23 Apr 2020
How the CDO role should be giving your business a competitive advantage
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The true worth of a Chief Data Officer is not just in the mastery of data platforms and analytics, but rather in the vision, leadership and persuasion to unlock hidden value
One of Steve Jobs's better-known quotes came during his time at Pixar. “The most powerful person in the world is the storyteller.”
The ability to tell a story is one quality that sets the role of Chief Data Officer (CDO) apart from Chief Technology Officer (CTO) and Chief Information Officer (CIO).
That is because technology platforms and raw or even processed data do not interpret themselves creatively. A good CDO uses data literacy and insight to translate technology and analytics into a vision that can create unlimited value for a business.
The role and scope of the CDO
There’s much debate about the role and scope of CDO. How much data governance responsibility should they hold, the level of technological versus business acumen that’s ideal and to whom they should report.
But one thing has become certain. The surge of data generated daily, expected to be 44 zettabytes by 2020, has made it imperative that businesses recognise this asset class and strategise to govern, analyse and yield value from its vast potential.
“In the future, talent, more than capital, will represent the critical factor of production.” Klaus Schwab, chairperson of the World Economic Forum
The appointment of a CDO shows the value a company puts on its data and on building a data culture. And not before time, as these predictions from Klaus Schwab, chairperson of the World Economic Forum underline.
“The fourth industrial revolution will be a future of AI and robotics and its lifeblood will be data…”
“ …it is clear that the need to become data-driven is a global imperative. Companies have to transform their cultures and data architectures to adapt to new technologies, new types of data and, importantly, to new governance and compliance regulations.”
CDO enters the C-Suite
The flood of data and the ability to leverage it as a strategic asset are what bring the CDO to the C-suite.
A 2018 study by KPMG reported that businesses who have a CDO are twice as likely to have a clear digital strategy. IBM found that two-thirds of those firms say they are outperforming competitors in data-driven innovation and in market share. By 2018, 67.9% of Fortune 1000 companies had employed a CDO, up from just 12% in 2012.
No strategy without data
In a data-enabled business, data insights become native to the organisation. Data strategy underpins overall business strategy and helps to deliver it.
A good CDO is positioned to tell the story of the business’ data to the executive team.
For this to come to fruition successfully, many organisations need to be influenced towards a new culture where data is understood, appreciated and engaged with enthusiastically.
Holding responsibility and accountability for data collection, processing and analytics, he or she must develop a strategy for creating a receptive culture throughout an organisation. This is one where data is valued and used as a primary vehicle for all decision making.
Demonstrating how data can be measured and then monetised, directly and indirectly, helps to bring people on board.
Communication between business teams and IT functions must overcome information language barriers so messages are clearly understood.
When all employees learn and get comfortable with data language, the data-literate culture that ensues contributes significantly to utilisation, opportunities and strategy.
It both contributes to and aligns with overall business strategy.
“… the definition of data and analytics success is to become an enterprise engine of value creation.”
Bloomberg describes this new relationship well.
“The best CDOs understand the business, the importance of data governance and how the firm can put data to use.”
Working with the executive team, the CDO can introduce innovative and entrepreneurial initiatives that build on existing strategy and explore new disruptive ones, solidly based on data science.
Customer service can be more personalised, operations can be smoother, regulation compliance assured and competitive advantage gained.
Unlocking the data assets
The origins of the CDO role lie in regulation and compliance. As rules and expectations became more onerous from 2010, so did the obligations to stay on the right side of regulators. But, CDOs appointed to steward this task soon saw the unmissable opportunity to unlock the value lying in data assets of their organisations.
Bloomberg described this dawning realisation.
“In the U.S. especially, the more CDOs settled into their roles, the more they recognised just how tightly data was knitted into their company’s business. The information they’d been concerned with from a regulatory perspective offered great value in and of itself.”
Statisticians become storytellers
Data governance, regulatory compliance and risk management is still the remit of the CDO, maintaining organisational data integrity. But it’s in the creative investigation, analysis and interpretation of information that the true value of the CDO role brings rewards.
In other words, in the story that unfolds.
Dr Howard Gardner, Professor Harvard University, concludes this perfectly, when he says, “Stories constitute the single most powerful weapon in a leader’s arsenal.”