves into the vision that has been set
- An individual who has the knowledge of technical concepts, and the ability to set the technical data strategy and collaborate with technology colleagues (namely the CIO / CDO) to ensure alignment with the overall technology strategy
- An individual that can lead an organisation through deep change, rethinking the way they look at decisions and encourage a data-driven approach
- Most importantly, and this is purely my view – a delivery and execution focus with the confidence to try things in a small way and if they fail then rethink and attempt again. This is about failing fast – none of us have the true answer to this and without a little bit of experimentation the CDO will almost definitely fail!
I am sure there are for more characteristics that may be focused around privacy, data security, agile etc. All of these are important, and certainly up there with the responsibilities. In some industries, such as the financial world and heavily regulated ones, there may well be Chief Information Security officers or Compliance personnel that can support the CDO. That leads me onto my next point.
A Seat at the Top Table
I have a sneaky little feeling that most of you think the CDO should be sitting somewhere below the CIO / CTO or even CFO – wrong! In my humble opinion (well actually experience of working with a number of CDOs across different industries) – they should be reporting directly to the CEO and should be on the Board. Being able to set the strategic direction, and the ability to sit at the top table permits that level of confidence and authority to be voice of data within the company. Spelling out just what and where the company needs to go with data and how it’s going to get there – a roadmap if you will. This is the guiding true north of the CDO – sitting at the top and being able to provide input at the top – down will ensure that agreement on data projects and the force behind them prevail – and not just fall down some miserable drain somewhere never to be seen again or for someone to say – “oh no we just weren’t ready for a CDO”. Once a CDO has been employed and onboarded, the company has to ensure that data is seen as a strategic business asset and with the intelligent use of data comes profitability, deeper customer understanding, better product outcomes, a better and slicker operations.
If the CDO has the opportunity to be on par with the C-Suite then they can work with their counterparts more effectively to complement the IT Strategy (working with the CIO / CTO); understand the issues that they CMO is having working the marketing funnel and customer propensities to buy products etc.; being able to support the CFO by providing deeper insights into regulatory reporting and getting it faster out of the blocks – ensuring governance of data is permeated throughout.
Gartner’s predicts that 90% of large organisations will have a
Chief Data Officer role by 2019
The Journey Starts…in the first 100 days
Meet and listen to your key Stakeholders: Just like presidents and prime ministers when they come into office, they have a 100-day plan (or you hope they do!). This is when they need to be at their most thoughtful, observant, curious and in deep listening mode. It isn’t the bulldozer effect here – this is where humility must be on offer – a stance of “I want to know where you have been” and “I want to listen to where you want to go” and most of all “I want to support you to get there”. No assumptions or judgements should be in place here – leave your EGO at the door.
Where is the PAIN?: While meeting with key and wider stakeholders, start to understand their key issues / pain points / challenges with data. Understanding where companies haven’t had a good experience with data or have invested in technology for the sake of it and of little or no value etc. With this, the CDO can start to think about how their role can support in the objectives that others have been set – be it departmentally / locally / regionally / globally. With one of the CDOs we are working with now, they were set a very difficult task of supporting the company with very little resource and budget. Cobbling together what they could from project to project. As this grew, the issue became that business units would get frustrated by the lack of impetus or push from the CDO, that led to scepticism and frustration throughout the business. From all sides. This is really key for most organisations – empower the CDO – don’t give them a job that doesn’t have a mandate – what I’m really saying is prepare to win and not fail. The CDO in this case, thankfully, is now turning heads and being able to deliver real change and benefits in a business that is going through deep change.
Measures / KPIs and all things glossy: This is the real icing on the cake, the sponge and creamy bits of the cake that everyone wants. How to take the pulse of the organisation and start to understand what needs to be measured in the various departments, what are they measuring now, how are they getting to that data, which business questions are being asked, which aren’t being answered and which by their very nature have been put to the side as people don’t know how to answer them. Initiatives will also emerge from the multitude of conversations – some people will talk about a Single Customer view as being the holy grail, others will want operational efficiency, some will want to take products to market quicker, others will want to know how they can predict who will buy their products in the wild west! All of these are great places to start to think and build a plan of attack.
