The Seven Roles of a Company’s Chief Data Officer
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- The Seven Roles of a Company’s Chief Data Officer
Tamr & Harvard Business Review
Featuring Randy Bean, CEO and managing partner of consultancy NewVantage Partners and co-author of the recent HBR article, “Are You Asking Too Much of Your Chief Data Officer?”
Since the first chief data officer (CDO) was appointed at Capital One in 2002, the role has been plagued by confusion about its purpose.
Initially, when most CDOs were in large financial institutions, their most common roles were defense-oriented, involving data security, privacy, quality, and regulatory compliance. More recently, companies have also increasingly expected CDOs to be offense-oriented, focused on revenue, marketing, customer service, and better decision making. But most organizations do not clearly define the role of their CDO and expect far too much from this position.
So, what is the purpose of a company’s chief data officer?
Randy Bean will discuss the purpose and jobs of CDOs. He will share insights into:
- The increase in the prevalence of the CDO role
- Confusion over the responsibilities of CDOs
- The seven distinct jobs of CDOs, including both offense- and defense-oriented jobs – like chief analytics officer, data entrepreneur, data governor, and more
If your organization has a chief data officer or is contemplating establishing this position, watch this webinar to learn how to best structure this role to meet all of your organization’s essential data-related needs.
Speaker 1 (00:00:30):
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Speaker 2 (00:01:19):
Welcome to today’s Harvard business review webinar, the seven roles of a company’s chief data officer I’m Julie Deval editor for special projects and webinars. And I want to thank all of you for joining us today, and I want to thank Tamer for making this discussion possible. We really want this to be an interactive webinar. So if you have questions or comments at any time, just type your question in the box in the lower left corner of your screen. If you need help at any time, click on the help icon in the lower right corner of your screen. We also have a conversation going on on Twitter. You can find us at HBR exchange and use the hashtag HBR webinar. Since the first chief data officer was appointed at capital one in 2002, the role has been plagued by confusion about its purpose. Initially, when most chief data officers were in large financial institutions, their most common roles were defense-oriented involving data security, privacy, and regulatory compliance.
Speaker 2 (00:02:24):
More recently companies have also expected them to be on offense oriented, focused on revenue, marketing, customer service, and better decision making. But the reality is that most organizations do not clearly define the role of the CDO and they expect far too much. So what is the purpose of a company’s CDO today? Randy Bean CEO, and managing partner of consultancy, new vantage partners and coauthor of the HBR article. Are you asking too much of your chief data officer we’ll discuss the purp purpose of the CDO and share insights into why the chief data officer position is now commonplace inside organizations? He’ll explain some of the confusion over their responsibilities and the seven distinct jobs of CDOs, including both offense and defense oriented jobs like chief analytics, officer data, entrepreneur, data, governor, and more Randy Bean is a noted author speaker and thought leader in the field of data-driven business transformation. He is a contributor to Harvard business review MIT, Sloan management review Forbes, and the wall street journal on topics like big data AI and the role of the chief data officer being as founder and chief executive of new vantage partners, a strategic advisory firm, which he founded in 2001. Randy, thank you so much for joining us today,
Speaker 3 (00:03:56):
Julie, thank you. It’s a pleasure being here and, uh, I’d also like to, uh, acknowledge and thank Andy Palmer and, uh, my friends at Tamer. Hopefully you’ll find the next hour’s discussion. Interesting and informative. I’m going to speak a little bit about how the CDO role came to be, uh, my background and how that has come to coincide with the rise of the CDO role. And then I’m going to share with you a bit of data because as we all know in the CDO community, it’s all about the data. So, um, the CDO role, let me just say a couple of things. Uh, about 20 years ago, in 2001, I started a small little business and the focus of that business was advising fortune 1000 senior leaders on how they could manage data as a strategic asset at that time responsibility for data, uh, for the most part resided with chief information officers, uh, organizations, not knowing exactly where to place data, keynoted data information.
Speaker 3 (00:05:02):
So therefore that should be the C executive, uh, who had responsibility for data, uh, after establishing the firm. One of the things that we started doing was setting up industry round tables, where we’d bring together, uh, the top executives from fortune 1000 responsible fortune 1000 companies that have responsibility for the data initiatives. Again, typically this was CIO, but also sometimes chief risk officers, as well as line of business executives. And over the course of the two thousands, there was a number of, um, uh, uh, factors that started to change how organizations looked at data. Uh, first of all, there was a tremendous proliferation of data. So organizations were saying data in greater variety and volumes that they had ever seen before. There was also the emergence in the late two thousands of this notion of big data, um, and bringing new tools and technologies that could manage data in a variety of different ways and make it more accessible to business decision makers.
Speaker 3 (00:06:09):
In 2008, we had the financial crisis. And as a result of that, one of the key recommendations was that organizations needed to, uh, identify an executive that had responsibility for data initiatives across the organization. And it was really at that time that the role of the chief data officers started to emerge and as things would have it, one of the colleagues in our firm who had been a long time advisor and part-time consultant was actually named to be the first, uh, enterprise chief data officer of a top, uh, bank. And that was a fellow named Joe Smilow ski, who was named to be the first enterprise chief data officer at Citibank. So had a, uh, close proximity to, uh, the evolution of data in the industry and the establishment of the CDO role and its emergence as a profession. So I’m going to, um, share some data with you in terms of, uh, one of the things that came out of our executive breakfast was a request to start an annual survey.
