Are You Ready for a Chief Data Officer?

By now, everyone knows that there is huge potential in data. From reducing costs by improving quality, to enriching existing products and services by informationalizing them, to innovating by bringing big data and analytics to bear, data are showing themselves worthy across the board. Still, data do not give up their secrets easily. And most readily admit their organizations are unfit for data.

With all the excitement (and anxiety) surrounding big data and advanced analytics, it is not surprising that many organizations are naming Chief Data Officers (CDO) to manage their data needs. But I fear that too many organizations have sold the title short and are missing the opportunity to define a truly transformative role. You must be ready for a journey that, sooner or later, will touch every department, job, and person.

You don’t need a Chief Data Officer to put basic data management capabilities in place. Too many companies are a full generation behind, and acquiring those capabilities in a hurry may be necessary. But it does not demand a CDO.

You shouldn’t need a CDO to improve regulatory reporting. This is not to say that you don’t need to improve regulatory reporting — simply that it shouldn’t take a true C-band effort to lead the data work needed to do so.

You don’t need a CDO to ensure your IT systems talk to one another. Nor do you need a CDO to help analytics take root throughout the company. Both tasks are important, but they don’t demand a CDO.

A company only needs a Chief Data Officer when it is ready to fully consider how it wishes to compete with data over the long term and start to build the organizational capabilities it will need to do so. You need to be ready to charge him or her with fully exploring what it takes to compete with data. To gain some real end-to-end experience — perhaps making a concerted effort to try out advanced analytics in the hiring process, improve content in financial reporting, bring more data to decisions made by the senior team, and improve the quality of data used in marketing. To conduct enough tightly focused trials, free from the usual day-in, day-out encumbrances, so you can compete in a comprehensive fashion and at lightning speed.

The obvious question, “How do we use data to enhance our existing plans?” is not the critical one. If you’re still asking this, you’re not ready for a CDO. Rather, the most important questions are, “How does data allow us to do things that we’ve not thought we could do?” and “What if a competitor, perhaps one we hadn’t thought of as a competitor before, gets there first?” The distinction here is the ruthless determination to sort out which are part of a company-wide strategy and how they fit with and accelerate other strategies.

It is important to think through organizational implications. Even the most basic data strategy, if well executed, will require new people, new structures, and new thinking. Just consider, if you seek a string of profitable innovations, you probably need data scientists, to set up both a data lab and a data factory, and the stomach to deal with the messiness of innovation. Similarly, becoming data-driven involves the deepest cultural change that is fundamentally incompatible with a command-and-control management style. Silos are the mortal enemies of the data sharing needed to affect this strategy.

You’re only ready for a Chief Data Officer if you’re ready to develop a stone-cold sober evaluation of what it will take to succeed with your selected strategy and make some tough choices. When you expect him or her to drive something like the following:

Building a data-driven culture is probably our best bet. It is consistent with our values. There’s no kidding ourselves — we have a long way to go. Training and hiring are critical, so we need HR to step up its game.

We have to pay a lot of attention to big data. But in today’s environment, we probably cannot attract and retain the PhDs it would take to be on the leading edge. Let’s keep an eye on our competitors, especially the small fry, and partner up with a couple of leading universities and analytics companies. We need to aggressively import ideas from those on the leading edge.

We need to work aggressively on quality. We saved big time in the areas where we focused. People don’t use data they don’t trust. So we can’t be data-driven without it. Our Six Sigma program is decent enough, and our first choice is to leverage that effort for data.

Finally, you’re only ready for a Chief Data Officer when you have the courage to act. Seeing the opportunity that such a statement offers and seizing it are very different things. It’s plain enough that everyone makes decisions, just as everyone creates and uses data and so can impact quality. It will take real courage, over a long period, to drive data into every nook and cranny of the organization.

I’ve argued elsewhere that a full-on data revolution will, in time, change every industry, every company, every department, and every job. So there is some urgency here. Still, for most, when it comes to hiring a Chief Data Officer, “go slow to go fast” is the right approach. Go slow in reserving the title for a long-term, transformative role. You’ll go faster because you’ll not straightjacket your thinking to the issues of the day.

The Data Doc adds

Tremendous progress has been made over the last few years in all things data.   I see many “points of light,” especially in what is popularly called “big data,” “analytics,” or “predictive analytics.”  The data revolution is advancing.  Finally! 

Two inter-related points are on the top-of-my mind today.  First large corporations are not the only ones that can benefit.  But the message is just as relevant to departments and business units therein (no matter how big or small).   For example, a marketing department may not be ready for its own CDO, but it must have “better understand how we can ‘put data to work’ on its Top Three Priorities for 2015 list.  And it must have a real work program lined up against that objective.

Second is the growing urgency for quality!  I am sure readers grow weary of hearing me repeat the data quality mantra.  But frankly, I don’t see how you can successfully execute any data-related strategy without high-quality data.  You can’t sell (license, build it into your products, etc.) bad data (who would pay for it?); you can’t make data-driven decisions if people don’t trust the data; you can’t exploit the results of big data analyses because you don’t know how bad data will impact the conclusions; and you can’t be the low cost provider because bad data comes with so many hidden costs.  One element of the work program noted above must involve an aggressive data quality effort.

Dr. Thomas C. Redman, “the Data Doc,” is President of Navesink Consulting Group.  He helps leaders craft programs to get in front on data quality, learn to compete with data, and build the organizational capabilities to do so.   His most recent article, “Data’s Credibility Problem,” appeared in the December 2013 issue of Harvard Business Review and his fourth book, Data Driven:  Profiting from Your Most Important Business Asset, Harvard Business Press was a Library Journal Best Business Book of 2008. Prior to forming Navesink, in 1996, Tom started and led the Data Quality Lab at Bell Labs. He holds two patents.  

*Are You Ready for a Chief Data Officer was originally published at