Knowledge Center: Publication
The chameleon data officerSubscribe to Digital Officers 10/27/2015 Dennis E. Baden and Ryan Bulkoski
Thirty-five of the world’s outstanding chief data officers (CDOs) and analytics leaders recently convened at the Lockheed Martin Global Vision Center in Arlington, Virginia, for the Second Annual MIT CDO Roundtable. Drawn from many sectors — including financial services, technology, manufacturing, and government — they shared insights, success stories, and lessons learned as well as their views about the future of the relatively new CDO role. They largely agreed that the role has grown far beyond a strict focus on policy and governance to find a critical place in a broad range of business environments. And with the role continuing to evolve, today’s CDO must be something of a chameleon, able to adapt to the organization and the sector in which it operates while demonstrating the greater value of data. From this candid and wide-ranging discussion, several notable and consistent themes emerged.
Defense vs. offense/Governance vs. strategy
The role of the chief data officer — lacking a single, unambiguous definition — is often dictated by industry specifics. However, today’s diverse CDO roles share a common origin, arising as a means of better managing risk and as a response to increasing regulation, particularly in financial services. Few companies initially developed an enterprise-wide strategy around policy, governance, and data quality. Rather, the role was born out of the need to manage massive data sets increasingly flowing through organizations.
In recent years, the discussion of the role has shifted from internal to external considerations and how the CDO can monetize data and drive business results. With great expectations surrounding big data, it’s no longer enough for CDOs to just have the “house in order.” The business expects data to drive strategic decision making and the function that houses data to become proactive, not merely reactive. However, where governance ends and big data and data science begin has yet to be determined. In many organizations, these functions remain separate. In addition, the role of the chief data scientist has emerged, a role that differs from that of the traditional CDO.1 The question remains whether these roles will eventually merge under one leader.
While many participants agreed that the CDO role is taking a more strategic bent, some cautioned that the CDO must first ensure that data governance and policy are clearly defined before the organization embarks on more ambitious data and analytics initiatives. As they observed, harnessing data for business opportunities prior to evaluating fit for purpose and security is an uphill battle.
Set up to fail
Because CDOs often find themselves stepping into ill-defined roles, a high rate of failure in the role appears to come with the territory, though conclusive data supporting this is lacking. However, participants cited a number of factors that can contribute to such failure.
Inadequate reporting relationships
Data is not an IT problem; it’s an “everyone” business problem. If the CDO role does not sit in a strategic part of the organization or is at the wrong level (that is, more than two levels beneath the CEO), demonstrating return on investment (ROI) from the function is difficult. The most successful CDOs report directly to a CEO/president or COO and have an enterprise purview. By contrast, CDOs who report directly to IT must not become buried in the minutiae of data governance, data quality, and data warehousing.
One former CDO observed that the function was born because CIOs lacked the ability to stand up effective data organizations. In fact, many participants agreed their greatest opposition came from the IT organization. To succeed, a CDO must therefore be able to win the support of the most influential executives at the top of the house, especially the CIO.
Building an organization from scratch and getting the appropriate, cross-functional buy-in takes years and can try the patience of the business. By taking the time to understand business needs and new initiatives, a new CDO can produce quick wins and ease budget tensions while continuing to build the function for the future.
Lack of clarity
When an enterprise is hiring a CDO, various parts of the organization may have different ideas about what they want from the role. One business area may desire improved ease of access and governance, while another seeks ready-made analytics to drive business outcomes. These differing agendas make it hard for a CDO to please all constituencies.
Lack of resources
Most CDOs begin as individual contributors with small budgets. But building a data organization requires a dedicated team and enough financial resources to prove the chief data officer’s value. Without these basics, success is unlikely.
The future of the CDO role
Just as the “C” in CDO could stand for “chameleon,” the “D” at times could mean “diplomacy.” Because data belongs to the enterprise and not any one function, the CDO must display remarkable diplomatic skills, influencing key constituencies and acting as an agent of change. As one participant observed, data consumers in most organizations fall into one of three categories:
1) Friends of Data (FoDs)
These FoDs welcome the value CDOs can provide.
They are potentially friends, but to be converted they must first spend more time with the CDO in order to understand and appreciate the role’s value.
Unfortunately, most organizations have a contingent of employees who refuse to acknowledge the importance of data and view it as another way for IT to drain resources.
Faced with these factions, CDOs need to produce quick wins with clear business value while building a respectable governance model. Working across multiple siloes and lines of business to bring important, enterprise-level data sets together, they can create a strong information product and demonstrate ongoing ROI from data.
Meanwhile, they must emphasize continued partnerships with technology functions and champion the CDO role in their industries.
On the evidence of this roundtable discussion and the rich perspectives of its participants, the “chameleon” data officer will not only survive but thrive. Successful CDOs will move beyond the stereotypes, evade the failure traps, and use their adaptability and agility to fulfill a wide range of roles. They will act not only as diplomats, bringing the organization along with them, but also as governors, wisely shepherding data. They will act as scientists, helping identify what data to capture and how to exploit it. And they will sometimes act as czars, overseeing enterprise-wide data operations. Which of these roles they play at any one time will depend on the maturity of the organization, the imperatives of the industry, and the internal audience being addressed. Success will depend on the skill, agility, and leadership of the CDOs themselves.
About the authors
Dennis Baden (firstname.lastname@example.org) is a principal in Heidrick & Struggles’ Boston office and a member of the Big Data & Analytics, Financial Services, and Information and Technology Officers practices.
Ryan Bulkoski (email@example.com) is a principal in Heidrick & Struggles’ San Francisco office and a member of the Big Data & Analytics, Financial Services, and Information and Technology Officers practices.
Richard Wang (firstname.lastname@example.org) is the director of the MIT Information Quality (MITIQ) and Data Science Program and co-director of MIT’s Total Data Quality Management (TDQM) Program.