This post is the third in a three-part series on how CDOs are transforming organizations through data.
Imagine for second that you’ve been tasked with planning your firm’s R&D spending for the next five years. This decision involves billions of dollars and potentially transformative effects for the future of your business. How do you decide how to spend the money?
Intuition? Gut feeling? Do what the last person did and hope it works?
Fortunately, there’s a more useful question to ask in this case – what does the data tell us?
In today’s information-driven world, big decisions require big data. Using data to support and advance decision making enables business leaders to overcome decision paralysis, and CDOs are at the forefront of driving this change.
“I was brought in really to change the way that the business works, moving us from an intuition-based organization to hear what the data is telling us,” explains one insurance CDO in our recent study, Your Chief Data Officer – Re-imagining the business of data.
There are three methods that the CDOs we spoke with utilize when it comes to shifting their organization’s culture to be more analytically driven:
- Establish trust in data and platforms to build reliance
- Align the CDO’s efforts to the organization’s top priorities
- Scale analytics and speed delivery by enabling end users of data
Establish trust and reliance
“If you can build trust with the business folks, then you can turn the tables upside down on the whole concept of conventional wisdom.” – Insurance CIO
People still depend quite heavily on experience or intuition, not data, to make decisions. “Data-driven decision making is often difficult for executives used to relying on their intuition,” writes David Meer about the findings from the World Economic Forum’s 2014 Global Information Technology Report. One IBM Center for Applied Insights study found that 82 percent of Traditional Marketers rely largely on hunches and experience when making marketing decisions.
To become more comfortable leaning on analytics, business leaders first need to be able to trust the data and the analytical platforms they’re using. As one CDO put it, his team has to “provide senior management with credible tools that help shape the future direction of the organization.”
If CDOs can establish that trust in the data and build greater reliance on analytics, they can begin to challenge traditional thinking and engrained assumptions that sometimes lead their organizations down the wrong path. CDOs told us they’re focused on building “empirical data that refutes subjective biases.”
However, increased reliance on analytics often means more projects coming across the desk of the CDO. So how does a CDO decide what to work on and what matters most for the business as a whole?
Align to top priorities
“The number one challenge – once a CDO is on board – is being inundated. They have to be very astute to be able to prioritize.” – Banking COO
The CDOs we spoke with shared that one of their biggest challenges and responsibilities is being able to effectively prioritize which projects and opportunities will have the greatest impact on the business.
One way of doing this is “to have a framework that enables a company to evaluate cost and benefits so that you can have a reasonable discussion comparing this versus that,” explains a telecommunications corporate strategy leader.
It’s also important to “not get caught in the fire drills,” or urgent requests that may spring up but don’t drive as much value as long-term, strategic projects.
Perhaps the most effective way to balance the bandwidth of the CDO and his team with the interests of various business units is to enable leaders to use data and analytics themselves, leaving the CDO to focus on the most strategic, top-priority items.
Scale, speed and enable
“If you want to double your research portfolio, are you really going to hire twice the number of data scientists? We have to figure out how to push this down so it can be used by the end user.” – Government CDO
Changing the way a business uses data means changing how everyone across the organization uses it. To ultimately transform the culture to be more analytically driven, CDOs have to enable the end users of data, making them smart consumers of data and insights, capable of self service.
To enable this cultural shift, CDOs are asking questions like, “How can I empower business users with the ability to interrogate data and shed a light on it?”
Some organizations pigeonhole all of their analytics talent, limiting scale to a small number of data scientists and analyst teams, but that will only take the business so far. To gain speed and scale, forward-thinking CDOs are educating the broader organization and building tools that the rest of the business can use to produce their own insights.
The bottom line
The Chief Data Officer is an emerging role, aimed at helping organizations become data-rich and analytically driven. CDOs work to envision data strategies, activate their organizations to use data, and transform their organizational cultures.
As one banking CDO summarizes, “The whole reason you want a chief data officer, the whole reason you ostensibly care about your data, is because you desire to be more evidence or analysis based in the way you make decisions and respond to market stimulus.”
What would your three focus areas be for becoming or adding a Chief Data Officer to your organization?