The Evolution of the CDO

Nate Nelson: Hey everybody, and welcome to the Data Masters Podcast. My name is Nate Nelson. I'm sitting with Mark Marinelli, the Head of Product at Tamer. He's going to introduce the subject and the guest of today's show.

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Mark Marinelli: The CDO role has evolved over the years. Once responsible for data governance and data security, companies increasingly wants CDOs who are more business focused. Someone who not only saw that evolution but experienced it firsthand is Mark Ramsey who held the title of CDO when the role was very new. Mark served as a CDO twice in his 30 year career. In both times, he was the first CDO at major companies. He was the Chief Data Officer at Samsung Mobile, and then the Chief Data and Analytics Officer at GlaxoSmithKline. Now he's the managing partner at Ramsey International, a consulting company that helps businesses design data and analytics solutions. In today's episode, Mark shares his thoughts on the evolution of the CDO, as well as what it's like to be a company's first CDO, and if a company's reporting structure has a hand in that CDO success.

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Nate Nelson: Let's listen in to Mark Ramsey. Hey Mark, thanks for being here. So to start off with you have three degrees in computer science. Why did working in data and analytics appeal to you over other areas of technology?

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Mark Ramsey: Well, I think data is really become the new oil of decision making within organizations. And it has been extremely appealing to me over the last number of years of really helping companies determine how to use data as a strategic asset of the organization. And so because of that reason it's really something that I've been passionate about and have really dedicated the most of my career to really working with organizations on how to organize their information and really make it available for decision making.

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Nate Nelson: Now, the subject of our interview today is the CDO role, how it's changed over the years, how it changes between companies and so on. Mark, you became the CDO a number of years ago, back when very few existed. What was it like in those early days, did anything surprise you about the role at first?

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Mark Ramsey: Well, I think the role of the chief data officer when it was first established it really identified that there was a gap on how data can be used in the organization to solve new and exciting problems. If you think historically, capturing data, organizing data and making data available was really the role of the chief information officer within the organization. But that really focused on the operational aspects of the company. There really was not a role that looked at data and determined how to use that information in a completely new way. And I think that's really what led to the role of the chief data officer. And I think one of the things that really surprised me in the early days is this competition almost in an organization between the chief information officer and the new role of the chief data officer as whose responsibility data really was within the organization.

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Mark Ramsey: And I think some of that was just because anytime you have a new role, it's sometimes confusing within organizations of the purpose of the role. But I do think it took a number of years for chief data officers to really hit stride within organizations. And I think also what was happening in the early days was that the original view of a chief data officer was you could almost consider it as being playing defense. And so it was trying to focus on data security, data governance, data quality, a lot more tactical kinds of issues within the organization. And I think as things progressed the role really moved to be one of playing offense. And it's really looking at how data could be used as a strategic asset, looking how data could really drive additional value within an organization. So I think as soon as that evolution happened, that also removed a lot of the confusion around really the need for a chief data officer within an organization.

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Nate Nelson: Right. Now these days we're all in agreement that dealing with data the right way is important. But back when you started maybe it wasn't so obvious to everybody. Why did your first employer Samsung feel that they needed a CDO in the first place? How were they able to identify this need?

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Mark Ramsey: I think whether it's Samsung or pretty much any organization, I think what I've seen is because data and analytics is such a hot topic, and it's a boardroom topic. So senior executives within organizations are really trying to understand how they are using data and analytics. And if you go back a number of years ago, this was just when the concept of big data was really starting to be prevalent. So more and more organizations were talking about how they were using big data to completely change the way that their company operated. And you have to keep in mind that in that period of time, we were also seeing the emergence of new information based companies, like an Uber or Amazon was starting to hit stride, companies like Google were really hitting stride and continuing to have massive growth. Those organizations were really built around transforming an industry by using data as the key driver.

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Mark Ramsey: And so it really introduced a lot of interesting discussion topics at the board level of how do we make sure that we're using data within our organization? And in the case of an organization like Samsung, the president of the US operation had read Harvard Business Review studies and really started seeing a lot more focus on organizations using data to improve their decision making. And in looking across the organization, there was really not a focus on how to consolidate the information and use it to drive decision making within the organization. And so that's really within Samsung it was those senior executives that looked at it and said, "Look, we really need somebody to come into the organization and be the focal point for data and how we use data in a different way."

