Why is Data becoming established in the C-Suite?
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Over the last decade, we have seen the seniority of data and analytics roles grow in various types of organization. Chief Data Officers (CDO) have become increasingly popular, as the most senior role of those roles within a company.
With the passing of time, those roles continue to operate and it feels like the CDO is now an established presence in today’s boardrooms. Why is that? Given the demand we also see for Analytics or Data Science leaders, why has the CDO reached the top first?
Although there are a few businesses with Chief Analytics Officers or Chief Scientists, many appear satisfied with a CDO at the top for now. Wondering why, I’ve been chatting to some of those data and analytics leaders we have placed. A few common themes have emerged, to perhaps explain this pattern.
MBN have been tracking this in the market as we posed this question, back in 2013, to an audience of senior data professionals at an event we hosted in Home House, London: “How many of you anticipate a Data professional sitting at C-Suite level within the next few years?”
The response from the audience was striking. Of almost 80 individuals in the room, only 2 raised their hands.
So, I thought I’d share what those conversations have taught me.
Which type of CDO do you mean?
More leaders reminded us that the acronym was often first used for Chief Digital Officers. As many businesses recognized they needed to catch-up with technological innovation and customer demand, those digital leaders were appointed to lead the charge. Apparently, more recently, a number are now challenging the need for that type of CDO (as digital needs to be a core part of their business, marketing and service strategies, not a separate function).
Let’s stick with CDO meaning Chief Data Officer, for our conversation.
Data is Foundational
The first explanation for the rise in popularity of CDOs, or why the data leader got to the C-Suite first, is its foundational role.
Whether the challenge is to improve marketing effectiveness, or service satisfaction or customer understanding or face into industry disruption. All these strategies will need data. Apparently, poor data quality or lack of required data, is a common reason for CXM initiatives failing or organizations not getting the data they expected from Data Science teams.
Recent reports have also stressed the criticality of data to the performance of your marketing. Both “Life events – the hidden marketing key to solving customer churn” from DataIQ and “The New Rules of Engagement” from the DMA, share research that event triggers and targeting are the most important factors. It’s interesting to see that sometimes it’s more about having the right data for timing/relevance to the customer, than building a predictive model.
GDPR is the new “burning platform”
Even if a number of businesses first appointed CDOs to close those capability gaps, a new rationale has emerged. The most popular reason I was told, was regulation.
Despite the changed world we are told to expect post-Brexit, every commentator seems to agree that the General Data Protection Regulation (GDPR) still matters. I imagine you know that the GDPR is a new set of common data protection rules, agreed by the EU and due to come into force by May 2018.
The most eye catching element has almost certainly been the significant increase in potential fines. With penalties of potentially up to 20 million Euros or 4% of global annual turnover, the scale of risk is sufficient to get any CEO’s attention.
The GDPR will not come into force until 2018, but given the scale of potential changes needed by organizations, it’s not surprising that C-Suite’s need someone now to lead the planning. Ensuring positive unambiguous consent, implementing a right to be forgotten, designing systems to be compliant from the outset and complying with opt-outs for ‘profiling’ analytics. All those, and more potential changes, could create a huge number of IT projects.
Those companies required to have a registered Data Protection Officer are also required to have them reporting at this ‘highest management level’. So, a number of large scale data processers, will be practically required to have a CDO.
The CDO as Conductor
Protecting businesses from such a significant change/risk sounds like enough work, to keep a leader busy. So, you might imagine that CDOs are mainly spending their time working with Chief Risk Officers and data controls. Apparently not.
Despite what it may say on role descriptions, or in strategies, the CDOs we have placed, tell a different story. It sounds like a large part of their role is coordination and sometimes ‘peacekeeper’.
Today’s businesses appear to get more and more complex. A lifetime of IT projects, mergers and acquisitions, together with all those ‘end user computing’ apps – these have left a baffling data landscape. Diagrams often look more like a post-apocalyptic vision of ‘spaghetti junction’.
But someone needs to know where the data is, where it ought to be and have a plan for connecting the two. In walks the conductor. To avoid just a cacophony of noise, successful CDOs need to orchestrate those many different instruments. Their ability to avoid delaying business progress, whilst also reducing key risks and steering data towards a coordinated plan – that alone surely justifies their C-Suite seniority.
Where is your career going?
Whether you have reached this level of your career yet, or not, it’s likely that data and CDOs will matter to your career in future.
If you’d value the opportunity to talk over how your career is developing, or check up on the skills you might need for that future, do get in touch. MBN is always happy to help. After all, we’re on this journey together and with the data available, so much more will be possible. Exciting times and roles ahead.