Why Chief Data Officers Must Assume Leadership for Data Success
Chief data officers need to be equipped with the right tools and support so they can execute on the company’s data vision.
The New Leadership Mindset for Data & Analytics
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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.
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.
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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.
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