Chief Data Officers Are In Trouble
Last week at Big Data LDN, there was significant buzz around the latest industry developments, from generative AI to real-time analytics. Yet behind the scenes of conferences like these, a sobering trend is playing out: CDOs are losing their jobs at an unprecedented rate. Whether they are being pushed out, made redundant, or find their mandates and budgets evaporating, the end result is a talent market saturated with data leaders. While the role comes in various forms, there is no doubt that the Chief Data Officer—in its current guise—is in trouble.
“I have certainly spoken with more data leaders looking for work in the past year than in all my previous years working in this space.” – Recruiter
Considering that as recently as five years ago the Chief Data Officer role was hailed as a critical addition to the C-suite, what went wrong? This issue goes beyond budget cuts and raises important questions about the definition of the CDO role, the management of data within organisations, the future of executive committees, and the impact of generative AI. As former Chief Data Officers ourselves, we aim to explore these topics through a series of articles with the goal of catalysing a broader discussion—given the significance of this shift.
Clearly, a key driver has been the financial pressure organisations have faced over the last 12-18 months. As executive teams have scrutinised budgets, frustration has mounted regarding the lack of impact of data initiatives on operating margins. This is concerning given that companies have invested tens, if not hundreds, of millions into building data capabilities and acquiring data platforms. As one retail executive remarked to Ryan, “All we have to show for [our efforts] are prettier dashboards.” While few CDOs had considered profitability one of their KPIs, they are certainly being challenged on it now.
“We’re seeing a shift in where ownership for strategy and impact around data really sits. CDOs are increasingly second in command.” – Jason Foster, Cynozure
Initially, data organisations were somewhat exempt from such scrutiny—not just because of the role’s novelty, but because data was seen as a silver bullet for customer acquisition, optimised value chains, and faster financial reporting. Data was the new oil, and data scientists were unicorns. Now, however, the shine has come off that unicorn horn. Data science has become mainstream, with dedicated degrees, automated tools, and crossover courses. There is even AI to help you write AI. Wade spoke to a head of data science at a FTSE 100 business who was proud they had not seen any staff turnover in the last two years. Surely, this is a red flag regarding the health of the market—jobs are no longer there.
While many organisations are still hiring data engineers, scientists, and analysts, the maturation of the industry and the sophistication of tools have led to a cycle of decentralisation. These roles are either being integrated into technology organisations under a CTO or CIO or being absorbed by the business. This transition resolves the dilemma of whether data teams represent a cost centre or a profit centre—clarifying ROI discussions accordingly. Where CDO roles are being backfilled, they are often rescoped or demoted to fit this new reality.
They are making my role redundant as they want to drive efficiencies by bringing the data engineering team under the CTO and folding the analysts into the product function. Clearly I hired too well!" – Chief Data Officer
These changes are significant and span industries. The two main exceptions we have observed are organisations with a regulatory requirement for named data governance roles, and those businesses that are lagging and are still on their first iteration of building a data team. In the former scenario, ROI is not a primary concern; in the latter, the CDO still has a grace period to prove their worth. That said, it is important to note that the changes we are witnessing do not automatically represent a failure on the part of the CDO. The underlying causes are manifold. Next week, we will delve into these reasons in more detail.
We look forward to hearing your thoughts, comments, and of course challenges!
– Wade & Ryan
Cover image by DALL·E