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Harvard Business Review: 8 Strategies for Chief Data Officers to Create — and Demonstrate — Value

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The chief data officer (CDO) role was only established in 2002, but it has grown enormously since then. In one recent survey of large companies, 83% reported having a CDO. This isn’t surprising: Data and approaches to understanding it (analytics and AI) are incredibly important in contemporary organizations. What is eyebrow-raising, however, is that the CDO job is terribly ill-defined. Sixty-two percent of CDOs surveyed in the research we describe below reported that the CDO role is poorly understood, and incumbents of the job have often met with diffuse expectations and short tenures. There is a clear need for CDOs to focus on adding visible value to their organizations.

Part of the problem is that traditional data management approaches are unlikely to provide visible value in themselves. Many nontechnical executives don’t really understand the CDO’s work and struggle to recognize when it’s being done well. CDOs are often asked to focus on preventing data problems (defense-oriented initiatives) and such data management projects as improving data architectures, data governance, and data quality. But data will never be perfect, meaning executives will always be somewhat frustrated with their organization’s data situation. While improvements in data management may be difficult to recognize or measure, major problems such as hacks, breaches, lost or inaccessible data, or poor quality are much easier to recognize than improvements.

So how can CDOs demonstrate that they’re creating value? The primary ways that data adds value to companies is through enabling them to understand and predict business performance and customer behavior, and embedding it into products and services — all offense-oriented initiatives. CDOs, then, must be able to help companies achieve value through better data usage and consumption.

That is a primary focus of a recent research project sponsored by Amazon Web Services that all three authors contributed to. It included a large survey of 250 CDOs who attend the MIT Chief Data Officer/Information Quality Symposium, as well as in-depth interviews with 25 prominent incumbents of the role. Of the CDOs surveyed, 41% said they define success by achieving business objectives — significantly more than those who measured success in terms of change management or culture shift (19%), technical accomplishments (5%), prevention of serious data problems (2%), or an equal combination of these factors (32%).

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