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Mark Ramsey: Because up to that point, like most organizations, they were very fragmented, they had operational systems, they were capturing data in many places, but they really didn't have a dedicated focus on using data for changing the way that the business operated. And it was exactly the same situation when I joined GSK, is that the president of the R&D part of the organization and his leadership really were trying to understand how to transform designing and developing new medicines and recognizing that data was a key component to that, and they really did not have a focus on how to use data in order to drive a lot of those decisions. So in both cases, it was really driven by the leadership recognizing that they had a gap. And a lot of that recognition came from the fact that there is so much publication material and media focus around how organizations are really using some of these advanced technologies to drive out better decision making.

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Nate Nelson: And how defined was the role back then? Did the executive team around you have a good sense of what they wanted from the CDO role, or was it more of an open-ended job?

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Mark Ramsey: Well, I've had the opportunity to basically build the CDO role and organization for two major corporations. And in both cases it was not well defined, it was really around help us understand our data strategy and how to use data as a competitive weapon in the organization. And it then really required starting from scratch, bringing together people within the organization, and then also supplementing that with external resources to really create a strategy and then begin to execute on that strategy. So I would have to say that in both cases the role was in concept they understood what they were trying to accomplish, but the role was really not well-defined, it was something that really needed to have structure around it and understanding the marching orders, if you will, over a 30, 60, 90, 120 day plan of really what the role would mean within the organization.

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Nate Nelson: So there may be folks listening to this who in the course of their careers have to make a jump similar to the one you're describing between industries or even just between jobs. What lessons did you take from your first CDO gig to your second, and what did you have to learn from scratch, being an entirely different industry?

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Mark Ramsey: Well, one of the things is, I mean I've been fortunate to be able to move across many different industries over my career. And I think one of the things when you go into a new industry, it's extremely important to understand the terminology that is used within that industry, because each industry has their lingo or their terminology, it's not even just acronyms, it's actually the work that they're doing and the problems that they're trying to solve, and it's really trying to understand that task at hand. What I would share with a lot of folks is that, I'm not a scientist, but I'm very familiar with data and analytics and delivering data to make strategic decisions as quickly as possible. And so there's a lot of the complexity around the data that I may not a hundred percent understand, but when you reach a certain point in every industry it becomes ones and zeros, right? It becomes the data that's stored in a system, it's analyzed in a system and so forth.

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Mark Ramsey: And so I think the challenge is really like I said, understanding that customized language that happens in each industry. And then one of the things organizationally is to have folks that are very deep in the actual industry, and they also have an understanding of data and to really operate as what I would refer to them as translators, right? It's to translate the need of the business into the terminology that is applicable for those folks that are delivering a data and analytics solution. And I think that's the learning is making sure that regardless of the industry is making sure that you have folks engaged that really do have a deep understanding of the business problems to be solved, but you can also take individuals that have a very deep understanding of data and analytics and the ability to architect solutions that solve these types of problems. And then put those two together, and really you end up with something that's quite powerful.

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Mark Ramsey: I think sometimes people limit the folks that they bring into a data organization only to those who actually understand the problem set. And what I've seen over time is that that really does create a very significant limiting factor into the talent, because you'll have a lot of folks who are very good at the architecture of building a large scale data and analytics solution, but they don't understand every industry. And I think it's critically important to manage the business understanding and the technical understanding and create a team that together can deliver a powerful solution, but not try to create a team that has both of those dimensions, because typically it's difficult if not impossible to find those resources.

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Nate Nelson: All right, so it sounds like no matter what the industry or the job, there are certain skills and environmental factors that make for an effective CDO. Now that you've been the CDO at different companies though, I want to ask about the flip side at different companies in different industries, are the CDO roles materially different or are they basically the same no matter where you are?

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Mark Ramsey: I think there's a continuum, right? I mean, I think I'm not sure that the jobs vary by industry. I think the need is the same. I do think across the organizations they have a different perspective on the role of the CDO. And like I mentioned earlier, I think there's the strategic CDO that works directly with the senior executives in the organization, looking at ways to transform the organization and use data as a strategic asset. So change the way that decisions are made, change how things come together in the execution of the company. And that is the category of a strategic CDO. I think there's probably from my experience maybe 30 or 40% of those folks who are called CDOs fit in that category of a strategic CDO. And then right now they're still a large percentage of the CDOs that are more, what I would characterize as tactical CDOs that are focused on concerns like data security and governance.

