Appointment of the CDO: The skills and experience most critical in a Chief Data Officer
Alex McCallum, Strategic Change Director and CDO, explains which skills are most important in the selection of the Chief Data Officer
The recent Collibra CDO Summer School stated that the CDO most frequently came from either a technical background as a result of the focus on data integration and insight platform choice, or a financial background with their expertise in regulation to meet the demands of GDPR.
However, the commercial benefits that data-driven decision making can offer businesses are invaluable, making the organisation transformation and forward planning characteristics of a CDO more important than a specific career background.
For a business to view a CDO as effective in contributing to its financial performance, the CDO must ensure that their organisation extracts all the benefits out of the investment it has made in data insights. They must also gather, shape and generate demand for investments in internal insight creation by building relationships with the CEO and Functional Directors and Transformation leaders.
People skills are therefore critical to the role.
There is no point in an organisation investing in creating insight from its data if it doesn’t derive the most value from it. The most successful CDOs therefore prevent disillusionment in insight investment by minimising this cost and ensure that functional leaders are accountable for taking action and generating benefits from the insights delivered to them.
How does the CDO achieve this? For each new set of data joined together an organisation needs to maximise the insights it gathers and take actions based on this data; this requires the wider business to be aware of the forthcoming insights perhaps via an easy-to-navigate insight area of the intranet/insight-newsfeed and to have access to a business friendly visualisation tool.
A highly usable and well-implemented insight creation and visualisation tool will enable self-serve discovery by the business. So too will a distributed insight operating model. This is where skilled analytics staff with knowledge of the datasets need to work within the business functions to educate the function members about what insights are available and what they could be using. This enables an organisation to reap the benefits of ‘the wisdom of crowds’ through business/insight engagement at lower and mid-levels. In a number of assignments I have hired bright technical and numerical analysts to help coach and shape the organisation’s demand for and interpretation of insight and its exploitation of it. The relationship between the CDO and Cross-Functional Directors is just as key to ensuring that the departmental strategic plans incorporate the outcomes of decisions made on the new insights and have invested in insight exploitative tools/functionality amendments to take advantage of it.
With this in mind, the CDO should create a skills and knowledge pyramid. Crucial for minimising investment in insight staff, it maximises existing employee’s opportunities for personal growth, reducing turnover in the Insight organisation. Roles can always be passed down or across to colleagues as skills are learned and this minimises outlay on too many overly skilled resources at once. However, setting-up the distributed competency centre with a clear curriculum requires long term investment and thought. For example you could hire a statistician part-time to be at the pinnacle of your pyramid and hire a skilled researcher to incubate the research skills lower down the team.
Being a ‘joiner-of-dots’ is a critical feature of the modern CDO. This means determining which improvements in insight capability are most important and being an arbiter between the different Functional Directors as well as those running the CEO’s Transformation agenda. Forward knowledge of these requirements is also important in order to plan the acquisition and integration of data and make insights available to shape the functional strategy or scope the transformational initiatives at least cost.
Too often a transformation initiative is reactive. This could be because an Insight leader is not in place at the top of the organisation to understand future initiatives or they are not senior enough to push for the budget to invest in necessary insight creation. It is often the case that senior leaders underestimate the human capital investment required in insight creation as well as the value that can be gained in how it can inform strategy.
As a result, a programme may be poorly scoped or there is a knee-jerk reaction to the absence of knowledge and the organisation invests in short-term outside help to obtain the data and provide the insights at a vastly higher figure, which is often hidden in the transformation budget. To understand the patterns, trends and outliers this information needs the context of the organisation it is gathered from, making investment in internal resources a much better spend than an external consultancy firm. Such insight, when kept internal, can become a potential source of competitive advantage.
To avoid this eventuality, the CDO needs to be in a position to anticipate the needs of the organisation and agree or find the necessary investment to prepare the insights in advance.
There are ultimately two facets of the CDO role. These are not only essential but the most important and require forward-thinking, commercially minded leaders who have seen or at least understand the cost and value of insight. Strategic Change Managers and Cross-functional analytics leaders are therefore perfect candidates for the role of CDO.
Strategic change managers are used to leading analysis across a business. They are often involved in taking the output of the strategy team or strategy consultants and working out how to implement it. Knowing the difficulty of efficient implementation and tracking of outcomes a change manager will be motivated to have the insight in place to create an accurate baseline picture and ensure that there is no double counting of benefits.
Cross-functional analytics leaders can draw upon their experience of comparing the benefits of data driven initiatives across different functions. They can explain to the CEO why investment is needed in advance to fund exploration and determine what an organisation doesn't know that it doesn’t know.
They can also determine what insight can be exploited or provide the initial scoping intelligence to support a transformation initiation phase.
A technically minded CDO will ensure that data flows from all source applications, is cleaned, has optimised metadata management, and will select the best data integration tool. Likewise, a finance CDO will ensure that all of the management information matches the finance figures and the governance is rigorous. However, to gain true business-changing insights, the most important capabilities of a CDO are an understanding of how to optimise the wisdom of crowds so that an organisation succeeds in reaping the benefits from its data investments and to motivate employees to achieve this. Importantly, the CDO should also be able to pull together the challenges within the firm's strategy and the drivers of its transformation and then prioritise insight demand and persuade the CEO to invest in exploratory insight efforts. To reiterate the point; it’s about people skills.
A CDO with a background in Strategic Change Management and experience in Cross-functional analytics will be better able to ensure that an organisation invests a sufficient but not extortionate amount of money in its insight. This will enable the business to reap the benefits of these insights which become the competitive advantage of the organisation and will end the perceived or actual disappointment in insight creation investments to date.