Speaker 3 (00:07:18):
Uh, this came from a CIO of JP Morgan at the time. And what the executives wanted to understand was they were hearing a lot about now big data and they were starting to see firms make a greater commitment to data initiatives and starting to identify executives, to be chief data officers. And they really want to understand what was the state of the industry so that they could make a determination about where they wanted to play, uh, whether they want to be leader as followers or with the pack. So with that said, I will, uh, jump into our slides. So, uh, one of the thing that I’ve mentioned here as was that as data became popularized and as the CDO role started to emerge, I started to be asked to, uh, speak and write on the topic. And in 2014, I was asked by the wall street journal, uh, to write a monthly column on big data and its impact on the industry, which I did for two years.
Speaker 3 (00:08:20):
So, you know, the way I described it as sometimes data in the past was something that people did often a corner by 2014, 2015 data had emerged to the point that the wall street journal wants to have a regular column on it. And, uh, organizations like Harvard business review now have webinars on this topic. So it’s a long way that data has common data professionals have come in 20 years, uh, as mentioned by Julia at the outset. My remarks today are based upon an article I co-wrote with, uh, my colleague, Tom Davenport, uh, who many of you may know from his, uh, uh, formative work competing on analytics. And the article was about our organizations asking too much of the chief data officer. I mentioned at the outset that, uh, my small firm conducts an annual survey of, uh, fortune 1000 C executives. And I want to share some of the results of that survey.
Speaker 3 (00:09:23):
First of all, I’ll mention that, um, the, the survey is made up predominantly of large financial services firms and I’ll, um, make a few comments on why that’s the case. First of all, large financial services firms invest significant amounts of money in their data initiatives. It’s not unusual for a large, uh, financial services firms to invest tens of millions or even hundreds of millions of dollars. And one of the reasons why is because each of the customer relationship is of such high value to the firms. It’s not quite like if you’re a consumer package goods firm and you’re selling say Weedies at however much a box of weenies cost these days versus, uh, a financial services customer. It’s, they’re very, it’s very costly to get, keep and grow those relationships. In addition to financial services firms, we had large print participation from healthcare and pharmaceuticals or life sciences companies. One of the reasons why is this is one of the fastest growing area of data usage. And if you think about it, 2020 has significantly catapulted the use of data in the life sciences and healthcare, largely as a result of the COVID-19 pandemic and the desperate need to organize and aggregate and understand data in a meaningful fashion. And then there’s some other prominent industries and companies represented yeah.
Speaker 4 (00:10:58):
On the survey,
Speaker 3 (00:11:03):
Uh, as mentioned, uh, this is just a little bit of background on the distribution, as you can see, uh, financial services predominates, uh, and then healthcare. And in terms of the survey participants as mentioned, this is a senior executive survey and Tom Davenport once said it was unique among, uh, surveys because it focuses at the senior most executives in fortune 1000 companies that are responsible for data. So as you can see are roughly 73.2% of the respondents have held either the chief data officer role or the chief analytics officer role, which for many organizations have now been combined. And then there’s our representation by, uh, chief information officers where, uh, responsibility for data still within some organizations. And then, uh, some other respondents, including some CEOs, chief marketing and digital officers and chief strategy officers.
Speaker 3 (00:12:07):
So a little bit in terms of, uh, what organizations are doing in terms of data and where they’re investing. So as mentioned, we first, uh, initiated the survey in 2012. So this, uh, the 2020 survey was our eighth survey and we’ve just launched, uh, the process for our 2021 survey, which will be our ninth survey. As you can see investments in big data, as well as data driven, artificial intelligence is almost universal among the fortune 1000 organizations that responded and organizations are increasing their investments. So firms investing greater than $50 million, uh, is up to nearly 65% from just, uh, under 40% in 2018. Um, so, and a significant percentage of firms, nearly 20% are investing greater than $500 million to that point about, um, firms are not shy about investing in data initiatives,
Speaker 3 (00:13:14):
But as Jolene noted at the outset, there’s been a lot of confusion, not only about, uh, the CDO role, but how to manage, uh, data within an organization. And this is a slide I would like to, uh, spend a couple of minutes on and then maybe, uh, pause for a question or two. So, um, firms are struggling to become data-driven progress is slow when we look at business adoption of data initiatives, uh, nearly three quarters of organizations, point to the fact that this remains a challenge. Um, and, and then when you look at, uh, some of the measures of whether organizations are being effective at using the data, it’s really kind of an astonishing story because you see that, uh, only half of organizations report that they’re using or leveraging data as a business asset, uh, barely a quarter have established a data culture within their organization, which is, uh, pretty telling, um, where even though a majority of organizations are driving some type of innovation with data, a majority of organizations still indicate that they’re not competing and data in it and the analytics and, uh, and even greater percentage indicator or a lower percentage indicate that they have yet to create a data-driven organization.
