With the exponential growth of (big) data & analytics, the opportunities and risks grow with it. With numerous opportunities, an exploding market and an abundance of available technologies it’s easy to get lost.
In this new data driven world, a new role has emerged to guide us through this revolution: the Chief Data Officer (CDO). After several years where the CDO was equal to a unicorn, lots of stories but no sights, the CDO is now becoming more and more mainstream in the board rooms.
The CDO combines technology, business and corporate skills and needs to be rope-dancer, continuously monitoring balance. Balance data driven and fact based decision making with intuition,experience and entrepreneurship. Balance between control, where we limit risks and drive extensive compliance to legislation, and the ability to innovate and chase opportunities. Balance between investing in new technologies and leveraging what’s already available. Balance ethical and environmental responsibilities, public interest and revenue generation.
Technology is currently providing nearly unlimited potential, and a growing workforce of skilled people is breaking the status quo, leveraging data and analytics to create insights, drive revenues, innovate and crushing the competition. Even more traditional assets like vehicles, machinery and equipment are growing more and more connected enabling new opportunities to gain knowledge about customers, process or even competitors.
More innovations than we know are based on data. Our camera´s are able to identify faces and take pictures when those faces smile, chat bots are becoming nearly indistinguishable from real humans, robots can run, walk stairs and survive on rough terrain, predictive models allow autonomous transport, space rockets can be launched and land straight up again, and numerous other examples show the enormous potential that they offer us. Complex algorithms are evolving at enormous rate, and outperform the human brain at many areas already, and their fuel is data.
But the extensive digitization also requires new types of risk management. Data leaks, hacking, new legislation, fraud and analytical mistakes combined with a strong public opinion on the topic can have a devastating impact on your companies reputation or revenue streams.
When we explore the role of the CDO, the balancing act starts in the boardroom where this new role needs to align with other functions in the organizations top management level.
Strategy & Vision – having the right material to do the job
As a first a CDO must clearly have the ability to think and operate at a strategic level. Specifically since this is a pretty new role, the CDO needs to be able to define his role and earn his place in the boardroom. To be effective he will need to build relations, both with his peers as with other functions in the organization.
With his most important stakeholders the CDO will need to ensure the role of data & analytics is clear, either in overall and business line strategies or in a separate data & analytics strategy that supports the others. The ability to get acknowledgement for the role, and creating a levelled playing field with other executives will be one of the first critical success factors for this role.
To do this, the set of soft skills are probably the most important weapons in the CDO’s arsenal. They will determine if doors go open or remain closed. Successfully engaging with his stakeholders is pivotal to execute the CDO’s strategy. A major pitfall is to build a reputation of “the data guard”, better is to become the “data guardian” who’s taking care of the data, but without limiting innovation and entrepreneurship.
Legal, risk, compliance, ethics and privacy – connecting to the CEO & CFO
Second topic on the mind of the CDO are the legal, risk, compliancy, ethical and privacy aspects of data usage. Although these topics in general shouldn’t be in the CDO’s personal portfolio (this topic is usually shared between the CEO, CIO and/or CFO), he will be one of the most demanding stakeholders for these topics.
The massive use of data within the organization introduces risks in all of the these area’s. The CDO should drive discussion on ethics, and ensure safe data usage for both the company and it’s customers. And of course the obvious compliance to regulations and (corporate) policies. The CDO should be the front runner in the right behavior, both internally and externally, and facilitate discussions on these topics.
Because conflicts between these topics and other functions are inevitable (e.g. privacy vs commercial interests), next to the factual knowledge the CDO has to obtain on these topics, the set of soft skills will again be a major determinant for success of the role.
Business opportunities – supporting the functions (CMO, CCO, COO, … )
While these C-level executives are running their business, the CDO should provide them with the matter to drive the right choices. Besides provisioning of skilled resources, data and technology (often in corporation with the CIO) the CDO will also need to drive a more data driven culture. And lead the search for evidence where decisions currently are made on intuition, in such a way they don’t limit innovations and entrepreneurship.
