Choosing the right CDO to drive transformational change

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IDC forecasts a ten-fold increase in worldwide data by 2025, with the role of chief data officer (CDO) proving to be one of the linchpins of digital business transformation. 

According to Gartner’s 2018 Chief Data Officer survey, today’s CDOs have one of the toughest seats at the executive table - tasked with unlocking data-driven innovation as well as integrating disparate data and analytics capabilities into a strategic discipline, whilst helping businesses to achieve competitive advantage. Early CDOs were focused on data governance, data quality and regulatory drivers, whereas today’s data and analytics leaders are fast becoming impactful change agents tasked with spearheading data-driven transformation.

Currently, there’s both hype and some confusion surrounding the CDO role, but the next decade should see this position becoming more formalised and all-encompassing - sitting alongside the CEO, CFO and CRO in terms of strategic importance. With the role yet to become fully established, there’s still overlap with other roles in the organisation, such as Head of Data Management or Head of Business Intelligence (BI). It’s unusual for any two CDOs to have identical mandates or responsibilities and likely they will originate from different parts of the organisation, where they’ve risen through the ranks and then promoted to tackle a certain business need.

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Experience feeding CDO role

To fully evaluate the extent to which a CDO’s skillset will meet the needs of an organisation, it’s important to consider the various types of CDOs, where their focus lies, and the company departments they’re most closely aligned to. These include:

Customer Intelligence: Sometimes referred to as Chief Digital Officer, and most closely aligned to marketing or sales, this CDO focuses on developing a 360-degree view of customers and predicting how best to optimise their experience.  They will be concerned with customer intelligence initiatives around what’s working and what’s not, whilst capturing and leveraging customer sentiments on external channels such as Twitter.

Risk, governance and compliance: Focused on making sure company data is accurate and secure, the majority of CDOs originate from this part of the business due to the huge priority it’s been given over the past few years. Being closely aligned with business compliance initiatives also means these CDOs are likely to have come through legal departments and perhaps security teams, so will have a strong background in these areas.

New business models: Much like CEOs, a significant proportion of CDOs focus on maximising profit – a view supported by Gartner’s 2018 CDO survey which found that 45% of CDOs are mainly focused on value creation and revenue generation.  In some cases, the CIO adopts the CDO role, as seen during the implementation of business process management and ERP systems.  But, today a clear separation of roles is needed, although CIOs and CDOs must work together, especially where data as well as systems are involved.   

Re-imagining processes: The main concern for these CDOs is cost cutting and process improvements, with 28% of those CDOs surveyed by Gartner reporting cost savings and efficiency to be their key mandate, with bottom line improvements coming in second. We saw a wave of process improvements in the 90s including CRM and business application systems like SAP. Today though, the focus is more about data and measuring effectiveness, with these CDOs most closely aligned to CIOs and CFOs.

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Skills to broker conversations and fuel data literacy

Having reviewed the types of CDOs that businesses can choose from, it’s important to understand the main attributes this role brings to the executive table.  Whilst excellent data skills are a given, CDOs must be responsible for raising the skill level of employees so they can achieve more with data and analytics. 

Gartner and Forrester both agree that the biggest stumbling block for successfully implementing data driven initiatives is culture and literacy. So, being able to broker conversations and initiatives is key, with programmes in place for all those ‘data activists’ in the company, so they feel stimulated and motivated to drive change. When it comes to change management, CDOs can learn from companies likes of Google and Amazon, who let their employees dedicate time to projects they particularly want to work on.  This keeps innovation alive and organisations engaged.

According to Qlik’s Data Literacy Index, two thirds of business leaders are looking to increase the numbers of data literate employees, so companies need to do everything possible to retain these people - empowering them to improve performance by ensuring they have the right data available. After all, an organisation’s next million-dollar idea could be about to break.  

On the flipside though, a key dilemma facing every CDO is how much data should be made available versus how much should be withheld to avoid non-compliance or regulation breach. Rules and regulations must be applied to manage this dilemma, with governance principals set by the CDO, so the brakes can be applied as required.

Fusing people ideas and data

Whilst technical prowess, specialist knowledge and change management expertise are all key attributes, the CDO role must be about synthesising as well as analyzing.  They must de-silo or fuse people, ideas and data - identifying interesting combinations while observing structures and synergies.  This will prove particularly important when organisations are facing performance issues, or when mergers and acquisitions are planned.  

Business leaders wanting to drive transformational change must fully evaluate the skillsets and attributes of their CDO to ensure that their background and experience is the right fit with the business. Those in compliance-driven positions will be guided by regulation and governance such as GDPR, with vigilance being a key attribute, whereas those in customer-centric roles will be focused on maximising customer data to optimise experience. Data literacy is a critical element and fundamental to business success – with the ability to propel a business forward and reveal true business value.

Dan Sommer, Senior Director and Global Market Intelligence Lead at Qlik 

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