Speaker 3 (00:14:36):
So clearly though, uh, organizations have come a long way in 20 years, there’s still a long way to go. You know, one of the things that I say regularly, uh, in advising organizations is that data is a journey. It patients, uh, it’s not something that happens overnight. Uh, I have a colleague once it was actually Joe Smilow ski from, uh, who went on to city group that said, you know, meaningful change. And most of these organizations that seldom happens in less than a decade. I recall going into one organization about six or seven years ago and meeting with the president in this case of the commercial insurance lines. And he said to me, uh, can you work with us to put in place a data strategy that will transform our organization? So that will be data-driven within the next 90 days. You know, I, I felt that I needed to walk out of the room because it’s really a such a long journey. And to set an expectation of 90 days is, uh, you know, you can start the process, but there is so much to be done. I’ll, I’ll pause for a moment to see if, uh, Julie has any questions from the audience.
Speaker 2 (00:15:49):
Yeah. Thank you, Randy. Um, one question. So the slide where you showed all of those companies, and you were talking about the financial institutions that are tend to be larger, um, what advice would you have for a smaller organization? Um, you know, who may not think they need a chief data officer or they’re just too small? Um, any advice for those?
Speaker 3 (00:16:10):
Yeah. Um, smaller organizations I think have that much easier in most respects, the, the challenge with large organizations, fortune 1000 companies is, you know, if you leave aside Amazon and Google and Facebook, and those companies that were born during the past 20 years and largely started up as digital data companies, legacy companies that may be generations old are well over a hundred years old, they have a data that’s basically been pulled together and exists in legacy environments and pulling those legacy environments together as a real challenge. So when you have a Greenfield opportunity, if you’re a smaller organization, you don’t have the massive complexity that large organizations face. Um, and in terms of whether you need a CDO, that’s something we’re going to talk, uh, at length about in this conversation today. Uh, you it’s worth noting that organizations like Amazon and Google and Facebook traditionally, haven’t had chief data officers, because if you’re data-driven to begin with you, you, you don’t have the problem. It tends to be organizations that are struggling to be data-driven that have moved to a name, a chief data officer in an effort to provide a consistent strategy, rationale, and approach for dealing with data. So small firms, um, as well learn from the discussion, each firm needs to make their own determination, but, uh, small firms may have an easier,
Speaker 2 (00:17:53):
So I’ll ask one more question. Um, cause a lot of people are writing in about the culture, um, problem, um, and why it’s taking so long. Um, so someone’s asking you a question, um, is it that organizations aren’t prioritizing this work? Is that the reason for this, the lack of progress? Um, why is it taking so long?
Speaker 3 (00:18:13):
Uh, well, if there was an easy answer to that, I think all of these companies would solve the problem overnight, but what I can tell you and what you’ll see in a minute is that when we ask organizations, what’s the biggest challenge to becoming data-driven and only 10% of the instances is it cited as technology, 90% of the time it’s cited as cultural issues. And that can be change management, business adoption, organizational alignment, all those sets of issues that organizations come across when companies are trying to do something that’s new and different and different in the ways that things have been done in the past. So, uh, becoming data-driven represents a huge cultural challenge. I’ll just tell one anecdote, uh, right now, and that is often I walk into organizations and I may meet, and this is not to criticize anyone, but I may meet with the, uh, data organizations and the technology organizations.
Speaker 3 (00:19:12):
And they’ll say we’ve invested tens of hundreds of millions of dollars in these wonderful capabilities. And I say, well, you know, that’s very impressive. Then I go meet with the line of business executive, the president of a particular, um, be it consumer or commercial, uh, business who was closest to the customer. And they often say, you know, I understand these investments have taken place, but we’re not getting data faster. We’re not getting it in a form that’s meaningful when we need to make decisions with our customers. So we’re not saying the business results and outcomes that we might’ve hoped for. So that’s representative of the cultural issues. You may have the capabilities, but there are things that need to be done in terms of communicating the benefits, making sure the key constituencies have the right data that they need at the right time. And I could go on and on, but I’ll, I’ll pause there.
Speaker 3 (00:20:05):
Okay. Thank you. So just, uh, moving to, uh, the next slide and, uh, you know, I’d mentioned that, uh, creating a data-driven organization remained a challenge. And I just mentioned as a matter of fact, that the biggest challenge was cultural. So, um, I can move on from this slide. And what you can see is that over 90% of executives identified a people business process and culture as the biggest challenge. So jumping into the role of the chief data officer, I mentioned that we started this survey in 2012. And when we first did the survey 12 of the survey of the companies that would surveyed, indicated that they had appointed a chief data officer that had actually risen to a high of, um, 67.9% in 2019 and dipped a little bit in 2020. One of the questions I’m asked is why did it dip? And I’ll give an example.
Speaker 3 (00:21:07):
Uh, American express is the firm that have worked closely with over the years. They appointed a chief data officer in the early 2000 tens. I believe it was about 2012 or 2013, a person named Vencat [inaudible], uh, who led that function for a number of years. Uh, about three years ago, uh, he left the firm and I met with the executive that he reported to when he expressed that, uh, American express did not intend to fill the chief data officer role immediately because they wanted to step back and rethink it and how it could be effective in the organization going forward. Um, the good news is that American express filled the role this past summer. Uh, Danielle crop is the new chief data office of there, but a number of organizations have, uh, taken a pause to, uh, rethink the role of the chief data officer and how it can be affected just a few, uh, anecdotal pieces of information here.
