Chief Data Officers Are In Trouble, Part IV: Where Does The CDO Role Go From Here

This article was co-written by Randy Bean, Senior Advisor; Author, Fail Fast, Learn Faster. Lessons in Data-Driven Leadership in an Age of Disruption, Big Data, and AI.

This article was co-written by Wade Munsie, former CTO of Controlant, CDO of GSK and The Royal Mail and multiple winner with Global Data and Analytics Leader of the Year.

This series began by exploring how data leaders are increasingly being subsumed into IT, seeing their scope reduced, or simply being made redundant. We then examined the drivers behind these trends, followed by last week’s post considering how organisations can move forward—and the risks they need to be mindful of. Since then, we have received countless comments and engaged in conversations with data leaders, often focusing on the question of “what next?” Today, we are writing for them as we ponder future CDO career trajectories.

Missed part III or want a refresher? Read it here:

First, we must address the critical question: is the CDO role going to disappear? While we do not think so, we expect to see less people with this title. Critically, we no longer believe this will be an executive role in most organisations—and therefore not a true C-suite mandate. Since only a handful of CDOs we know have held seats on the executive committee, this is less a radical departure from the status quo than a recognition of this reality. In time, the CDO might increasingly be replaced by a VP or Head of Data, even as the demand for data and AI leadership grows. Data leaders are required, just not in the board room.

One could argue that the CDO role, like the Chief AI Officer role, is transitional. Over time, both might disappear as data and AI are embedded across the business. Similarly, digital natives like Google, Facebook, and Apple have never appointed CDOs because data is simply a part of their corporate DNA. 

Where leaders are able to hold on to their CDO title, it will be through a ruthlessly focus on value creation. It is now time to “show me the money.” They need to demonstrate measurable business value from investments in data and AI, and critically, they cannot solely focus on data management. Interestingly, this was a point the original "Data Scientist: The Sexiest Job of the 21st Century" article made about data scientists—and this quote certainly applies to CDOs too: 

"It’s important to keep that image of the scientist in mind—because the word 'data' might easily send a search for talent down the wrong path. [..] A data management expert might be great at generating and organising data in structured form but not at turning unstructured data into structured data—and also not at actually analysing the data."

The exception—where we expect to see CDO roles regardless of value creation activities—are businesses in regulated industries. Ironically, in the U.S, major banks were the first to be mandated to hire Chief Data Officers. However, their focus on risk management and regulatory requirements meant they have often been slower to leverage data for value creation, like customer acquisition. Similarly, in regulated industries like law, financial services, or insurance, we find many first-generation data offices. However, as noted above, someone purely focused on data governance can hardly be considered a Chief Data Officer.

What's in a Name?

That said, does all the fuss about the CDO title really matter? During our conversations with global data leaders several themes emerged:

1. Call me what you want—as long as you give me the mandate! 
2. I do not need a huge team, but I need central resources to help unlock business value (easy sell) and ensure good data quality (harder sell)
3. Do not move me under IT as we are not a service function (a recent trend, and a risk we addressed last week)

First of all, the mandate is of prime importance. Without the authority to provide overarching direction, it is not only impossible to enforce good data governance but it becomes massively wasteful. An organisation would be far better off not hiring a data leadership role in the first place, vs. hiring one without a proper mandate. To realise data's value, organisations need the right support in place, with the ability to drive data and AI transformation across the organisation.  

Second, there is the operating model. Gone are the days of huge central teams with a business partnering model. The spokes are getting bigger and better connected. Still, efficient organisations need support from a central function to ensure deduplication of efforts, quality of data, and scalability of products and services. Organisations need to invest here, particularly given AI's ascendency.

Third, there is the CIO/CTO debate. Yes, IT should own the data platform. Yet, the major difference between data and IT is that data is a value driver and not a service. Data teams should be measured on business impact and not reduced to service level agreements (SLAs) and total cost of ownership (TCO) calculations. Leading organisations seem to share this view, with Randy’s recent annual CDO survey finding that roughly 75% of CDOs currently report to business leaders, with just 25% reporting to IT leadership. We wonder if this ratio will change.

If organisations are able to address these three asks, it seems they can streamline their executive teams and obviate the need for the CDO title, while keeping their data teams engaged. This seems a sensible compromise. Data leaders might not end up at the top-table with that shiny C-suite title, but they will have the tools they need to succeed—and ability to deliver business impact.

That said, for those ambitious data leaders who are dead set on becoming and/or remaining a part of the executive committee—how can they pivot their careers for long term success? We see three main categories of roles for them to pursue, depending both on personal strengths and organisational context/maturity.

1. Operational Leadership Roles, such as a Chief Commercial Officer or Chief Operating Officer. Driving the P&L and end-to-end value creation in the organisation, leveraging real-time data capabilities and customer data.
2. Strategic Leadership Roles, such as a Chief People Officer or Chief Strategy Officer. Understanding the need to build a data-driven organisation, shaping roles, tools, and processes, and defining the strategic priorities.

"The faster the pace of change in the tech/data space the greater the need to build and maintain a culture that enables change and adoption and remains curious about the next big thing. 'Applied business', with data at its core is still in its infancy globally and a generation of training is needed to mobilise the workforce." — CDO considering a CPO move

3. Technology Leadership Roles such as a Chief Information Officer or Chief Technology Officer. Leveraging experience in enterprise architecture, vendor management, and data integration, to power the business with technology.

Endgame

Where is the ceiling, for those with their eye on the executive committee? To be frank, we do not see CDOs making the jump to Chief Executive Officer in an enterprise context. Typical pipeline candidates like CFOs and COOs are groomed for years to take on the CEO mantle. How many CDOs are being prepared in the same way? While we have theories as to the underlying reasons, part of the challenge might have been the CDO community’s insistence that the CDO was a fully-baked C-suite role—in other words, the pinnacle of an executive career.

Now that this has proven not to be the case, talent development would do well to ponder the fate of data leaders in the organisation. After all, many of the qualities you need as a CEO are also the qualities of a good CDO—the ability to think both strategically and tactically, the ability to glean insights from data, the ability to effectively partner across the business, an understanding how digital tech is impacting customers, a deep appreciation for how data and AI are changing operations, and the ability to drive enterprise-wide transformation.

"We have been so focused on the word 'data' in data leaders, in many cases we have failed to put sufficient emphasis on the need for leadership." — Recruiter

So, reflecting on everything we have learned, is all of this bad news for data leaders? For the CDO role as it was being described 5-10 years ago, perhaps. The dream of an exco leadership role owning and running data seems to have been dispelled. But here it is important to differentiate between the role and the talent. Given evolving organisational needs there is an incredible opportunity for data leaders to step into roles that promise great opportunity for impact. Whether Operational, Strategic, or Technology, each of those domains would benefit from a data leadership profile. While CDOs might not find themselves in the C-suite right now, board members should look to data leaders as potential successors.

We know that the global demand for data and AI leadership will only increase.  Data and AI leaders must learn to adapt and play whatever role is asked of them—doing what they can to delivering operational efficiency and realising organisations' strategic ambitions. They need to stop talking about platforms, dashboards, and data assets and learn to speak the language of the boardroom. Those that adapt will be the leaders of the future—in the C-suite and beyond.

– Randy, Wade & Ryan

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Cover image by DALL·E