What is a chief data officer? A leader who creates business value from data

Capital One appointed the first chief data officer (CDO) in 2002. Only a few organizations followed suit in the decade that followed, but NewVantage Partners’ Big Data Executive Survey 2020 found that 57 percent of senior Fortune 1000 business and technology decision-makers said their organization had appointed a chief data officer.

The chief data officer oversees a range of data-related functions that may include data management, ensuring data quality and creating data strategy. He or she may also be responsible for data analytics and business intelligence, the process of drawing valuable insights from data. Or some data management functions may fall to IT, and analytics may belong to a chief analytics officer, a title that some say is interchangeable with chief data officer.

The chief data officer role

The chief data officer is a senior executive responsible for the utilization and governance of data across the organization. While the chief data officer title is often shortened to CDO, the role should not be confused with that of the chief digital officer, which is also frequently referred to as CDO.

“The chief data officer is the senior person, with a business focus, who understands the strategy and direction of the business, but their focus is on how to underpin that with data,” says Caroline Carruthers, director at consulting firm Carruthers and Jackson, former chief data officer of Network Rail, and co-author of The Chief Data Officer’s Playbook and Data-Driven Business Transformation: How to Disrupt, Innovate and Stay Ahead of the Competition.

Although some CIOs and CTOs see creation of a chief data officer as encroachment on their turf, Carruthers says the boundaries are distinct. Chief data officers are responsible for areas such as data quality, data governance, master data management, information strategy, data science, and business analytics.

“The difference between the CDO and CIO in my mind is quite clear, and I often use the analogy of the bucket and the water,” Carruthers says. “The chief information officer is responsible for the bucket. They’re responsible for making sure that the bucket is the right size, that there are no holes in it, that it’s safe, and that it’s in the right place. The chief data officer is responsible for the fluid that goes in the bucket, comes out of the bucket, that it goes to the right place, that it’s the right quality and the right fluid to start with. Neither the bucket nor the water work without each other.”

Still, for now, the role of the chief data officer remains somewhat unsettled and evolving. NewVantage Partners says 72 percent of its executive survey respondents feel the chief data officer’s role remains unsettled while 28 percent describe it as a successful and established role.

Chief data officer responsibilities

While the chief data officer role was initially focused on compliance and data governance, IDC’s State of the CDO Survey, conducted between February and April 2020, found many chief data officers are now also responsible for using data to drive business outcomes. IDC found that 80 percent of the top KPIs used to measure chief data officer performance are business-oriented.

According to IDC, chief data officer responsibilities include:

• Governance: Advising on, monitoring, and governing enterprise data
• Operations: Enabling data usability, availability, and efficiency
• Innovation: Driving enterprise digital transformation innovation, cost reduction, and revenue generation
• Analytics: Supporting analytics and reporting on products, customers, operations, and markets

Chief data officer vs. chief analytics officer

Even though chief data officer and chief analytics officer are two distinct roles, they should both reside in the same person, argues Guy Gomis, partner at the recruiting company BrainWorks.

“I’m finding the best in class are combining the two,” he says. “Most leaders in analytics want to own the data strategy and how the company treats data and they want to own analytics.” It makes sense if you think about it. Analytics is how data provides value, so that’s an essential function. At the same time, you need a good data strategy and good data management or you won’t get quality data to analyze. Thus, Gomis says, “Best practice is having a chief data strategy and analytics officer who owns both data and analytics and works closely with the CIO.”

NewVantage Partners says in 2020 many firms have adopted this combination of chief data and chief analytics functions into a single chief data and analytics officer (CDAO) role.

To whom should the chief data officer report?

IDC says 59 percent of chief data officers currently report to a business leader. Additionally, 80 percent of the top stakeholders chief data officers support are businesspeople, including the CEO, COO, CFO, and head of digital transformation.

While organizations are rapidly adopting the chief data officer role, NewVantage says there’s still a lot of confusion and disagreement on the mandate and importance of the position. Its survey found that 40 percent of participants identified the chief data officer as the executive with primary responsibility for data strategy and results, though that is a steep decline from 2019 when 48 percent of participants identified said the chief data officer had primary responsibility for data and results. In 2020, 49 percent of respondents said other C-level executives had primary responsibility or claimed there was no single point of accountability. In addition, 51 percent felt the chief data officer should report to the executive committee while 38 percent felt the chief data officer should sit on the executive committee.