Speaker 3 (00:22:12):
I mentioned that our colleague Joe Smilow ski was hired in May, 2009 to be the first enterprise chief data officer at city group. Uh, since that time city group has had, uh, more than five, uh, executives hold the chief data officer role. So that tells you, uh, something in Citi group is not unique in that regard. Um, Wells Fargo is on the third or fourth, uh, chief data officer, uh, Charles Schwab is on the third or fourth chief data officer, and it’s not a single out those firms, but to say that this is a representative, it’s been a highly, uh, transient role, um, for the past five or six years, I’ve been hosting, uh, an annual chief data officer keynote panel at the MIT on the other side of Cambridge, uh, chief data office and symposium. And I took a look at the, uh, participants of the panel participants in 2017.
Speaker 3 (00:23:12):
There were chief data officers representing American express, who I’ve mentioned Vencat general electric and GlaxoSmithKline. None of those chief data officers are in those positions today in 2018, uh, held the next panel, uh, with three chief data officers, including chief data offices for Morgan Stanley and general motors. Uh, only one of the three executives that participated that year is still in the CDO role in 2019 head a panel with, uh, four chief data officers and, uh, three of those forests fill on the role. So that’s, um, that’s an improvement and this past summer, which is just, uh, three or four months ago now held, uh, the most recent chief data officer, uh, symposium. And there were five CEOs on that particular panel. And, uh, three months later, four of those five still remain on the role, but one of the five are no longer risk, so that, um, highlights the transience in that role.
Speaker 3 (00:24:16):
And we’ll discuss, uh, some of the reasons for that. It’s also worth noting in this particular slide we ask each year, uh, who has primary responsibility for data within the organization. And it’s worth noting that it’s still less than half of organizations that, uh, indicate that this responsibility lies with the chief data or chief data and analytics officer and still, uh, over a quarter of organizations report that, uh, point out that there’s no single point of accountability for data in the organization. So there’s organizations continued to struggle with how to manage data as well as who should be responsible for data within the organization.
Speaker 4 (00:25:05):
Uh, Tom and I wrote earlier this year
Speaker 3 (00:25:07):
Are in Harvard business review about the, uh, seven distinct roles of a chief data officer. And, you know, we, we probably could have made it five or we could’ve made it 12, but some of the ones that we noted, uh, historically it’s worth mentioning that, um, particularly following the financial services crisis, as Julie noted at the outset, the chief data officer role was largely, um, put in place for, for defensive purposes among major banks. It was a little bit of a check the box type of, um, designation where the bank could indicate to the regulators that they’ve identified an executive that now had responsibility for insurance, uh, compliance and regulatory, as well as, uh, data risk within the organization. Um, over the past decade, the, uh, the roles continued to evolve and there’s been a push, uh, for organizations to begin to look at the chief data officer in terms of its offensive responsibilities, primarily revenue, generation, customer growth, new product development.
Speaker 3 (00:26:20):
And, and this has manifested itself in a variety of ways. Uh, one of the, the examples we pointed to was the data entrepreneurial, which, uh, who had a focus on looking for opportunities to monetize data for the organization. Um, we also a couple other things that you’ll see in the, in the data ahead is, uh, chief data officers come from a variety of different backgrounds. So some come from the technology background and they tend to be focused on issues around data architecture, data management, around issues, around data curation, introducing modern data architectures. You also have chief data officers that come from the analytics background or more focused on the various types of modeling, uh, techniques and approaches, and there’s organizations such as MasterCard, Joanne Stonier, there, a chief data officer who actually comes from a legal background and in her role, she, she and MasterCard are very much focused on issue of privacy and ethics.
Speaker 3 (00:27:26):
So there’s no one size that fits all. It depends upon the company and each company has been creating their own spin or their own emphasis on, uh, what they would like the chief data officer to be. And so, uh, th this is highlighted a little bit, these disparities disparities and the next set of data. And I will pause for a question after this. So, uh, one of the things that we ask each year is, uh, whether the CDO has revenue responsibility within the organization, so that ties to issues of monetization and revenue growth. And as you can see, it’s still a very small minority of organizations. Uh, 12.3% in 2020, where the CDO has been assigned this type of responsibility. They may partner with revenue generating organizations, but in terms of having a bottom line authority, uh, that has, uh, seldom been granted today to the chief data officer.
Speaker 3 (00:28:27):
And then this is one of my favorite slides, if you will, or favorite questions in the survey we conduct each year. And that is that we ask the organizations and executives, what is the profile of a successful chief data officer? And as you can see this really five, uh, primary, um, qualifications that organizations value in a chief data officer, and this has shifted a little bit over a time when we did it in 2018, it was more, uh, equally split among the five roles. But let me just highlight what those are. One is, uh, an external change agent, an outsider, somebody that’s new to the company and is bringing a independent or objective mindset because the organization is looking to fundamentally do things differently. And the percentage of organizations that are looking for an outsider to come into this chief data officer role has increased.
