This is an excerpt of the article below, with the title above, with a focused scope on this topic. This is preceded by an Executive Summary by the author of this blog.
Why Chief Data Officers Must Assume Leadership for Data Success
MIT Sloan Management Review
Randy Bean
November 30, 2020
Executive Summary
by Joaquim Cardoso MSc.
Chief Strategy Officer (CSO)
The Digital Health Institute
@ The Data Driven Health Care Unit
March 16, 2022
Introduction
- In their efforts to become data-driven, Fortune 1000 companies face the common challenge of identifying the right leadership that will enable them to overcome cultural and business roadblocks.
- For most businesses, cultural issues manifest themselves in a variety of ways …
- As companies struggle to manage data as a vital business asset, they must develop the leadership skills, expertise, and organizational structure to effectively manage and communicate the business value of data.
- Now more than ever, it is incumbent upon them to establish strong data leadership that will define and deliver on a data vision that supports the greater business vision of the company.
The Emergence of the Chief Data Officer (CDO)
In the wake of the 2008–09 financial crisis, leading financial services companies were compelled by government regulators to address systemic issues resulting from failures in the management and reporting of financial data that were seen as a contributing factor to the financial collapse.
- In response, several large banks took the lead in creating the role of chief data officer (CDO) to focus on implementing standards and safeguards for managing data.
The rise of the CDO as a corporate risk function happened in step with the emergence of big data in the early 2010s.
- Although a few intrepid organizations had designated executives to function as CDOs earlier, a new combination of defensive drivers (compliance, risk mitigation) and offensive drivers (revenue generation, business growth), based on the promise of big data, resulted in a sudden and dramatic increase in chief data officer appointments.
The percentage of major companies with a CDO rose
- from 12% in 2012 to a peak of
- 67.9% by 2019, according to an annual executive survey by NewVantage Partners.
The role of the CDO Today!
Today, the chief data officer role has emerged as a standard for most Fortune 1000 companies, but it comes with serious issues and challenges as companies struggle with how best to shape the role to achieve successful business outcomes.
- While a majority of CDOs — 54.6% — are now focused on revenue initiatives (offensive),
- a significant minority — 45.4% — remain focused on risk factors (defensive).
- Only 12.3% of CDOs have assumed direct revenue responsibility thus far, suggesting that moving into an offensive business-generation role will take some time.
Alarmingly, less than 30% of executives report that the CDO role is successful and well established within their organizations.
- It should therefore not be a surprise that the CDO role has one of the highest turnover rates in the C-suite, especially when compared with more established positions like the CFO or CIO.
- Several major banks are on their fourth or fifth incumbent in the CDO role, and others have paused to rethink the role, highlighting the challenge that CDOs face.
ORIGINAL PUBLICATION (full version)
Why Chief Data Officers Must Assume Leadership for Data Success
MIT Sloan Management Review
Randy Bean
November 30, 2020
This is an excerpt of the article below, with the title above, with a focused scope on this topic. This is preceded by an Executive Summary by the author of this blog.
Table of Contents (TOC)
- Introduction
- The Emergence of the Chief Data Officer
In their efforts to become data-driven, Fortune 1000 companies face the common challenge of identifying the right leadership that will enable them to overcome cultural and business roadblocks.
For most businesses, cultural issues manifest themselves in a variety of ways — resistance to change, antiquated business processes, a lack of clear coordination and communication of business imperatives and business value, ineffective organizational alignment, and uncertain leadership and commitment to data initiatives.
In their efforts to become data-driven, Fortune 1000 companies face the common challenge of identifying the right leadership that will enable them to overcome cultural and business roadblocks.
For most businesses, cultural issues manifest themselves in a variety of ways …
These issues all point to serious gaps between ambition and execution that most organizations confront when embarking on data transformation efforts.
As companies struggle to manage data as a vital business asset, they must develop the leadership skills, expertise, and organizational structure to effectively manage and communicate the business value of data.
Now more than ever, it is incumbent upon them to establish strong data leadership that will define and deliver on a data vision that supports the greater business vision of the company.
As companies struggle to manage data as a vital business asset, they must develop the leadership skills, expertise, and organizational structure to effectively manage and communicate the business value of data.
Now more than ever, it is incumbent upon them to establish strong data leadership …
The Emergence of the Chief Data Officer
In the wake of the 2008–09 financial crisis, leading financial services companies were compelled by government regulators to address systemic issues resulting from failures in the management and reporting of financial data that were seen as a contributing factor to the financial collapse.
In response, several large banks took the lead in creating the role of chief data officer (CDO) to focus on implementing standards and safeguards for managing data.
The driving motivation was to mitigate risk and avoid future systemic financial failures.
The rise of the CDO as a corporate risk function happened in step with the emergence of big data in the early 2010s.
Although a few intrepid organizations had designated executives to function as CDOs earlier, a new combination of defensive drivers (compliance, risk mitigation) and offensive drivers (revenue generation, business growth), based on the promise of big data, resulted in a sudden and dramatic increase in chief data officer appointments.
The percentage of major companies with a CDO rose
- from 12% in 2012 to a peak of
- 67.9% by 2019, according to an annual executive survey by NewVantage Partners.
The rise of the CDO as a corporate risk function happened in step with the emergence of big data in the early 2010s.
The percentage of major companies with a CDO rose from 12% in 2012 to a peak of 67.9% by 2019
The CDO Today!
Today, the chief data officer role has emerged as a standard for most Fortune 1000 companies, but it comes with serious issues and challenges as companies struggle with how best to shape the role to achieve successful business outcomes.
- While a majority of CDOs — 54.6% — are now focused on revenue initiatives (offensive),
- a significant minority — 45.4% — remain focused on risk factors (defensive).
- Only 12.3% of CDOs have assumed direct revenue responsibility thus far, suggesting that moving into an offensive business-generation role will take some time.
Today, the chief data officer role has emerged as a standard for most Fortune 1000 companies, but it comes with serious issues and challenges …
a majority of CDOs — 54.6% — are now focused on revenue initiatives (offensive),
a significant minority — 45.4% — remain focused on risk factors (defensive).
Only 12.3% of CDOs have assumed direct revenue responsibility thus far,
Alarmingly, less than 30% of executives report that the CDO role is successful and well established within their organizations.
It should therefore not be a surprise that the CDO role has one of the highest turnover rates in the C-suite, especially when compared with more established positions like the CFO or CIO.
Alarmingly, less than 30% of executives report that the CDO role is successful and well established within their organizations.
Several major banks are on their fourth or fifth incumbent in the CDO role, and others have paused to rethink the role, highlighting the challenge that CDOs face.
Several major banks are on their fourth or fifth incumbent in the CDO role, and others have paused to rethink the role, highlighting the challenge that CDOs face.
The Need for Business-Driven Data Leadership
See the original publication
The Data-Driven Business Imperative
See the original publication
About the Author
Randy Bean is an industry thought leader, author, and CEO of NewVantage Partners, a strategic advisory and management consulting firm that he founded in 2001. He is a contributor to MIT Sloan Management Review, Forbes, Harvard Business Review, and The Wall Street Journal.
Originally published at https://sloanreview-mit-edu.cdn.ampproject.org.
Names mentioned
MIT Chief Data Officer and Information Quality (CDOIQ) Program, led by Richard Wang
Mastercard CDO JoAnn Stonier
American Express CDO Danielle Crop
Bank of China CDO Richard Goldberg
Former Bristol-Meyers Squibb CDO Krishna Cheriath
Bob Darin, CDO of CVS Health
