Businesses are rapidly adopting data-driven cultures and tools that often leave behind different team members due to poor leadership. This can be prevented by maximizing the resources of an influential Chief Data Officer (CDO) in an organization. Having a central figurehead that is able to usher in change and streamline operations around data-driven technologies enhances a business’s ability to respond to current marketplace demands.
The more companies struggle with managing data on a massive scale, the more the need for proper leadership that is specialized in this skill will arise. The best way to combat these struggles and roadblocks is by hiring and following the lead of an experienced CDO.
What is a CDO?
This role is typically given to someone with direct experience in building, managing, or streamlining data systems who also understands the requirements of leadership. As senior executives, they are responsible for the governance and utilization of data across a business. It can be argued that the leadership side of their skillset is equally, if not more important than getting an enterprise and all its team members to adopt a data-driven culture. Something that is not an easy task.
The CDO grew in popularity after the 2008 financial crisis when banks were under intense scrutiny from government overwatch to reduce the risk of future recessions by implementing standards and safeguards surrounding data management. The idea was to avoid future financial failures by having someone at the executive level overseeing the data flowing through an organization.
Since then, the role of CDO has bled over to many other industries as the immediate benefit of a dedicated head of data made sense when so many businesses began the great digital transformation over the recent decade.
What a CDO Brings to the Table
The function of a CDO is to build, maintain, and govern data through an organization. The end result is that high-quality data can be generated to inform business decision-making, create more insights, and add value to the company’s efforts.
This is achieved through creating new data strategies built on verifiable data analytics and business intelligence. While the initial intent may have been for a CDO to help with compliance issues and data governance, the more accurate description would be:
- Governance – monitoring and advising on data as it moves through an organization.
- Operations – creating new efficiencies and usability surrounding data availability.
- Innovation – leading new technologies and tools into mass adoption that foster innovation, help to generate more revenue, and reduce the costs of processes through automation.
- Analytics – reporting on the different aspects of a business (products, operations, markets, clients, etc.) so valuable insights are generated.
What are the Challenges Around Creating a Data Organization?
As the CDO is a relatively newer construct in a business structure, there have been some issues carving out a niche for their goal-setting compared to CTO and IT departments. However, there are some key roadblocks that a quality CDO can address and help a business move forward, including:
Business Challenges
Demanding Data/Privacy Regulation Compliance
Considering how often we hear of leaked data and misuse of gathered user information, it only makes sense to have a single decision-maker in an organization that can take responsibility for ensuring all data is compliant with local, state, and federal mandates. This includes the internal regulations a business sets to operate in its specific niche.
Monitoring Data Management Investments
The CDO is where the buck stops when it comes to new innovative technologies and tools that can be integrated into a business for improved operations. If an automated data validation tool can be used close gaps in how information is shared and presented, it is up to the CDO to demonstrate this value so a reasonable decision can be made addressing how much to invest in this tool/technology.
Tying Technology-Business Data Strategies to Deliver Advantages
Another way to put this is monetization. It is not enough to suggest new methods and technologies that improve a business. A CDO must present how these new additions will help the bottom line of a business. This is not just about meeting goals but also growing future revenues.
Technological Challenges
Choosing the Right Technology for Modernization
There are a wide array of powerful AI/ML tools available on the market that can benefit a business. Finding the ones that best suit the niche, market, needs, and unique challenges of a company is not an easy task. This is coupled with upgrading current systems in a unified way so that nothing is lost during a transition to new technologies.
Data Strategies for Best Results
How data flows through an organization directly impacts the ability of that company to make decisions and gain valuable insights. This is why it is helpful to hire a CDO with a background in data management, IT, or a related field. Knowing every step from source to report is critical to creating a data strategy that leverages modern tools and reduces risk or quality issues.
Organization Challenges
Leading Company-Wide Data-Driven Initiatives
The culture of integrating data-driven insights is not as predictable as many in the IT or BI worlds would like to think. There are always departmental or executive holdouts that are resistant to change, and an experienced CDO will have ways of convincing and demonstrating why these shifts in operations are necessary so everyone is on board.
Enhancing Data Literacy
Hand in hand with a data-driven culture is the improvement of data literacy in general. No single person will be able to adequately explain the intricate minutia of data through an organization. A CDO will need to delegate explanations and standards to different people within an organization to ensure the proper use and collection of data from all departments.
Hiring Teams
A CDO is going to be heavily relied upon for hiring decisions when it comes to implementing its strategies and new investments. This will require trust and integrity building on the part of the CDO. The best way to do this is to take ownership of all data conflicts and have patience with clear explanations of how new innovations will improve business operations.
What Should be the Focus Area of the CDO?
The problem is there is no clear way to answer this question. It will be highly reliant on the industry and niche business being served by the executive role. For example, a company with medical clients may wish a CDO to focus more on governance and privacy protection than on implementing new technologies. Conversely, a business in shipping may wish a CDO to use new data strategies and innovations to build revenue streams and reduce expenses.
It is all going to come down to the purpose of the organization, especially as this executive position continues to adapt and grow in a fast-moving environment. If there is one thing that should be agreed upon, it is that a CDO is a change agent that will bring new technologies and strategies to a business in order to best leverage the data being collected and managed.