Speaker 3 (00:29:28):
It was barely over a third in 2018, and now it’s close to have, so organizations seem to be trending in the direction, at least in the present time of thinking that they need to bring in somebody with an external perspective. Um, what is declined a little bit was that, uh, organizations were looking for somebody that was deeply ingrained in their company, the inside or somebody that was familiar with the culture and that person personably could get things done because they knew how to get things done within the organization. But that percent has decreased over time. That might suggest that as well, the intention then inside of my B if they don’t know what it means to undertake the data transformation that is too steep of a learning curve, and it really takes somebody who has that skillset and mindset, um, that that’s one possible explanation, a third
Speaker 4 (00:30:27):
Group of, um,
Speaker 3 (00:30:29):
Our set of qualifications. So line of business executives who own business results, and this ties back to that previous point about achieving business outcomes, because if you don’t achieve business outcomes, the investments in data, it’s hard to justify in any increasing percentage of organizations are looking for somebody that has that line of business executive experience. So they can always be thinking about data and asking the data questions in the context of, uh, what is the business outcome? What is the measurable result? Um, how is this going to generate more revenue or increase, um, our, our customer base. And then the two other criteria that I pointed out is the data scientists or analytics leader, a number of organizations have looked at people with deep analytical skills to fill the role, and then the technology executive. And those would be, uh, persons with deep skills and data architecture, data management.
Speaker 3 (00:31:26):
So we really see across the board, um, chief data officers possessing, uh, at least one of those sets of skills. And then the last, um, last, uh, question or point that I make on this particular slide is in terms of the long-term role of the chief data officer in 2018, uh, exactly half of the organizations surveyed believed that the CDO should sit on the executive board of, of the company. And that’s decreased steadily over the past couple of years. And it seems to be a realization that although the chief data officer is critical, um, for whatever reasons, it hasn’t, um, quite attained that, uh, level of, uh, responsibility or mandate within the organization, such as the chief financial officer. And then there’s one other item that I’d point out here, which I think is very intriguing. And that is, is the percentage of respondents who answered that the CDO is an interim role or unnecessary, and to be phased out. And you could say that the people that responded to this, maybe just don’t like CDOs, or maybe their CDOs themselves, who realized that once an organization goes through a successful data transformation, even though it takes time, you get to that state where like a Google or an Amazon or a Facebook you’re fundamentally data-driven. So it’s embedded in the DNA of the organization and every aspect of the culture. And, uh, so an executive in that role is no longer necessary. So I’ll pause here for some questions.
Speaker 2 (00:33:14):
Yeah. So a lot of people are curious about, um, the background of chief data officers and where they came from. Um, and also the decrease of this position in the C-suite. So our chief data officers reporting to the CEO, or are they reporting into other functions, whether it’s the CFO or, or perhaps the CIO?
Speaker 3 (00:33:35):
Well, that’s a great question. And, uh, I actually made some notes on this, uh, because it’s, it’s fascinating and it continues to evolve. Uh, when first started doing the survey, it was interesting to see the various manifestations of where the chief data officer reported. So I can tell you that at that time, it was very common for the chief data officer to report to the CIO. It was really seen as some form of technology function, and that was the case that among other organizations, G E Citi group, uh, bank of America, but there was other permutations as well. Uh, JP Morgan at that time, their, uh, chief data officer reported to the CFO or chief financial officer. So a different focus, uh, Charles Schwab at that time, their chief data officer, uh, reported to their chief marketing officer, uh, MetLife, their chief data officer reported to their chief digital officer. One of the evolutions that’s taken place. Uh, and an example of that would be citizens bank, the CIO and the chief data officer are now co-equal and report to the, uh, head of technology and operations. And we’re saying that as an increasing trend among a number of organizations where the, um, chief data officer and the chief information officer are coming into parody and reporting to a chief operating executive that has responsibility for operations and technology across the organization.
Speaker 2 (00:35:17):
So what about some of the softer skills, um, in leadership? So are you seeing any chief data officers that actually don’t have much of either a finance or a data background, but they’ve, you know, they’ve gone to business school, they’ve been in leadership positions, they understand the connections between business units. Um, are any of those kinds of, um, CDOs successful?
Speaker 3 (00:35:38):
Yeah, I mean, um, I was an English major. I never went to business school. I think it’s, um, I think the most important, uh, qualification and in many respects for chief data officers, the ability to communicate, uh, sometimes I, I know some of the CDOs that, uh, that attend our executive breakfast. They like to joke that the chief data officer, the CDO really stands for chief diplomacy officer, because you’re really integrate interacting with all aspects of the business. Uh, you have to, you, you know, data starts with, uh, production and ends with consumption. So you have to know all of the areas where data is produced within an organization, and you have to work with the executives and those parts of the organization. And then you need to know how data is consumed and used by the organization. So you have to have a good working relationship with the executives that put data to work.
Speaker 3 (00:36:42):
So, um, you know, I know I, I suspect that many of the participants in this call come from deep analytics background or deep technology background, uh, but it’s important to be an effective communicator. And, you know, I encourage, uh, CEOs to, to try to speak in business terms wherever possible. Uh, I can relate an example from about 10 years ago where the president of a large financial company said, um, somebody said, how come you’re not investing in these data initiatives? And the individual said, well, they keep on coming into my office and talking about MDM and all kinds of acronyms. And I don’t know what that is. And until I can speak in business terms and articulate the business benefits, I’m not going to sign off on the investment. So I would just, um, make that point that the more you can speak the language of the, uh, business executives, the more, uh, hopefully successful you will be.
