A CDO’s Field Guide to Finding Value in Data

An African proverb says, “A good chief is like a forest: Everyone can go there and get something.” And, a Chief Data Officer is no exception. According to Forrester Research published in January 2021, data leaders today face a broad mandate as the role has expanded over the years.¹

In the early years, CDOs mostly reported to technology leaders. However,  Forrester Research indicates that in 2020, 42% of CDOs reported to their company’s CEO, revealing that the role had become more strategic and critical to the success of the company. To facilitate delivering analytics and insights for business innovation and value, CDOs are now tasked with overseeing the entire data value chain,² from data capture or acquisition (including security and governance) to enabling data discovery and access.

And, the word got out. As successes were shared across organizations, requests for insights proliferated. Marketing teams wanted insights on customers so they could tailor messages and offers. Sales teams wanted insights into prospects so they could better prioritize. Ops teams wanted to identify bottlenecks and streamline processes, and so on. The CDO had become the proverbial forest, with insights for everyone. 

This new role means that CDOs need to collaborate extensively across their organizations. Remember, the “D” in “CDO” doesn’t only represent data; it represents “diplomacy” as well. Effective diplomacy requires an eye to the future, not just the current state but where you want to be given what you expect to happen. According to Forrester Research, execution of that strategy requires inclusion, creating communities of ‘“friendlies,”³ and also winning over the sceptics. One of the first tenets of diplomacy, according to Harvard Business Review,⁴ is a focus not only on today’s allies but also on potential opponents. Of course, this isn’t about enemies, but it does require winning over those wary of change and potential disruption.

The best way to succeed with diplomacy is to demonstrate the benefits of change and cultivate a shared vision. It’s about demonstrating the value of data and its impact on the business. Here are some tips for doing that:

• Define a data strategy. A data strategy is not standalone; according to Forrester Research, it exists to support business goals.⁵ The Head of Data at Finnair illustrates this concept when she describes the objective of its data strategy, “By 2025 data savviness will make us the most efficient, reliable travel company.”⁶ Business goals drive how data will be used and where efforts will be focused. The data strategy then establishes requirements across the data value chain. And it must also address the resources needed to execute: the people, the processes, and the technology. And of course, the strategy must address the data itself. 

• Develop a data culture. Execution of the data strategy, and the realization of business value from data, requires investment in the people and processes that make it happen. A data culture is not only about using data to inform business decisions. It’s also about increasing data literacy across the organization. Everyone plays a role either in capturing, protecting, or using data. Forrester Research uses the example of a cashier ringing up a sale,⁷ which must be done accurately for each item. Similarly, a field technician must accurately close out a work order with details of the repair, and a salesperson completing a mobile phone contract must capture customer information. These employees must recognize data, understand how it will be used, and know the value it delivers to the organization. Awareness improves data quality and governance and builds trust in data-driven decisions.  

• Deliver data value. Some organizations have always focused on business metrics for their data and analytics teams. Others assess performance on data quality or availability. The alignment of data strategy with business goals, however, means that performance must also reflect business value. According to Forrester Research, the CDO of a North African bank estimated that the business value equals a contribution to the bank of around 15% of free cash flow⁸—and that’s without the need for incremental capital investment. Similarly, a large Polish retailer achieved an increase in EBITDA of 10% as a result of price optimization.⁹ Strategic CDOs deliver business value across the organization—increasing NPS, accelerating time to market, reducing costs, improving marketing conversion rates, and more. Demonstrated business value wins over the sceptics and ensures a sustainable data and analytics practice. 

The data and analytics team offers a little something to everyone in the organization. But maybe CDO is not the forest itself but more of a forest ranger, protecting the forest, teaching others to respect it, and ensuring its proper use.

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1 bit.ly/3xm7DW9
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4 s.hbr.org/3hiXbsQ
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