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Mark Ramsey: And I'm not saying that those are not important areas of focus, it's just those are not transformational within the organization, those are much more of the operational, tactical necessities, if you will of the organization. And so I think when you look across an organization, whether it's a bank, whether they're a collection of banks or retail companies, I think what you'll find is that the CDOs will gravitate to one of those two types of CDOs, and that is where the differences really lie in what the challenges are, what the areas of focus are? It varies a lot between those two types of CDOs. But if you have a strategic CDO in any industry, they will be focused on that dimension of really trying to figure out how to use data as much more impactful within the business. And the folks that are focused on the more tactical will traditionally be focused on governance and quality and security and those types of things. So that's the two areas where I see the variants, not necessarily between industries.

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Nate Nelson: Have there been any major changes in the nature of the position that you've observed over time?

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Mark Ramsey: Yeah, no great question. I mean, I think there have been some industries and some companies that have started with more of the tactical CDO role, and then once those challenges are handled, then they move into the strategic role of the CDO. And actually there's an excellent paper that was written by a team of researchers out of MIT that's called the Cubic Framework of CDO. And it does a great job of articulating these different dimensions and different characteristics of CDOs based on their research. And it is an evolution where people do start in many cases in one aspect of the role and then evolve the role. And I have seen that happen over years as well.

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Mark Ramsey: I think initially a lot of the roles were the more tactical, especially within the banking industry, where there were challenges on data protection and data lineage. And so a lot of the chief data officers for banks initially focused on that protective defense tactical role. And now if we fast forward five or six years, many of the banks now have the chief data officer role that is focused on how to create more value out of the data and how to leverage data in very different ways across the organization.

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Nate Nelson: Now, in another interview we did for this podcast, I spoke with Randy Bean from New Vantage Partners, whose firm every year does a study, which among other things tracks trends in the CDO role. He cited recent data that found that more often than not these days, executives believe that the CDO should report to the executive board rather than themselves be on the board. Mark, what's your belief? How does this vibe with you? Does it matter who the CDO reports to?

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Mark Ramsey: Well, it's always a popular topic and I know Randy and his team have done a great job over the last number of years with the New Vantage Survey and really seeing the evolving role of the chief data officer. I personally do think that it matters where in the organization the chief data officer reports. And I think my experience has been that where the role reports ultimately then determines the scope of the role and the impact of the role. And so those chief data officers that report to a CIO tend very much to be focused on the tactical role description that I mentioned earlier, whereas the chief data officers that report to a business leader within the organization, or that they're actually on the executive leadership team, they have a different aspect and tend to be more of the strategic CDOs.

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Mark Ramsey: Now, I think the fine grain to that, whether someone reports to the chief operating officer or the chief marketing officer, or the chief financial officer, or they're actually on the executive committee, I think there's less data around that. But again, my personal opinion is to have the most impact in the organization and to truly be the chief data officer in the name, they should be sitting at the table with the other executives helping to set the direction of the organization. And just like marketing is a extremely critical part of most organizations, how data is used to drive the organization has now become on par with that level in the organization. So my personal view is that the chief data officer should be part of the executive team, but I also caveat that with I have seen chief data officers be successful reporting to business leaders that are on the executive team. But I think that also is another metric as to whether the CDO is truly a CDO in execution, or if it's just simply a fancy title,

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Nate Nelson: But for CDOs who want that seat at the table, what can they do to get there?

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Mark Ramsey: That's a good question. I mean, I think many people aspire to be at the executive table, and just having the title, chief data officer doesn't really earn you the right to sit at the executive table. I think what earns you the right to sit at the executive table is bringing characteristics and decision points and opportunities to those leaders that they recognize is going to change the way that the business operates, right? So if you are able to create a vision around how data can be used to change the business and you're able to bring that to that executive level, and really there are many organizations where data is now the number one asset of the company.

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Mark Ramsey: And if you look at a lot of the information based companies, they may not even need a chief data officer because the culture and the way the entire company is designed is around using data for decision making. Most organizations, that's not the case. And that's why the chief data officer is an extremely important role to help the chief marketing officer, the chief financial officer, the chief executive officer, all of those executive leaders understand and push on the way that data can change the way that the business operates. And if you're bringing that level of thinking forward, then you're earning the right to sit at the executive table.

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Nate Nelson: How do you see the CDO role evolving in the coming years?