Carruthers says the chief data officer could report to a lot different places in the organization, though she favors the CEO or COO.

“The only place that I believe it’s absolutely wrong for it to sit is into the CIO,” she says. “As the role evolves and matures, it’s reporting in to other places in the business. It’s moving toward more of a seat at the top table, which it should be. For me, the CIO and the CDO should very much be working hand-in-hand as a partnership, and a partnership doesn’t work when one partner works for the other partner.”

Anthony Scriffignano, chief data scientist at Dun & Bradstreet, who himself reports to Dun & Bradstreet’s CEO, says there’s no single answer to the question of where a chief data officer should report. “I’ve seen the role in finance, IT, marketing, R&D, it could even be product development,” he says. “Often it’s a new role, perhaps created by a person who was overwhelmed with the demands of their own role, so you’ll often find it in that part of the organization because that’s who created it. But that doesn’t necessarily mean that’s where it should stay.”

What to look for in a chief data officer

According to NewVantage Partners’ survey, 49 percent of executives at Fortune 1000 firms feel that a successful chief data officer must be an external change agent with fresh perspectives. Meanwhile, 16 percent held the opposite view: They felt a successful chief data officer must be a company veteran who understands the culture and history of the organization. Respondents were also split on the chief data officer’s background: 21 percent believed a successful chief data officer should be filled by a line-of-business executive who has been accountable for financial results, while 14 percent said the chief data officer must have a data scientist or technologist background. That’s a reversal from previous years. In 2019, 13 percent of respondents felt the chief data officer position should be filled by a line-of-business executive, while 16 percent felt a data scientist or technologist background was essential.

Gomis says he’s seen chief data officers come from marketing backgrounds, and that some are MBAs who have never worked in data analytics before. “Most of them have failed, but the companies that hired them felt that the influencer skill set was more important than the data analytics skill set,” he says.

Good people skills certainly could be useful for getting out of the bind many new chief data officers find themselves in. “One of the biggest mistakes is not understanding what it will take to succeed, in terms of expectations,” Gomis says. “If you look at a lot of the people who have had the title of chief data officers and chief analytics officer over the last three years, there’s a tremendous amount of turnover.” When you talk to them and their former employers, “It turns out that the expectation of the company and the candidates were not aligned,” he adds.

Often, the problem is unrealistic expectations from an employer. “The biggest mistake companies make is to expect that because they’ve hired someone the problem is solved,” says Justin Cerilli, who heads the data and analytics practice for consultancy Russell Reynolds Associates. “Actually, you’re just starting to solve the problem — the tough decisions are still to come. That’s when you start asking who our people are, what our processes are, and how do we change our culture. CEOs tell chief data officers to change everything to get the end results they want, but don’t want to change the way they do anything.”

Chief data officer salary

According to compensation analysis from PayScale, the median chief data officer salary is $178,606 per year, with total pay, including bonuses and profit share, ranging from $118,000 to $305,000 annually.

Chief data officer jobs

A recent search for chief data officer jobs on Indeed.com and LinkedIn showed positions available in a range of industries, including retail, healthcare, media, insurance, financial services, higher education, manufacturing, and government.

A sampling of chief data officer job descriptions shows key area of responsibilities such as: evangelizing and communicating a data vision a critical part of growth strategy; creating strategic data access policies; leading the design of analytics infrastructure; developing and executing a central data strategy to drive revenue; overseeing data governance, data investment and partnerships; and strategizing with C-level colleagues.

Companies are looking for, for example, highly motivated, experienced innovators who have produced tangible results, as well as senior-level leadership over data and/or analytics departments for seven or more years.

For tips on how to shape your resume, see “CDO resumes: 4 tips for landing a chief data officer role.”

Minda Zetlin is a business technology writer and frequent contributor to CIO and Computerworld, and a columnist for Inc.com.