Why today’s CDOs will be future CEOs
Helena Schwenk, Market Intelligence Lead, Exasol, explains why CDOs are the CEOs of the future.
What would you say is your organisation’s most valuable asset? In a recent survey, 77% of 1,000 IT directors think it’s data. However, data is not the be-all and end-all. Yes, businesses recognise the potential of data and the role it can play to improve performance, but sadly they aren’t investing enough in deriving real value from it.
Many organisations face significant challenges when it comes to using their data, including not having the right people, the right skills or a robust data strategy in place to analyse and take action based on data insights. This inability to generate insights through the analysis of data can have a negative financial impact — something 72% of respondents in the same survey recognised.
Caroline Carruthers, author and data champion, explains it in this way: “Currently, most businesses are ‘data hoarders’, wanting to get their hands on as much data as possible. However, without people with the skills to understand how to process and use that data, the questions needed to improve data use are not being asked within the organisation. The data is available, but those without experience in data handling don’t know what they don’t know, so they can’t use it to its full value.”
The emergence of the CDO
Addressing these people-centric demands has given rise to many new organisational roles, the most senior of which is the Chief Data Officer (CDO). Skilled in both understanding data and how to apply insights to business operations, CDOs are one of the most valuable business leaders.
Subsequently, the number of CDOs has dramatically risen over the last few years. In 2012, only 12% of Fortune 1000 companies had a CDO, and by 2018 this figure increased to 67.9%, Forbes reports. And they are now integral to business processes and performance. KPMG finds that businesses with a CDO are twice as likely to have a clear digital strategy. Forrester states that a CDO is present in 89% of companies that have systematically harnessed data to improve their differentiation in the market and invested accordingly.
This exponential business impact and change is due to the level of responsibility the CDO has. Impactful CDOs lead the strategic direction of the company and understand and leverage data to support, shape and influence that strategy.
As a result, the promise of a CDO is that they can drive the business forward across the board, advancing innovation, operational efficiencies and revenue growth. Doing this relies on a breadth of knowledge and skills that span their organisation, from HR and marketing to sales and finance. This breadth means they can develop a strategy and infrastructure that is built upon every department having access to the data insights they need.
It’s this data-driven enterprise-wide approach that makes the CDO central to business success, and in possession of business skills, many traditional executives do not have:
Looking at core data and having the ability to see how it can be used logically to improve business practices
Selling the idea of change to stakeholders throughout the organisation (and them receiving it positively)
Owning the implementation of the transformation to become a data-driven business
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For organisations without a CDO, it’s currently the CIO and/or CEO that leads the charge on data insights. Deloitte found that 29% of companies had the CEO as its lead champion of data analytics. However, at the same time, 67% of business executives said they were not comfortable accessing or using data from the tools in their organisation and lack the skills needed to make insights actionable.
Data is a new part of these c-suite roles, which already consist of many responsibilities, and they need trained data strategists to interpret data and how to make the best use of it. A CDO, therefore, is required to play the role of demystifying data and facilitating its use at a functional level. Making data less scary and more open, so that not only every significant decision-maker understands the value of data-driven strategies but every employee – this drives real business change.
This way, data intelligence can inform business processes and efficiencies, such as the marketing department identifying new customer demographics or the security operations team a new way of working.
The unique positioning and responsibilities of a CDO to intrinsically understand their business and plan for its future with the whole organisation on-board places these individuals as natural candidates for future CEOs. Here are our five reasons why:
Data is a company's most valuable asset, and they are responsible for the management and use of it
The positive impact on every function within the business is thanks to their data strategy
Both the top line (revenue) and bottom line (cost reduction and efficiency) can be affected by the use of data analytics
They have a working knowledge of every function within the business
CDOs are true leaders and can align the organisation to their vision of data-driven business
As Caroline Carruthers states, “For those who have a passion for data, our imagination is the only limit of what we can achieve.”
For more information on all business in Europe, please take a look at the latest edition of Business Chief Europe.
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