Does Your Business Really Need a Chief Data Officer (CDO)?
A lot of companies think that in order to take advantage of big data, they should hire a chief data officer or CDO. Think of it as a CEO’s equivalent for your big data operations. The CDO would ensure that the organization gets the right kinds of data for their needs coming from the right sources. The CDO will help other business leaders make the right decision using the data that they gather.
However, while most organizations have the job description down pat, a CDO might not always be a good idea.
Over the years, it seems that every organization worth its salt has a CEO at the helm. And it seems that this is also the trend for CDOs. Gartner reported that 1 in every 4 organizations will have a chief data officer by 2017. The CDO’s role will be more important in insurance, banking and other highly regulated industries, as Gartner predicted that 50 percent of these enterprises will have hired a CDO by the same time period.Click here to read more about this article
Having a CDO: Is it really important? And is it what you really need?
Gartner clarified that the CDO position is very different from the CIO. The two have different skills sets, too. A CDO needs to have a thorough understanding of how the industry works, while also thinking of data as a company asset and having the expertise in data modeling, risk management and maybe even a legal background. The CDO is responsible for reigning in poor data quality, which causes businesses to lose millions a year, as well as for ironing out problems in data governance.
There is no question in the importance of big data to today’s business world. You simply cannot ignore big data and not come up with a big data strategy when your closest competitors are hitting the ground running with it. But, a CDO might not be as vital as a big data strategy. The problem lies in the misconception that big data is purely an IT person’s domain. A lot of companies see big data and think that they need a chief data officer in order to gather the data.
The thing is, big data is not a purely technical matter. Thinking otherwise might be detrimental to your big data initiatives.
What you need is to have somebody who can strike a balance between IT and the business side of your organization. A CDO might be too focused on having the right tools and technologies, as well as the infrastructure to gather the data you need. That is not necessarily a bad thing, but it might be disastrous if the CDO stops at that process. Do not forget that the data is used for real-life business decisions as well. In short, the CDO also has to make sure that the data infrastructure he or she builds would also be relevant to the business decisions that it would ultimately be used for.
Right now, enterprises think that what’s important is for the CDO to have all the right tools and technology to gather the data and have some means to analyze it. In reality, what works is having a data strategy that would focus on solving real business problems along with a list of events and actions to be taken.
In short, focusing too much on the CDO’s traditional job description, organizations might find themselves losing sight of the more important aspect of big data: solving problems right and fast.
The Chief Growth Officer (CGO)
So what do you do? Look for a growth-oriented person rather than a purely technical one for the job. Datameer CEO Stefan Groschupf, writing for the Entrepreneur, called this person as the “chief growth officer.”
The chief growth officer would be able to find creative uses for the data in order to grow different aspects of the business. Groschupf also advised that companies should adopt a design thinking approach to their big data initiative. Instead of starting with the software, servers, and technology related to big data, the chief growth officer would first look at the reasons why the organization would need data to help solve a problem, and then when that’s out of the way, start on building out the technology. So business side first before the technology.
Put simply, the chief growth officer defines the problem first and then looks for the technology to find a solution. In contrast, the technology-first approach of the chief data officer makes it seem like a solution that is looking for a problem. As such, the CDO just shoves the “solution” into whatever problem that comes along, even if it is not the right fit. The result? Your big data initiatives will become burdensome for your shareholders to use and ultimately might even give them the wrong information, leading to big mistakes in decision making.
What’s more, the chief growth officer would be able to stem off the deluge of data. A CDO might be too focused on technology and goes for the latest and biggest tools out there. For instance, we see companies that adopt Kafka or Apache Spark so that they could have real-time data coming in with the processing power needed to crunch them. But what happens are that the users are only using all of these data for a small number of use cases and all that data and processing power is laid to waste.
The design approach reverses this process. You come up first with the use cases – those questions that you want to ask the data – and then look for a more specific tool to help you wade through the data and give you the answers.
The CGO vs. the CDO
By now the difference between the traditional CDO and the CGO should be obvious. A CDO takes a technology first approach that, as we have explained, could be wasteful and irrelevant to the business decisions that needs to be made using the data. Meanwhile, the CGO focuses on the business problem and how to best solve it using the data.
What’s more, companies who look for a chief growth officer are able to harness creativity and flexibility in problem solving, something that a CDO cannot offer.
If you are thinking of getting into big data now, it might help if you hire a chief growth officer rather than a chief data officer.
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Photo courtesy of Ben Pollard.