Data-leadership roles—often carrying the title of chief data officer (CDO) or chief analytics officer (CAO)—have received considerable attention from business executives, industry analysts, and the press over the last several years. However, our data indicate that not all of these roles are sustaining or effective. The tenure of CDOs and CAOs shows no substantial increase over time, while the effectiveness of these roles varies widely, with the data likewise revealing minimal increases across the years.
These data reflect that many organizations still need to figure out which factors most influence the ability to deliver business value from data-leadership positions. Just establishing such roles will not guarantee meaningful results. To derive high levels of strategic value from data leadership, organizations must place the right type of people in those roles, locate these positions optimally in their reporting structures, and ensure the roles have the right focus and competencies.
Effective data leaders need a balanced blend of business and technical orientation, and should be well-connected with and respected by business functional leaders. They also need to allocate their time to high-priority issues and tasks that directly deliver value against strategic outcomes that business leaders consider important. Organizations that align these critical characteristics to their data leadership likely will increase the value these roles can deliver.
Many data-leadership roles still report into the IT function. For some organizations, having a CDO / CAO report into the chief executive officer (CEO) or a business functional leader may have positive impact by elevating the perceived importance of the role and bringing it closer to critical business decisions and outcomes. Regardless of reporting structure, data-leadership roles that spend too much time on communication and theory, rather than practical action (governing, driving consistency and alignment of data initiatives, and so forth), tend to struggle to deliver value.
All data-leadership roles can be optimized to increase value. Organizations should develop strategies to implement improvements in the form and function of their CDO / CAO roles. These plans should focus mainly on ensuring that data-leadership roles:
- Are occupied by individuals with a blend of business and technical (data) skills
- Reside at places in the organization structure that provide the visibility necessary to data-enable critical business processes and decisions
- Actively engage with business functional leaders to help deliver strategic business outcomes
- Spend time actively effecting change (such as improving governance, data accessibility, and literacy), and not just communicating principles