Unlocking the Value of a Chief Data Officer
The Big Data era has understandably spawned a great deal of hype within and beyond the technology community. Technologists and C-suite executives alike share a growing interest in the concept of a Chief Data Officer (CDO) to help organizations take full advantage of the benefits of Big Data. As I approach my third anniversary as Schwab’s Global Data Officer (GDO), our equivalent role, I have seen tangible value in a formalized position to spearhead data initiatives and serve as the lead evangelist for data, since the opportunities extend well beyond what any one group can achieve alone.
The CDO community is new, largely still defining the role and trying to ensure we are not the first and last CDO for our enterprise. I have had the benefit of many interactions with this highly collaborative community at conferences and through peer exchanges. Though objectives may vary on the margin, most are seeking similar outcomes: to drive increased value and competitive advantage through data. Also, most are pursuing a relatively similar set of initiatives. If the CDO is in financial services, data governance is a must since our regulators are well focused on data management (a result of the financial crisis). Expanding data volumes and variety also drive a focus on Big Data technology, and almost every CDO I have encountered is building or expanding a centralized Hadoop-based ingestion layer. This offers the promise of enabling access to broader data sets at lower cost. Finally, master data management is a common thread whether party/client or product focused. At the recent Gartner Data and Analytics Summit, I was expecting to see a few dozen attendees at a discussion on how to create a business case for an MDM project; several hundred showed up.
The most successful CDOs will be the ones who can distinguish themselves based on the organizational followership they develop
When I became Schwab’s first CDO in mid-2014, most organizations seemed to be asking “do I need a CDO?” Now, with estimates suggesting most Fortune 500 firms have some form of CDO, the question has become “why wouldn't you have a CDO?” Yet many questions remain. Where should the CDO report? What functions should be integrated into the role? Should analytics be combined with the CDO function? What technology disciplines, if any, belong with the CDO? What background will best drive CDO success?
Unlike the common strategic initiatives, the answers to these questions should be unique to each organization. I report to our CMO which puts me in the “two percent club” according to Forrester research, but this works very effectively at Schwab. We recognize that Marketing is quickly evolving, and data and analytics will fuel business growth. I have a peer that leads centralized analytics and another that leads technology operations and development. While some CDOs tend to view “data only” CDO roles as limited, this model can be highly effective, depending on an organization’s data maturity and/or data objectives. It is here. In terms of the optimal background, I have a bias given my more than 20 years at Schwab, covering a range of roles. I believe being well grounded in the business with long developed relationships provides a significant advantage.
The most successful CDOs will be the ones who can distinguish themselves based on the organizational followership they develop. It goes beyond buzzwords of having a “data driven culture” and “treating data as a corporate asset.” Success with Big Data needs rests in part on the CDO going beyond their own organization and evangelizing the opportunities possible with well-managed data. The CDO should help the organization look past reporting and rear-view mirror use cases to see data as predictive, an enabler of new capabilities and value. To create this value, data needs to be curated to maximize its value, similar to a firm’s people resources and brand. Successful CDOs need to carry this flag, motivating the broad organization to view data as a key enabler.
At Schwab, we embrace this challenge but now we still have to climb the mountain. I’m fortunate to be in an organization where leadership, starting with our CEO, understands the power of data. Our strategy of “seeing through client’s eyes” has driven us to evolve into a modern wealth management firm that seeks to offer a more human and intelligent approach to investing— always at low cost. As we have evolved, we have consistently used technology and data to help us stay on top of serving our clients. But even we are still not fully optimizing our unique first party data to serve our clients, which is our focus.
With so many ongoing advancements in Big Data, perhaps there is no final destination on this journey. Instead, success is better measured by our ability to create a community of data-savvy citizens who are continually identifying, evaluating and pursuing data-driven opportunities to advance the value we provide to our clients.
To take advantage of this opportunity, my team balances doing the necessary activities (the “core curriculum”) with “electives.” One makes data more accessible, accelerating speed to insight and ensuring a robust, well governed data environment. The other includes championing data-driven POCs, new technologies and new approaches to long standing opportunities. Collectively, these efforts better position the organization to engage, trust and innovate with data. As GDO/CDO, I serve as a key enabler, thought partner and evangelist to the team.
For me, there is no question that a CDO brings tremendous value to organizations and will be part of how businesses will shape their future. The next five years will be critical for the CDO role. To take advantage of the role’s potential, CDOs will need to embrace and succeed as evangelists. This will require the right individual as well as right organization (i.e., leadership, culture, financial commitment). Some may fail. Yet in a world where the volume of data continues to explode across industries, creating new business opportunities supported by a rapidly evolving technology landscape, the CDO role is here to stay.