Welcome back! After a short introduction (part I here) and then looking at some cultural aspects that business should have to successfully transform into a data-driven organization (part II here), let us now take a look at the role of leadership. What kind of responsibilities lie with a data-driven leader? Who’s the person with the stick when it comes to data-driven challenges? IT? Finance? Let’s dive in…
Where we come from…
In the past – and, to be honest, the present – many data-driven projects are spawned from a functional area within an organization. Mostly sales or finance. Then IT gets involved, they are tasked to pick a tool for the job and help facilitate the production of reports, implementation of business intelligence, creation of database queries, and so on. When the project is successful (let us ignore the export to Excel problem from part I for now), the utility of the solution might cause the proliferation of data-driven decision making in the company.
So who „owns“ this data-based decision-making stack now? Often the first point of contact is perceived as the owner of the solution – power users in the first mover business unit usually. Deployment and maintenance are parked with IT. But who is responsible? If we want to transform our organization, we need leadership and a person at the helm to navigate the cultural, technological, and organizational waters – which can be quite stormy to start with – with backing from the board.
Leading with Data
The data literacy movement, data-drivenness – is that a word? – and many of these terms are mostly associated with another fashionable phrase: „The Rise of the CDO“ – Chief Data Officer. What that means is that companies should expand their C-Suite beyond their usual deck of cards of CEO, CTO, CIO, CFO, and so forth.
Side note: Sometimes another member of data-driven leaders is brought forward: CAO. The Chief Analytics Officer. One could differentiate between the two: A CDO would be responsible for the resource data and its creation, storage, refinement, and provisioning. A CAO would be responsible for its utilization in connecting people and business to data through use cases using data analytics (e.g. visualization and/or data science). Many companies, however, will not – currently – want to afford the luxury of having both these positions filled. Many see both these responsibilities under their CDO. I will – for simplicity’s sake – go forward using the term CDO in this article. Keep in mind: all these aspects will be valid for a CAO as well.
CDOs are not only technology people. Often the job to digitize and become data-driven is offloaded at IT but as we‘ve learned in the last article it is not only a technological challenge. It‘s a mixture of several skills that will prove to be equally important. So here go my most critical traits a CDO should bring to the table.
Let’s get it out of the way… Technology, obviously, is a fundamental part CDOs need to be familiar with. When we combine solid domain knowledge with a comprehensive understanding of what technology is available, can be made available, and will be available, we can envision tailor-made solutions that heavily catalyze our business efforts to move us closer to our data-driven vision.
It is important to note, that this technological knowledge should be as broad as possible, but as detailed as necessary. What I mean by this is, leaders need to have a broad vision of the possibilities and understand the data value chain reaching from data source to data utilization. There is no heavy focus on storage, pipeline, visualization, cataloging, machine learning, monetization, or whatever else. Holistic view might be the term. When I say „but as detailed as necessary“, I mean that CDOs are part (or the head, if that’s important to you) of a team of analysts, architects, developers, and UX designers. Detailed knowledge of the inner workings of tools should be available in the team but not necessarily in the leader.
Fierce evangelism and a burning passion for creating value from data are necessary to effectively inspire people to jump on board. As we know, some people are a bit harder to convince to try something new. Not being put off by drag and having great amounts of energy and especially empathy are incredibly useful in transforming a business. A proof of concept is not only a show of technological force, but it is also an exercise in winning people to the cause and that is why CDOs should be evangelical about data, technology, and the value they drive by making everyone’s life easier.
Of course, a CDO should be familiar with the business the company is in, they should also have some knowledge of the market and competition. The reason being, that the ultimate goal of a CDO is to create business (and in many cases human) value from data. In addition to the sleep-well business (see part I) we’re also in the, well, business business. This can be achieved in multiple ways. In the case of e.g. financial value, I normally differentiate direct and indirect monetization of data. Direct meaning creating products based on the data a company generates – e.g. selling their data to supplement the efforts of other data-driven ventures. Indirect monetization would mean using data to drive process efficiency, increase productivity, reduce cost, and all the other neat results business intelligence consultants – like me – keep promising.
Another aspect where domain knowledge is critical is the design and execution of a matching data strategy. There is no one size fits all approach to developing a data strategy – obviously. It needs to be nested and oriented towards the company’s vision and goals. A solid understanding of what’s what is therefore critical.
Finally, data-driven leadership should understand the value, necessity, and how to drive change processes in companies. When I set out with these articles I wanted to look with you at how we can add the people dimension to transforming our business to become data-driven. Facilitating change is the way that we engage people that are inspired by evangelism to overcome the inertia brought about by everyday business. The topic of change management (or leadership) is very complex but it is the key to how you bring about the – well – change that we want. That is why I will devote the entire next part of this series to the topic of change in a data-driven context and what is necessary to get going…
So, CDO, eh?
We have come to the end of part III. We looked at some traits a CDO (or CAO or CDAO…) should bring to the table. This is a tough list and it will be hard to find a candidate that brings all these qualifications with them. Initially, I think it would suffice if some of these aspects were mature on a basic level and then developed on the job. As long as the will to advance these traits and the understanding of why they are important are given.
Leadership is about enabling people and businesses to realize their potential. Data leadership is the same thing.
So what is your experience? Does your company have a CDO/CAO or are all things data still parked with IT or other business areas? Is that a problem? Did I miss something? And as always, I’m happy for any feedback.
Stay safe everyone, part IV on change will follow soon…