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Mark Ramsey: I think you will see... I mean, Gartner projects that 90% of the global organizations will have a chief data officer in place by the end of 2021. I think most organizations will have someone that they refer to as the chief data officer or the head of data or some similar term. I think the evolution in the future will be significantly increasing the percentage of strategic CDOs versus tactical CDOs. And I think today it's probably 60% tactical CDOs and 40% strategic CDOs. And I would say that over the next five years you're going to see that number flip, and really the chief data officer role will be significantly impactful in the organization as a business driver, not as a technologist.

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Nate Nelson: So with the experience that you've earned, what can you pass along for others coming up in situations similar to yours? What are the key ways that CDOs can make an impact at their companies?

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Mark Ramsey: I think the advice that I tend to give up and coming CDOs is to really make sure that they're spending at least 50% of their time focused on how data can be used to change the organization. And what I mean by that is creating a new service line within the organization, combining the internal data with external data to completely change the way that certain aspects of the business operate. And so it really needs to be a transformational role, not an evolutionary role, right? I mean, if they're measuring themselves on improving the data quality of the organization by 5% each year, or improving the data governance scores within the organization. Those kinds of things are not transformational and it really is not having the impact that is a potential for most organizations.

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Mark Ramsey: And so that's the number one piece of advice that I give to folks that are new in the role or looking to move into the role of the chief dat officer, is really make sure that the majority of the time is focused on how data and analytics are used to change the business and make it something that's a step change not just a small... I mean, if you're doing something and it's a 10% cost savings of the organization, that's I guess good for the organization, but if you can do something that accelerates the decision making by 50%, or you can completely change the way that a process works within the organization, that is something that really should be at the forefront of the chief data officer.

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Nate Nelson: So one last thing. I've been told that you developed a program using data and analytics in sports car racing. Could you talk for just a minute on the connection between data and racing, and what data is important to improving race performance?

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Mark Ramsey: Yeah, I mean, what's interesting is motor sports is probably one of the most data intensive sports. And some people may or may not understand this, but if you look at Formula 1 Racing, which is the pinnacle of motor sports, each one of the cars has thousands of sensors that is producing real time data that is being analyzed and fed back to the driver to make adjustments to the car. And so one of the things that really fascinated me about motor sports is there's certainly it's an exciting opportunity to participate in that environment, but the data aspect, fundamentally the things that are very important in motor sports around data is the breaking point. So when the car is getting ready to enter a turn where the brake is applied, how much brake pressure is applied, and then what speed the car makes the turn, and then when the gas is reapplied. So just some basic break on, how much brake, the speed through the turn, and then the applying the gas and how fast the gas is applied and the speed exiting the turn.

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Mark Ramsey: And so those data points are things that are tracked, and then you're able to actually compare one driver's performance to another driver's performance. And the way to improve is to understand that when you go out in the car and you're going to turn a lap the next time is each turn you're analyzing that breaking point, breaking pressure, corner speed, gas application and exit speed. And the real goal is to try to match that of a very high speed driver. And so the thing that really drew me into motor sports was this aspect of really using data and analytics to improve the decision making of the driver and continually get faster based on all of these different aspects.

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Mark Ramsey: And then trying to rationalize that data down into something that's consumable. And again, it's back to decision making, right? It's making decisions based on having data that is really providing insight into how to improve much like a business. And I guess the difference with motor sports is that it all happens in a split second, it's all real time, your consumption and processing of the data has to happen at a much higher rate than most businesses, but there's a lot of similarities in many of the same technologies that can be used to really execute and make better decisions within a business can be used to do the same thing within motor sports.

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Nate Nelson: That was my interview with Mark Ramsey. I'm back now with Mark Marinelli. Mark, what do you take away from that conversation?

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Mark Marinelli: I think a key point here is how Mark presents the proactive strategic CDO as the next phase in the evolution of the role. These are CDOs who don't just know how to use data to solve big business problems, they're on the hook to make it happen. So they're constantly looking for new opportunities beyond the steady unending stream of projects that's always coming at them. There may always be a place for a more tactical CDO, but like Mark said, data is becoming the number one asset at companies. So thinking creatively and innovating with new data applications is the hallmark of a truly successful CDO. I think that's applicable to CEOs who are just starting their careers as well as those who are more seasoned and still trying to figure out how to get a seat at that executive table.

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Nate Nelson: That'll just about do it then. Thanks to Mark Ramsey for speaking with me. And thank you Mark Marinelli for speaking with me. This has been the Data Masters Podcast from Tamer. Thanks for listening.