A New Business Landscape
Businesses have transformed over the past year in ways we never could have imagined. The world has faced shifts in global supply chains, healthcare, education, and workplace environments that we did not anticipate in 2019. This is true across almost every industry in every part of the globe. As we slowly come out of lockdowns, many are imagining what the future holds for business, and cataloging the ways that things will be different as we move forward.
While there are lots of conversations online and in the media about establishing new public health guidelines, revising social norms, and mapping new consumer habits, for the business world, major shifts will revolve around supply chain issues, collaboration practices, product development cycles, and hybrid work environments. In fact, hybrid work environments are getting a lot of attention because they touch so many lives. In a recent survey, McKinsey found that nine out of ten executives interviewed from a broad cross-section of industries and geographies, said that they would be combining remote and on-site working.
Successfully navigating all of these challenges requires accessing, understanding, and leveraging data in new and innovative ways, and this puts a new spotlight on the role of Chief Data Officer (CDO). The CDO’s role will be critical to redefining the enterprise in a post-2020 world – in terms of infrastructure, work environment and consumer experience. But the path forward is anything but clear – it’s up to the CDO to write their own new playbook for this post-pandemic world.
The Shifting Role of the Chief Data Officer
Prior to the pandemic, the position of CDO was still a relatively new role. The numbers vary: a recent Deloitte study found that only 25 percent of Fortune 500 companies had a CDO position, whereas another recent study of Fortune 1000 companies by NewVantage Partners, reports that about 65 percent of Fortune 1000 companies have a CDO position. To find out a little bit more about how our own network viewed the CDO position, we did an informal poll on LinkedIn. Of those who responded to our survey, 27% said they have a CDO and 44% said they don’t have one but they need one. 29% responded saying they don’t have a CDO and don’t need one. We interpret those numbers to show that 71% of respondents worked at an organization that valued, or at least realized the need for, a CDO1.
Regardless of those numbers, data has never been more important and the CDO position is coming into its own at a time when the business world needs it more than ever, but it is still being defined. As Beth Stackpole wrote in a recent MIT Management article, “Despite the swelling ranks, the responsibilities, focus, and reporting structure for chief data officers remain in flux, often varying by company.”
Prior to 2020, the CDO was broadly seen as responsible for creating data literacy and ensuring the quality and use of data. In most cases, the CDO’s responsibilities included managing data systems, standards and best practices to fuel marketing, supply chain and productivity initiatives. In the post-pandemic world, those responsibilities are shifting, taking on new dimensions and a new sense of urgency. In addition to traditional responsibilities, CDOs are now being asked to expand their remit to include some of the following areas:
- Empowering a new kind of work force – enabling teams to access the data they need even when they work from new locations or collaborate in new ways.
- Enabling agility and managing volatility – providing the insight to help an organization quickly understand the market and make strategic shifts to ensure survival and profitability.
- Ensuring regulatory compliance - the post-Covid world will require many organizations to monitor new streams of data to ensure compliance with national and local health regulations.
- Security – while this shared responsibility connects Chief Information Officer (CIO), Chief Security Officer (CSO) and CDO roles, the CDO is facing a new world, where data, the lifeblood of the organization, is under constant threat.
Data on this subject is limited, given how fast things are changing in the post-pandemic world. So we conducted another informal survey on LinkedIn. While we had a small sample, the responses were broadly in line with what we see ahead for the industry. 35% said that building culture was most important, followed by developing strategy (32%), driving innovation (19%) and ensuring good ethics (13%)2.
The New CDO Agenda: Three Areas of Focus for the New World
As the CDO steps into this new world, they will also find themselves setting the agenda inside the enterprise in new ways. Yes, they will still be concerned with overseeing Master Data Management (MDM), Data Quality and Data Integration, but they will also be creating a new way of thinking about data that applies to everyone from administration to engineering to marketing.
Author, analyst and industry expert, Doug Laney has been conducting a study of 500 companies since 2018 and his findings to date show that those companies that view data as a corporate asset are three to four times more likely to reap the benefits of data in their strategic decision making.
So how does the CDO create an enterprise environment where data literacy is table stakes, and the organization is focused on data-driven decision making? The answer will depend on each individual enterprise and their CDO. But there are three areas where the CDO may want to focus attention:
- Culture: Not everyone thinks of data as a corporate culture issue, but they should. Much as the Chief Marketing Officer (CMO) will shape the brand of the organization, the CDO will shape the way people feel about data, and as a result, how they leverage it. Shaping a data-centric culture involves:
- Rallying the team – getting everyone on the same page when it comes to data policy, understanding the tools and systems in place, and promoting data literacy.
- Encouraging curiosity – data is only as good as the systems and tools that analyze, store and share that data. The CDO should be encouraging employees to ask about data – to learn more about it and build it into their areas of decision making.
- Data ethics – privacy and security as important now as they have ever been. The CDO sets the tone when it comes to how an enterprise secures its data, how it manages permission, and how it adheres to legal requirements around the globe.
- Strategy: There is still debate on where the CDO sits in the corporate structure. Some companies have the CDO reporting into the CIO in more of a consultative role, while others have the CDO on equal footing with the CIO, reporting into the CEO. In either case, the more independence the CDO has, the better the results will be. An independent CDO has the stature and authority to push data into corporate strategy and drive the direction of the company. During the pandemic, many companies learned that data-driven decisions improved an enterprises’ ‘fast-twitch’ muscles – enabling new policies, products, and customer engagement models that helped many companies weather the lockdown.
- Innovation: The CDO should be at the center of innovation – data provides the enterprise a view into what has worked, how it has worked, and the impact decisions have had on the bottom line. A combined approach – including internal and external data sources - should drive improvements in everything an organization does:
- New product development
- New customer engagement models
- New marketing programs
- New partnerships
- New security enhancements
The New Post-2021 World is What We Make It
The pandemic changed the way that businesses operated in every corner of the globe and across all industries. To rebuild from 2020 and compete in new and completely changed markets, companies must look at new and innovative ways to streamline operations, empower employees, more effectively engage with customers across all channels, and offer new and innovative data-driven products and services. They must do all of this while protecting customer privacy and ensuring new levels of compliance across several regions.
The CDO role is still being defined in many organizations, but this role, more than any other in the C-suite, holds the potential to enable companies to master their transformation into the new world. The CDO will drive the use of data to move quickly and rapidly deploy new data-driven applications that deliver competitive advantage.
1 Sample size of 52
2 Sample size of 32