This might well be the most difficult balancing act. To support entrepreneurship, creativity and innovation while keeping control. It’s a thin line between total chaos and lock-down by regulation and governance. Yet this is, in terms of the value of the CDO’s role, probably the most important balance that needs to be kept.
This is where the CDO´s data and analytics roadmap needs to support both entrepreneurship and the need for control. Providing enough freedom to chase opportunities, but enough control to prevent crossing ethical borders or legal boundaries. In the end, both the customer as the business lines themselves should benefit from the efforts of the CDO.
Technology & Security – Where the CIO comes in
Allthough technology and security are usually the CIO’s main focus areas, the CDO can not allow himself (or herself) to ignore this topic. The rapid pace technology is evolving, with a major shift to the cloud, asks the CDO to align these topics with the CIO in his data & analytics roadmap.
From the security perspective the rise of new legal, compliance, ethics and privacy policies will drive new and higher requirements to corporate security. Where data imposes both risks as opportunities to enhance the security.
The CDO and CIO will need to team up to support the business functions to hit their targets, but also join the CFO and CRO in their efforts to maintain control and transparency. Together with the CIO the CDO is responsible to create a comprehensive data & analytics technology landscape that provides acces, delivers control and enables employees to get value from the data.
Data, Data, Data – a CDO’s homeground
This is the real core of the CDO’s role. Where in all other areas he should engage with his peers and uses his influence to make progress, this is his own ultimate responsibility. The CDO should drive data governance with topics as data quality assurance, master data management and execution of the data strategy. His actions should ensure that all areas are covered and managed. He should drive data usage and create a common language within the company, a safe place to work.
This is also where two definitions of the CDO meet. This is the area where the Chief Data officer joins the Chief Digital Officer. With the infrastructure of the CIO as the roads, the CDO (in both definitions) will need to be able to create and select the vehicles that will bring the organization forward. Where the role Chief Digital Officer is often aimed in moving from the analog world to a more digital world, the Chief Data Officer is his successor to leverage the digital world to service the business units, the customers and organization itself.
The grey areas – What’s not so clear
Where above examples will mostly be intuitively clear, there are some areas where it’s not so clear who should be responsible.
Data provisioning – Collecting data from inside and outside to company, integration of multiple datasources and making it available to a wider audience is probably one of the most important enablers of any data strategy. Yet the work here often lies within software development, which is most likely to be in the CIO’s portfolio. However, given the importance of this topic, and depending on the CIO’s primary focus (eg infrastructure, support, development, …..) it could be wise to place this topic with the CDO to ensure the right attention and focus. This decision will either drive the CDO to a more regulatory position (as his colleagues CRO, CFO are also) or more to an executive role (like the CMO/CCO/COO)
Data science/Big data – As one of the biggest topics on most conference agenda’s most companies are seriously investing in data science. There is a strong link to the CDO as they should be forced to comply with corporate governance and ethics, but also a really strong link to the business functions as domain knowledge is essential in the interpretation of the data. Connecting them to the CDO ensures independence and focus on quality and security, but also on scarcity and prioritization conflicts. Placing them within business functions will ensure focus and availability but also reduces learning curves and increase bias while doing research. A separate blog while appear on this topic within a few weeks.
The CDO is on the watch
But does every organization really need a Chief Data Officer?. Well, that´s up to you. It should be clear there is no escape of the work, but every organization will find a way to overcome these challenges, at least, that´s necessary if they want to survive. The balancing act of the CDO is included in the total value chain of any organization and guidance in what it means to work with data, aligned definitions and KPI’s but without killing creativity and (controlled) risk taking is needed.
It’s a dirty job, but someone has to do it. And probably within every company, someone is (or multiple people are) already doing it. Working with data is hard work, and often goes with little appreciation. One of the biggest problems today it´s often hidden. People doing the work are not aware of there responsibility in a bigger picture, boardrooms lack insight and stare to each other to find out why they see different figures, customers expect to be informed and have control of their personal data, and legislative and regulatory powers expect organizations to be fully transparent and in control…..