Speaker 2 (00:37:44):
So I’ll ask one more question and then we’ll, we’ll have you continue, um, a lot of people have questions about the distinction between a CIO and a CDO. Um, what are some of the, um, sort of strict lines and lanes that you can draw between the two?
Speaker 3 (00:38:00):
Uh, I’ll just call it as I see it these days. And that is, uh, w we sometimes joke that CIO stands for chief infrastructure officer. It’s really about making sure the infrastructure works. And often that includes cybersecurity in migration to the cloud and activities of that kind. Um, but data is really, um, something that’s, uh, a line of business asset. Ultimately it needs to be transformed into a, uh, a form that a line executives can put it to work. It’s more, I don’t know the right way to describe it, but, um, it, it ties closely to the vertical lines of business, as opposed to a horizontal infrastructure capability. That’s one of the things that’s tricky about data, data flows to one organization. It’s hard to put it in a box. It’s hard to define the group in any one particular way. And that’s one of the reasons why organizations have struggled to figure out the best way to manage data within the organization and to identify the right set of skills to have that responsibility.
Speaker 3 (00:39:14):
So, uh, let’s see. I will just, um, finish with a few slides here. Um, the point here is that chief data officers are gradually moving onto the offense, but, you know, I, I tend to have some degree of skepticism because I know my friends is chief data officers that love to be doing more offensive, innovative, um, monetization type of work and less regulatory work. But at the same time, it’s often the regulatory work that justifies the position. In other words, the regulatory and compliance work is the need to have. And the revenue generation is the, the, the nice to have not to say that it is in critical, but if, um, if you’re not in regulatory compliance, you might not be in operational existence. So in 2020, a majority of, um, CDOs indicated that they were now focusing on authentic tasks. Um, that’s, that’s good news for, from my perspective.
Speaker 3 (00:40:28):
Um, however, and this is the, the, the most telling or, uh, concerning thing. And that is that we asked, um, the executives who participate in the survey, whether the CDO role is successful and established, and, um, you know, how the organization is fairing today and only 27.9% of executives reported that the CDO role is successful and established within their organization. And that’s evidenced in part by the high turnover that continues to take place. Uh, a majority of executives indicated that it was nascent and evolving. So organizations were still struggling and making efforts to define what is the appropriate role of the CDO and, uh, tweaking that and shaping that. And a quarter of organizations indicated that they were very much struggling with turnover on the role. So it remains a work in progress. Uh, you know, I mentioned that the outset, um, the data about less than half of the organizations competing on analytics and managing data as an asset, and, uh, my colleague and coauthor, Tom Davenport, you know, his response was well, that’s actually a great progress from when, you know, I wrote competing on analytics 20 odd years ago.
Speaker 3 (00:41:55):
So in a sense, it depends whether you look at the glass as half empty or half full, and I’m sure that most chief data offices would like to think that, um, you know, organizations were further along in terms of their data initiatives, but the good news is that they are further along than they were in the past. And, uh, moving in the right direction, if not at the, um, not at breakneck speed. Um, so just in closing, circling back to the article, um, we looked across the CDO universe that we interact with and had identified roughly seven roles ranging from offense to defense. A couple areas that we’re seeing more of is organizations paying much more attention to, uh, data ethics and ethical use of artificial intelligence and starting to just starting to define standards around that and making that a part of the chief data officer role.
Speaker 3 (00:43:02):
Um, but you know, there is no magic bullet or secret blueprint for success. Uh, so sorry to disappoint for those who expected the, um, the easy, easy to swallow a pill, uh, each organization must define the role based upon their needs, uh, how they operate as a business. What is their distinctive culture a lot depends upon the maturity of an organization relative to data. And, uh, at the outset we mentioned that, uh, capital group are non-Catholic with capital one, I’m sorry. Uh, had appointed a chief data office of back in 2002. For those of you who don’t know, uh, capital one is a major bank. It was founded roughly, uh, 30, maybe 40 years ago now. And it was founded by, um, a group of executives that were focused exclusively on data and analytics. And we’re thinking about how they could, uh, apply data and analytics to financial services, right, right from the get-go.
Speaker 3 (00:44:06):
So capital one has always been a North star in terms of leadership and data and analytics, but I can tell you today, and in recent years, top executives at capital one, uh, ask us and participate in our round tables and say, how can we continue to be at the forefront of data leadership? Because it’s not something that you get to, and then it’s all done. You have to continue to, um, to invest the time, the effort to stay on top, to stay ahead, to, to evolve as the industry evolves. Uh, you know, it is a journey there’s no, uh, there’s no rest. There’s not like you can get to the top of the Hill and sit there. There’s always companies looking to leverage data and analytics to compete effectively. So you always have to be doing everything you can to, uh, figure out how to, um, compete in the marketplace and do a better job than, uh, you, your, your competitors.