Roadmap time: This is where the plan starts to shape! The culmination of all the conversations, have started to sink in, there has been a ton of data to pick through both technical and business in nature. Supported as a high-level picture or document or even powerpoint deck (go easy on the number of slides) – these are the areas that the CDO needs to focus on after all of the conversations:
Business Drivers & Goals – a deep understanding of the business strategy and where that particular roadmap is headed and how everything the CDO does, needs to align with that.
Business Intelligence /Analytical Maturity – a stake in the ground as to where the company is on their journey – the five areas being (just one of the many frameworks that can be used):
- Stage 1 – BI / Analytically impaired
- Stage 2 – Localised BI / Analytics
- Stage 3 – BI / Analytics Aspirations
- Stage 4 – BI / Analytics Company
- Stage 5 – BI / Analytics Competitor
Data Governance – are there standards, policies, processes and data owners across the organisation. The CDO needs to think about how to define these areas, and take the organisation on a journey where they can adopt principles of Master Data & Reference Data Management (being just one of the issues). Adopting a maturity metre to understand the structures that need to be put in place, will help the business understand the action that is needed – the maturity needs to focus on the following five areas and how to get there:
- Stage 1 – No Data Governance
- Stage 2 – Application Based Standards
- Stage 3 – Data Stewardship
- Stage 4 – Data Governance Council
- Stage 5 – Enterprise Data Governance Program
Resources & Organisation – we recently worked with an Insurance company that worked with data in isolation, and depended on a few key people to churn reports week in, week out! By churn I really do mean hand cranking them, by extracting and manipulating hundreds of spreadsheets – nightmare city! By taking a measured view across the organisation, we were able to find some astute data evangelists, analysts as well as consulting on who they should hire, the insurance company was able to centralise a team that would provide data and MI (as they liked to call it) to the business. Thereby, taking off the pressure of the few that had been sweating a lot! In this case they didn’t hire a CDO, however, the CDO when appointed needs to sniff around the business and dig out those people that can form what might become an Analytics Centre of Excellence, or a Business Intelligence Competency Centre. In another company, we were able to find these people in their business units and over time, helped the CDO to bring them into the CDO office – this helps as they have the business knowledge and can perform data analysis that someone from the outside wouldn’t be able to do as quick – true insights supported by their data analysts and then able to take action as they have the credibility of knowing the business. The main idea here is to move to a point of true centralised or hub and spoke model to support the business, so that data is talked about at the coffee machine- I mean what else would you talk about at the coffee machine right? Grin
Tools & technology – last and by no means least – the various investments or divestments that need to be made. What is working, what isn’t, what isn’t aligned to the overall strategy, how many BI applications are being used across the organisation, what platforms are required and so on. This is the cool stuff that centres around visualisation to support data storytelling, predictive analytics and all things that will drive those initiatives and give people the freedom to enjoy data and being able to self-serve all they want. This could take into account if the company needed to look at Hadoop or next generation AI / machine learning and to have that on the roadmap or whether a data warehouse will be suffice to being with, and how they integrate key data to answer those business questions.
As stated the main artefacts that are produced – the Data or Information Strategy that outlines what will be done to reach the 100-days mark. A communications document / slideware that puts the roadmap on a page and explains the high-level. The evangelical movement begins.
Once the roadmap has been accepted, the CDO needs to start walking the walk, taking that action and measuring the results. There need to be regular updates with the key stakeholders, to ensure they know what has been delivered, what will be delivered, when it will be delivered and how much value is being delivered by all the initiatives – this is the real rub – the impact that the strategy has had.
“There is no division where you can’t add value by using data.”
Davide Cervellin, eBay Head of EU Analytics
It’s a Brave New World
Not every company out there will need a CDO, but the tide is turning and without the focus on data that is crucial to every business now – companies that don’t appoint this role may well be left behind. The competitive advantage that a CDO brings to the top table is one that is gaining ground and is much needed in times of differentiation and innovation.
More and more companies will continue to generate more and more data from all sources – customers, sensors, products, social etc. and the difference could be the CDO, the data strategy and aligning with the business strategy. Being able to transform, equip the business with the data they need, creating value by experimentation, not being afraid to fail, breaking through the scepticism, will win the CDO a lot of friends, but most of all, the CEO will be blessed with a C-Suite that can break the mould of the old – “how things have always been done!”
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Samir is a data strategy and analytics expert & founder of datazuum, a company that helps organisations cut through the complexities of data and succeed with their data projects. Find out more at www.datazuum.com.