By Peter Jackson, Chief Data and Analytics Officer, Exasol
The chief data officer (CDO) is rapidly emerging as one of the most important members of the C-Suite, and is a permanent fixture in two-thirds of companies, according to some studies. But MIT Sloan research finds that the CDO role is well established in just 30% of organizations.
Why might this be? In order to find out, Exasol — the high-performance analytics database — surveyed 250 active CDOs from across the UK, the US and Germany, and made some eye-opening discoveries. In this article, I’ll give you a sneak peek into some of these findings, and I’ll also give some practical advice about what you can do to ensure far more success in your CDO appointment.
But before we do that, I think it’s important that I clarify what the role entails.
The CDO is generally responsible for leading and building a data strategy that supports the wider business strategy and objectives. “The chief data officer needs to demonstrate the value of data, treating data as an asset, building data literacy and making sure better decisions are being made due to better insight and intelligence,” said Abel Aboh, Data Management Lead at the Bank of England and a participant at the CDO Summer School run by data expert Caroline Carruthers and myself.
The CDOs that get this right can deliver impressive results. In fact, according to research from Gartner, “They are also 2.3 times more likely to be effective at reducing time to market and 3.5 times more likely to be effective at data monetization.”
However, as Aboh explains, carving out a successful position isn’t always easy. “You’ve got to have a bit of maturity in an organization…,” he said. “If not, then you can see the passion of the CDO go out of the window — and they will ultimately leave.”
This is because of a number of common pitfalls.
The role is poorly defined
According to a Harvard Business Review article, the reason that so many CDOs fail is often because their role is poorly defined. CDOs typically have multiple roles, often with little consensus about their priority. What’s more, it’s almost impossible for one person to perform all of these diverse roles effectively.
Cultural change is problematic
Cultural change is proving difficult. Almost half (42%) of the CDOs Exasol spoke to said they face a resistance to change within their organization, with over a third (37%) pinning the blame on a lack of C-suite buy in. Over half (51%) agree that C-Suite / senior management aren’t willing to embrace the level of change required to become a data-driven business.
There’s not enough investment in infrastructure
CDOs are also commonly held back by their infrastructure. Antiquated technology systems are often the biggest barriers to data liberation. Breaking these down to achieve data democratization is key, but not always possible if the CDO has little control over budgets.
Data literacy is lacking
As if this wasn’t enough, a lack of data literacy is proving to be a significant roadblock to success. 38% of the CDOs Exasol spoke to say they face poor data literacy across the organization, and even more (45%) say there’s a lack of relevant data skills across the organization.
This is a worry since the ability to effectively communicate findings from data has never been more important. In fact, according to Qlik research, large enterprises with strong corporate data literacy have shown up to 5% higher enterprise value.
All of these challenges result in incredibly short tenures for the average CDO. 1 in 5 (17%) of the CDOs Exasol spoke to have only lasted one or two years, the majority (30%) lasted between three and five years, and just a quarter (24%) lasted over five years. Some research suggests this is far lower than other C-suite roles.
How to set yourself up for success
There are ways to solve these problems, however. Here are some key takeaways that can help any organization that is looking to make the CDO role a success:
Get your house in order before recruitment
It’s important that senior leaders are educated about what the CDO role really entails, and what the role can actually bring to their organization. Half (50%) of the CDOs Exasol spoke to believe the value of the role is not yet recognized in the business world and most of those (46%) agree that an organization’s expectations for the CDO role are too high and misinformed. 41% say they face unclear role expectations, while over a third (36%) believe the C-suite doesn’t understand the CDO role. 44% agree the CDO role is not understood by other departments/business functions. It’s important to understand that the CDO role is no longer about simply governing data – it’s about liberating it. Set realistic expectations around this, along with achievable goals, and you will be better placed for success.
Embrace technological change
Create the right environment and infrastructure in which your CDO can thrive. Exasol’s research revealed that almost half (48%) of CDOs are held back by legacy applications, and 46% say outdated data management infrastructures; scale and data volumes are a problem. Meanwhile, 43% face performance limitations with things like data analytics. As a result of all of this, 40% of the people Exasol spoke to agree organizations don’t have the technology stack required for a CDO to excel. Take the time to invest in the right technologies that allow you to break down silos and democratize data. Identifying your current analytics maturity is a good place to start.
Don’t discredit applicants from non-technical backgrounds
There’s huge value in hiring from diverse, non-technical backgrounds. Experience in roles such as HR, marketing and the arts can bring a lot to the position. Most (59%) of the CDOs Exasol spoke to see the value in hiring from these kinds of backgrounds. And, although the majority of respondents to the survey (59%) have remained in the same sector throughout their career as a CDO, a fairly high proportion from the UK and USA (45% and 42% respectively) have jumped between sectors. This demonstrates that CDO skills are transferable — and 78% of the CDOs Exasol spoke to agree that this is the case.
Foster a blend of technical, interpersonal and storytelling skills
In a Gartner survey, “93% of CDOs reported that effective communication is critical to the success of their roles.” And 95% of the CDOs Exasol spoke to said the same. Data storytelling is an essential part of this. According to TDWI, data storytelling is “the practice of building a narrative around a set of data and its accompanying visualizations to help convey the meaning of that data in a powerful and compelling fashion.” Set the right conditions for your CDO, so that they can translate data into business results. Give them the right technology so that they can focus on people. And hone their data storytelling skills so that they can:
- Engage and influence stakeholders and
- Improve data literacy at all levels of your organization.