Randy Bean and Allison Sagraves
Only 40.5% of organizations report that the CDO/CDAO role is well understood within their organization, according to the 11th annual survey of Chief Data Officers (CDOs) and Chief Data and Analytics Officers (CDAOs), to be published by NewVantage Partners, A Wavestone Company, on January 3, 2023. This finding, coupled with news that just 35.5% of organizations report that the role is successful and well-established within their firms, should come as a shock to no one.
The respondents comprise data and analytics leaders from 116 Fortune 1000 companies and large organizations, with 84.6% of survey respondents holding the Chief Data or Chief Data and Analytics Officer title.
There is uncertainty and mixed success for the CDO/CDAO role following a decade of evolution in its scope and responsibilities. In 2012, when the survey was first conducted, only 12.0% of companies reported the appointment of a CDO. This year, 82.6% of companies reported having a CDO/CDAO.
During the past decade, the role has grown and expanded. For 69.4% of companies, analytics is now part of the CDO/CDAO mandate. For many organizations, the CDO role has evolved into a CDAO function. For 61.8% of respondents, responsibilities have shifted from “defensive” activities, such as compliance and regulatory reporting, to “offensive,” including revenue growth, business expansion, and customer acquisition.
The perception of the role has been elevated. While most early CDOs reported to the Chief Information Officer (CIO) this year, companies say that 43.3% of CDOs/CDAOs report to the President, CEO, or Chief Operating Officer of the company, and just 27.4% continue to report to the CIO. This is a big step forward.
Against this backdrop of an evolving function, we ask, is it time for companies to reinvent the Chief Data Officer role?
As co-authors of this article, Allison Sagraves and I share a mutual perspective that data is one of any corporation's most important business assets. We believe that the industry is nearing an inflection point, and now is when organizations need to become more effective in using data, supplement intuition and experience, and make informed business decisions quickly and confidently.
Sagraves brings the perspective of a data leader who has sat in the chair, living and breathing the CDO role. She served as Chief Data Officer for M&T Bank for five years and was the founding CDO. Currently, Sagraves is adjunct faculty for the Carnegie Mellon Chief Data Officer Program and an outspoken advocate for reinventing the CDO position to make it more relevant, urgent, and successful.
Data has become integral to how companies achieve their business objectives. To speak of data as its own domain or as something separate from the business does data a disservice. As one executive says, “We don’t even use the word ‘data’ when talking to the business.” We should no longer assume that business leaders do not understand the value of data or are not “data literate.” We don’t need to sell the concept of data literacy. Businesspeople get it. They are used to financial metrics and tracking business results.
Change of any kind is always challenging. Data flows through an organization, and there has yet to be a single historical owner. Data can be messy and unreliable until organized and rationalized. Data continues to grow; once you think you have a handle on it, the problem only gets bigger. Using data means changing how people work, how they are organized, what they are responsible for, and what skills they need to do their jobs. The Chief Data Officer role is new, so there is no agreed-upon blueprint for success.
So, how can organizations take action today to reinvent the CDO role to achieve greater traction and deliver greater business value from data investments?
Relentlessly Prioritize and Focus.Organizations need to prioritize their efforts by starting small and focusing on answering questions that matter to the business. Answering these questions may only require a small subset of data. Better to answer a single business question right with a little bit of data than to create a vast data repository without addressing a single business question correctly.
Follow Business Demand.Companies need to adopt a demand-driven model where the business has a clear need — better customer experience, new products, lower costs, and better risk management — rather than searching for a problem to solve. There are plenty of real-world opportunities to solve right before our eyes.
Build Trust and Credibility One Business Partner at a Time.Build trust and credibility one business problem at a time. Find a willing business partner with a problem and put together a small team of business experts, data analysts and engineers who can cycle fast and get results. Data leaders cannot expect to win all hearts and minds at once.
Keep It Simple and Don’t Over-Engineer.While enterprise standards, policies, and guardrails are important, overemphasizing enterprise adoption too often slows progress. With the best intentions, data leaders have too often over-engineered and over-architected how we think about and manage data. Let’s simplify how businesses use data, not over-complicate matters.
Make it Easy to Use Data. Data leaders need to stop agonizing over the optimal business use case and instead take the most pertinent data and start working with it. Delivery of successful business outcomes means lowering the barriers of entry for business leaders and applying agility at every stage of the process — from data governance, tool selection and procurement, and set-up of environments to use case selection.
Test and Learn. Those organizations that test and learn and continue to adapt to the evolving needs and demands of the business and customers will prevail. Create a sandbox environment. Experiment. Fail fast. Learn faster. The most successful data leaders have been practicing this approach for decades.
Think Differently. Companies need to develop a more agile spirit when it comes to making use of data. This requires a fresh mindset. Data and business leaders need to think differently. The time has come to stop the bleeding. Creating the Chief Data Officer role was an attempt to plug the dike. There has been significant progress, but there is still much to be done.
Chief Data Officers deserve considerable credit for what has been accomplished to date, but they must also bear responsibility for helping design the path forward. By their very nature and design, transformation efforts unfold over years and sometimes over a decade or longer. Companies have sought to manage and gain insights from their data for decades.
It is time to deliver differentiating and transformational business value from data. Perhaps this is the moment to reinvent the Chief Data Officer role.
About the Authors
Randy Bean is the author of “Fail Fast, Learn Faster: Lessons in Data-Driven Leadership in an Age of Disruption, Big Data, and AI.” He is a contributor to Harvard Business Review, Forbes, MIT Sloan Management Review, and The Wall Street Journal. Bean is an Innovation Fellow, Data Strategy with Paris-based Wavestone (EPA: WAVE), and Founder/CEO of NewVantage Partners, acquired by Wavestone in December 2021.
Allison Sagraves was the founding Chief Data Officer at M&T Bank, a role she held for five years. She held leadership positions at M&T Bank for 31 years. Sagraves is currently adjunct faculty for the Carnegie Mellon Chief Data Officer Program and a board advisor with several companies. She holds a Bachelor of Arts from Smith College and an MBA from Harvard Business School.