Now that you’ve decided that you need a Chief Data Officer to remain competitive in the Age of the Cloud, where will you find this person and what tasks will you give him or her to have the greatest impact on your organization? Most of all, how will you protect your new CDO from the many entrenched company interests that may resent (and impede) this person’s vital work?
As we discussed in the last column, the CDO role is being created to both fill a void and to answer a need. The explosion of data pouring into the modern enterprise– everything from sensors to cameras to point-of-sale to GPS to field testing– is offering an unprecedented opportunity. Companies willing to not only capture that data, but analyze it, and then apply the resulting wisdom to their operations have the potential to gain a decisive advantage over their competitors. Hence, the rapid adoption of the cloud, big data and data analytics (as well as the growing numbers of newly-minted data scientists) across the business world.
The greatest need for access to this data currently comes from marketing departments, which see this vast new cache of information as giving an unprecedented look into the nature of customers and markets. Unfortunately, the void has come from corporate IT departments, already overworked, managing internal IT infrastructures, which see the management of added data and tools as unwanted additional work.
Thus the rise of the Chief Data Officer, an individual wholly dedicated to acquiring, managing and using this new data to improve corporate productivity and competitiveness. As many companies are just now discovering – even though only a few to date are using the title – the CDO is the vital new addition to company executive management for these times; the corporate officer wholly dedicated to giving your company a data culture. [For more on this, I recommend this article]
But it isn’t enough to recognize the need for a Chief Data Officer. The real challenge will be in finding the right person for the job, protecting him or her from an organization that might quietly conspire to repel such a newcomer, and most of all, to get the most out of what this individual is assigned to do.
In my last column I discussed some of the qualifications of the CDO. To summarize, they are likely to be young, ambitious, extremely comfortable with vast quantities of data, and fired with a desire to make this data empower and transform the organization. By the same token, they are generalists as opposed to ‘data scientists’, they have a wide-ranging understanding of how this data is captured, and an encyclopedic knowledge of the analytical tools available. Most of all (and unlike data scientists) a true CDO can operate with a foot in both camps – that is, able to work with and manage hardcore technologists and Big Data experts, while at the same time confidently navigate the complexities of corporate business management and politics.
Needless to say, this is not a common figure which explains why smart companies are already racing to recruit them. Not every company needs a CDO, but a surprising number do and not just in obvious industries such as retailing, distribution and service but even in many areas of old-line manufacturing and supply. Every enterprise owes it to itself to at least investigate what advantages it would gain from adding this professional. . . and many will be surprised. This in turn suggests that demand for CDOs will soon outstrip supply; so your company might be well served to move quickly on its recruiting efforts. You might want to start by looking inside your own organization. You might be surprised to find that gifted, but as yet unrecognized, data manager you need. This person will have the added benefit of already knowing your organization, culture and practices.
Once you find your CDO, you now have to protect him or her. As we noted last time, the ‘Chief’ title may suggest that the CDO should report directly to the CEO. But that isn’t necessary – and overstretched CEOs may also resist the idea. What is critical is to not put the CDO under the CIO, no matter how much the IT department may demand it. Sadly, IT will be more motivated to reduce the influence of the CDO (and thus their own work) rather than empower that person.
A far better home will be the marketing department or perhaps another appropriate line of business. After all, for now at least, marketing will be the biggest beneficiary of the CDOs work. The CMO knows best what the company needs right now and can convey those desires directly to a subordinate CDO – and then follow up to assure that the work is done. However, beware: over time, especially as big data begins to color every part of the enterprise, other company operations may become the chief beneficiaries of the CDO’s efforts. Therefore, it’s crucial not to let the marketing department turn the CDO into a wholly internal, dedicated marketing operation. And the key to that is for the CEO to give the CDO considerable operating independence within marketing and then enforce that independence with the CMO.
Now that you have your CDO and he or she is safely ensconced in an independent department, or at least within marketing, you face the biggest question of all: What should the CDO do? In particular, What should the CDO do to make the greatest contribution to the company? And how do I measure whether the CDO is successful?
Let’s begin with goals. The primary task of the CDO is to enable your company to compete with data – i.e., not just use data as a fuel for company operations, but as a product itself; as a component in the creation of new products and services, as a lens to discover new markets and opportunities, and as a language through which the company speaks to itself. You can’t compete with, and live with, data unless the organization has developed a data culture. And to inculcate that culture into the organization, you need a missionary for that message. And that person is the CDO.
But a data culture isn’t enough. The company must be able to communicate that data throughout the organization, conveying need one-way and usable results the other. And that requires the installation of a data communication apparatus throughout the organization. The creation and maintenance of this apparatus should be the duty of the CDO as well.
The CDO also needs to be a look-out. This is why you need a generalist in the position. The CDO should be constantly searching the field, looking for any new tool or technique – even if it emerges in an entirely different field –that will help winnow out just one more bit of wisdom out of the data. After all, that new bit of knowledge may prove to be decisive against the competition.
Finally, the task of the CDO should be to expand opportunity. Companies are very good at understanding what they need to do to succeed in their existing businesses. What they aren’t really good at is identifying new opportunities outside their current operations. That is, they know what they can do, but not necessarily what they might do. No one is better positioned in the company to address the latter, and help the CEO formulate a long-term strategy, than the CDO.
That sounds like a lot to ask from one individual. But that’s why you want your CDO to be young and ambitious. There’s a good chance that many of the next generation of corporate chief executives will come from the ranks of CDOs.