The CDO is the ethical 'data conscience' of the company
In a digital economy, every business is in the business of data, says Jacqueline Farman, founder of the Purpose Business.
The way consumers behave now means it is not good enough to have one source of information, says Farman. “You have to be looking at all the different pieces of the puzzle and pulling it all together.
“The really important one is, how do you change that from a piece of information to an ‘aha’ moment, that delivers the competitive advantage to the organisation? And then, deliver it in a form that can be used for daily decision-making to actually get ahead?”
Many New Zealand organisations do not have a C-level executive that is tasked to oversee this, she says, with the role being filled by the Chief Data Officer
The role of Chief Digital Officer has emerged in recognition of the need to take an enterprise wide view of data, and manage and monetise it just like any other strategic asset, says Farman, who is also chair of the board of the Sustainable Business Network. She was also most recently CEO and director of Colmar Brunton.
Analyst firm Gartner, meanwhile, says while the Chief Data Officer role is still new in the large majority of companies, an increase in the number of appointed CDOs in organisations of all sizes reflects the central role of data and analytics in digital business.
Gartner says more than 80 per cent of current CDOs assumed the role in the past two years, and 60 per cent of current positions were created in 2015.
Farman stresses the Chief Data Officer role is different from that of the other CDO - the Chief Digital Officer.
But both originate from the growth of the digital revolution so they need to work together to maximise the opportunities that digital provides, she says.
The Chief Digital Officer is usually in charge of digital strategy and transforming the customer experience, whereas the Chief Data Officer provides the strategy and operational model for creating business value from data, she says.
It’s a broad horizontal remit that works across channels, with inputs into the decision-making of all C-Suite roles.
Farman believes the CDO should be reporting to the CEO, alongside with the other C-level executives like the CFO, CIO and CMO.
She believes a certain type of CIO can likewise step into this role.
These are CIOs who think strategically outside the space they operate in and who have an interest in people and consumer behaviour, she says.
The role also involves stakeholder management. “You will work across the organisation, you have to develop good relationships with everybody.”
The most effective Chief Data Officers are visionary leaders. They inspire and motivate people, are team builders, skilled at developing relationships, encouraging collaboration and managing change.
The CDO understands the strategic priorities and sees how data can help the business advance in these areas, and how to present it in a way all divisions of the company can understand and use, she says.
They combine technical skills (data literacy, analytics, governance and infrastructure), with people skills (stakeholder management, influencing and leadership) and strategic thinking (linking data to business strategy and objectives, and using it to inform customer, culture, communications and business model innovation).
“It also helps if they’re a great storyteller and visualiser of data – so that everyone across the organisation, regardless of how technical they are, can understand and be inspired by the value data can add,” she says.
“It’s a rare combination of skills – they could come from a technology background, digital, marketing, insights, or strategy, but at the core they need to have a good understanding of how to combine structured and unstructured data to make a business more agile and intelligent.”
The evolution of the role
The role, she says, evolved from the early days of governance around data. These include ethics surrounding the collection of data, while ensuring there are proper control and systems around data to ensure it was of good quality.
''But these roles are evolving more into; OK, what is the strategic opportunity around the data that we have. What data do we not have but need?
''Part of the art of this whole space is understanding how to connect the data that you don’t have, and connect it with your data.
“The data has value, it is an asset. We need to work with it to create value for our business. It is not something to be scared of, it is something to be rejoiced.
“One of the key areas we look at is the flow of customer information and data around the business, and whether it accelerates or limits the delivery of purpose. So we’re creating that link between what the business wants to achieve and how data can contribute to it.''
She says the Purpose Business works with companies to prioritise what they need and gets the right measures and delivery systems in place, to inform better decisions, drive innovation and create long-term value.
“If you don’t have a clear sense of purpose, if you don’t have data to make decisions, you are not going to be customer centric,” she explains.
“You will just pay a lot of lip service to your purpose. And when the rubber hits the road, the customer is the last person you think about.”
She says the chief data officer can also help the organisation deal with technology and market disruption.
There is a human element in data, she says. “Without interpretation, data is just noise.”
Farman says her experience at Colmar Brunton, where she was a CEO for four years and managing director for 10 years, influenced her view of the need for the role.
The growth of technology and digital channels mean that businesses have more data on their operations and customers than ever before, she says. But it has little value unless it’s understood and used by the organisation to grow and thrive.
Recent research by IBM revealed that organisations with a Chief Data Officer are analytically mature, customer centric enterprises that outperform their competitors by a factor of 130 per cent. The CDO function provides a competitive edge in today’s digital marketplace.
“In disruptive and fast changing markets, it has never been more important to be customer-centric, and anticipate future needs,” she states.
“Data is central to making this happen. But in many cases its potential to inform better decisions and create commercial value is not being realised.
“Without a centralised view of the data ecosystem, getting the right data, in the right form, to the right people to make timely decisions is a huge challenge.”
She says often the data is in different format, hidden in silos across the organisation. “This decentralised and fragmented approach creates huge duplication and wastage.”
She cites the case of a pricing team that has invested in a sophisticated price modelling tool to help them measure elasticity and maximise profit. That same information could be repurposed for the sales team to influence retailer support, but the two divisions have no understanding of each other’s needs, so the opportunity is lost.
The company recognised this and charged the organisation's IT and analytics team with building a custom market information system, which aggregates and disseminates ‘one version of the truth’ to the fingertips of decision makers around the globe.
The time that data professionals used to spend on resource-intense digital reporting is now used to create insight, deliver strategic advice and build business cases for transformational change, she states.
The most effective Chief Data Officers are visionary leaders, she says. “They inspire and motivate people, are team builders, skilled at developing relationships, encouraging collaboration and managing change.”
She lists some of the key skills for the role:
Data and technology literacy: ''They need to know how to read and interpret all kinds of data, and how technology can be used to store, analyse, disseminate and generate value from it.”
Big picture thinking: “Setting the data priorities and strategy for an entire business requires a high level vision of the organisation and its strategic priorities.”
People skills: “The ability to relate to stakeholders at all levels and across all disciplines within the business, as well as managing a high performing multi-disciplinary team.”
Ethics: Data accuracy, security and privacy are key, and the CDO is the ethical “data conscience” of the company, she states.
Innovation: “Ability to use data to identify new business opportunities and models that increase revenue or decrease costs based on data learnings.”
Leadership: A “charismatic leader” for a data-driven culture within the company, able to inspire at all levels, and a champion of the importance and business value of data.
So what can organisations do in the next 12 months to ensure there are benefits from the data they have?
First, define your vision.
“Start with a clear understanding of what you want to achieve,” says Farman. “What stage are you at in terms of data-centricity, and what role do you ideally want data to play within your organisation? Once you have clarity around where you’re heading with data, you can start developing the roadmap to get there.”
Second, develop your data strategy.
Not all data is created equal, and a comprehensive data strategy helps ensure your priorities and investments are aligned with your vision, says Farman. “Identify what data the business needs, how it creates advantage and drives value. The key is to ensure that any investment in data has a measurable impact - a clear link through to a strategic goal or objective and a specific action outcome.”
Third, connect the dots to “supercharge value”.
There’s way too much money and effort spent generating more data, when what really matters is the ability to connect the dots and find the value in the information you already have access to, she says.
Farman says some of the most progressive organisations like Air New Zealand, Spark, Amazon and Nike are leading in this area.
“They’re incorporating non-native data and external data streams, advanced analytics and digital technologies to disrupt their competitors, transform their customer experience and create new business models.”
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