Speaker 3 (00:45:10):
Um, there’s additional reading on this topic. As a matter of fact, today’s a timely day because the, uh, institution on the other end of Cambridge, I have a, um, article and MIT Sloan review, uh, that was just published this morning. Why chief data officers must assume leadership for data success. Uh, but as you can see here, a number of pieces in Harvard business review and MIT Sloan review, and then write a couple pieces of month in, uh, Forbes. And one of the ones, or the one that I wrote wrote most recently is called, uh, the failure of big data and failures in quotes. But it talks about the expectations in the late two thousands in early 2000 and tens. And the assumption or expectation that now a set of big data capabilities were created. Everything would be solved. Companies would be able to, um, provide data instantaneously into the hands of, um, business users overnight.
Speaker 3 (00:46:16):
Uh, I’ll close my formal comments on one anecdote. And that was about eight years ago. I happened to stomach through a college alumni magazine and saw that a former roommate of mine had been appointed, uh, assistant secretary of defense for research and development with a, I’m going to say a trillion dollar budget. It was a very large number. And I, I sent him an email and said, Oh, you know, congratulations on the job. Uh, here’s what I’m doing these days. And he said, big data. He said, can you come down to the Pentagon and speak to us as soon as possible because that’s, uh, um, one of our largest mandates. So I said, sure. And in a couple of weeks, I went down to the Pentagon had never been inside before, went through layers and layers of security, surrendered, cell, phone wallet, all those types of things.
Speaker 3 (00:47:06):
And I walked into a boardroom and there was roughly 18 people, uh, and about a third of them had on business. So it’s about a third of them had on full military uniforms with a lot of metals. And about a third of them had on camouflage fatigues. I had no idea who the decision makers in the room were, but the first thing they said was, well, you deal with private industry. So, uh, you, you, you can help us out here because we spend 80% of our time analyzing our data and trying to come up with good quality data are, they said, we spend 80% of our time preparing our data, I should say, and trying to, uh, get good quality data and only 20% of our time analyzing it. And we’re sure that the fortune 1000 and private industry has figured this out. And I said, sorry to disappoint you, but it’s exactly the same challenges that you face.
Speaker 3 (00:47:57):
It turns out that they were analyzing data. You know, w if I’d go to American express, American express is analyzing data to execute a marketing campaign. And at the Pentagon, they were analyzing data to conduct military campaigns and use the example of a drone strike and whether they had sufficient data to, um, make a decision. So this is a common problem, whether you’re a small company, whether you’re a retail or whether you’re a financial services firm, or whether you’re an organization like the Pentagon, how do you get good quality data? How do you get it into a format that you can make business decisions and do that effectively? Um, so I’m happy to answer any questions that, um, that you have.
Speaker 2 (00:48:42):
Sure. Well, you just answered one. Um, someone had a question about, um, the government and more public, so it’s public sector. So it’s good to hear that everyone’s facing the same challenges and it’s not unique to one sector over another. Um, but getting back to, um, the transient nature of this position, um, why do you think it’s so transient? Is it because of what you’ve been saying all along that too many chief data officers are, are handling too many things?
Speaker 3 (00:49:09):
I think part of it is because, um, large corporations, fortune 1000 corporations, because they’re new to managing data as an asset, they haven’t had clear expectations. So initially it was like what, we’ll name somebody with responsibility, for data, and, uh, that that should take care of things, but it’s only as executives have inhabited this role that organizations have to come to identify, uh, the challenges in terms of, uh, the different parts of the organization that an executive has to work with. And that’s why we say that the job is in many respects too much, or that organizations are asking too much of their chief data officers, because if you’re managing all of the suppliers of data and all of the consumers of data, then you’re establishing policies. And then you’re making decisions in terms of analytics, approaches, and decisions around a modern data architectures and curation tools.
Speaker 3 (00:50:15):
And whether you migrate all of your data to the cloud and the risks associated with that, and data ethics and privacy, it, you get stretched so thin it’s hard to succeed. And one of the failings or downfalls for any chief data officer is that, you know, if you’re a line of business executive and you look at a piece of data that, you know, well, and it looks wrong, then it calls into question all of the data. And then you question the ability of the chief data officer. And you say, why this piece of data that I know well is wrong. How do I trust any of the data? So it’s a very tough role, um, th to be successful in, you know, as a chief data officer, you don’t typically own the data, you’re shepherding the manager management of the data. So, you know, as they say, if you start off with bad data or, uh, um, junk, if you will, it’s hard to transform that in, into high quality data. So you have to be managing the practices from end to end.
Speaker 2 (00:51:24):
So we’ve talked about sort of the differences between the CIO and the CDO. What about the chief analytics officer? Um, how did they fall under the chief data officer? What are, what are the differences?
Speaker 3 (00:51:36):
So what you’ll see now is that, um, most organizations are at least a significant percentage of them. They now have the CDA, Oh, the chief data and analytics officer. So it’s been combined into one role. And what I’ve noticed, which has been interesting is that I used to go to a number of the CDO, a number of the industry CDO events, and the discussion was more around data architectures, modern data, architectures, data, curation, data, quality initiatives of that kind. And now, uh, the conversations tend to be more about analytics approaches. So have seen a number of, uh, executives from analytics background step into the senior data roles. Uh, Cigna would be an example of Gina per push. There, uh, comes from a strong analytics background. And we’re saying, uh, Mo more and more of that.
Speaker 2 (00:52:31):
So I want to get back to the culture. A lot of people still have questions about that. It seems so hard to define, um, who needs to really lead and drive the culture. Um, say you’re a new chief data officer inside a company, is that the responsibility of the CEO to sort of pave the way
Speaker 3 (00:52:50):
It needs to come from the top of the house. It needs to come from the board. It needs to come from the executive committee. The though I will tell one small story. And that was, they was about seven years ago. We were holding one of our executive breakfast, uh, with CDOs or a CDO equivalence from, uh, major banks and fortune 1000 companies. And as it so happened, there was a front page story in the wall street journal this morning, talking about the great success that leading banks, unfortunate 1000 companies were having with managing big data and the quotes from the top, most executives in those organizations, uh, if not the CEO, the chief operating officer or the head of, uh, data, uh, head of, uh, operations and technology. And they each cited major inroads that the, their organizations were taking in terms of data. And when, uh, turned to the people in the room, they said, either something along the lines of, well, this is the first I’ve heard of this.
Speaker 3 (00:53:54):
All we talked about this, but I didn’t know that we were carrying forward this into execution or it’s in its early stage. So one of the things that see is that it’s beneficial for organizations at the top of the house to, um, be able to make the case that they’re data driven and using data in their business. Um, it looks good for the firm and it sounds like they’re doing the right thing, but that doesn’t always trickle down or manifest itself in terms of what the organization is doing in terms of its day to day execution. So having support, uh, from the top of the house is critical, but that needs to be, uh, embodied at all parts of the organization. Some of the things that see or has said most often is it’s within middle management, that a number of these initiatives, uh, T T tend to fail the there’s actually a lot of grass roots, uh, from people that have come out of school and joined the firms within the past five plus years, a real, you know, th th they come out of school with stronger skills and data and analytics, and a real desire to do new things and to, uh, change the speed and the processes by which a data and analytics are done within their organization.
Speaker 3 (00:55:15):
But often the barriers of those executives who have been within the organization tend to 25 years, and it represents a significant change, and it’s not easy to do. Their intentions may be good, but it’s a complicated.
Speaker 2 (00:55:29):
So for any of the CDOs in our audience, or maybe they’re, um, a very senior, um, data officer in their company, not quite the CDO. Um, do you see any, anyone in these positions moving up to CEO, or if not, what, what is their natural career path, um, after CDO?
Speaker 3 (00:55:48):
Well, I haven’t seen that yet. Um, it certainly, and, you know, I’m, I’m not sure I can even say that I can recall, um, chief information officers moving into, sit into the CEO role and that’s, uh, a role that’s existed for much longer, um, 30 or 40 years. So, um, you know, it, it, it takes a little bit of time, um, as mentioned organizations like capital one, uh, they’re data-driven organizations from their origins. So in many respects, CEO breathes and things like a CDO. So, um, you know, it’s, it’s what, we’ll see how things play out over time. And I should mention too, the Amazon school goes Facebook. Um, those heavily data-driven organizations, you know, they’re, they’re fundamentally run by executives that embodied the chief data office of mindset.
Speaker 2 (00:56:50):
Yeah. That’s, that’s helpful. Um, so back to becoming data-driven, um, which you were talking about at the beginning, is there a realistic timeline, um, for companies, or does it depend on your size or industry?
Speaker 3 (00:57:04):
Well, um, there’s two ways of looking at it. One is, uh, back to that point, I made about, uh, it takes a decade to really change anything. Um, but on the other hand, if you look at it and I don’t look at it on a day-to-day basis, but if you look at like the Dow 30 stocks or the, um, hi, the largest companies in terms of market capitalization, that’s changed radically over the past decade or over the past two decades. And a lot of the most highly capitalized firms in the world, you know, Amazon for example, are, uh, data-driven organizations. So can companies stay in business and make the progress progression to being data driven over a time? Yes. Um, are they going to catapult into the largest market cap firms, uh, unlikely those firms that can seize the opportunity to become data-driven and do it more rapidly, are most likely going to experience the greatest market capitalization growth. Um, but you know, companies are defined in large respect by their customer base, and if you can satisfy your customer base, you can, uh, you know, develop your data capabilities more modestly over time.
Speaker 2 (00:58:31):
So I think we have time for one more question. Um, and I’m going to put you on the spot, cause I know the seven roles, they’re all very important obviously, but if you had to pick one, um, that is the most important, um, what would you say that it is and why?
Speaker 3 (00:58:47):
Uh, there’d be sharp disagreement. Uh, um, so, you know, I, I think, uh, thinking about data from an innovation perspective is something that I have a bias towards because, um, you know, I like to see it when companies can, can transform and, uh, do things that they’ve never done in the past and leverage data in a way that radically changes how they do business. So, so radical change as opposed to change.
Speaker 1 (00:59:22):
So I’m biased to organizations that kind of go all in on data and think about it as a truly transformative capability.
Speaker 2 (00:59:31):
Well, Randy, this has been a great presentation, but I’m afraid we’re out of time. I want to thank all of you for joining us. And I want to thank Tamer for making this discussion possible. This concludes our presentation, have a great day