Chief Data Officer: Rule maker or rain maker?

In his book Infonomics (a nice conference giveaway at last summer’s MITCDOIQ Symposium, by the way), Gartner VP Doug Laney makes some important claims about how companies should regard their data.

Notably, he states that all companies should be actively seeking to monetize their data, especially the “dark” data that resides in their systems but isn’t used or needed to meet core business objectives. This is the precious dross that everyone is in search of: the data “slag” that serves no purpose for the organizations that produce them, but which can be incredibly useful to others. Laney suggests that a natural home for this monetizing activity is in a company’s Analytics function, which makes sense: why not let the people who already massage data for business use take the lead on finding new ways to use it?

At the same time, Laney confirms — or at least he doesn’t contradict — the view of many senior data practitioners that most companies need someone in the role of Chief Data Officer to make sure the company’s data is protected. This view coincides with the common understanding that the CDO’s main responsibility is to shepherd their company through the culture shift of transforming into a data-centric or “data-driven” organization.

Mind the Gap

Hanging between these two positions is something of a gap. Analytics for monetization demands an aggressive, forward-looking stance. In contrast, the stance typically described for the CDO “data shepherd” is protective, governance-oriented, and compliance-focused. So the question is: what should the relationship between these two positions be?

One view is that the Chief Data Officer should be the rule maker, setting the standards and boundaries for collecting and storing data across the company, and optimizing data-sharing to meet the business needs of the company. This puts the CDO in good company with other members of the C-suite who fulfill this kind of protective, provisioning role — CFOs, CIOs, General Counsel, etc. The monetizing team, in contrast, are the “rain makers“. Their work is not limited to current business processes. Instead, they have permission to comb through all the company’s data looking for new patterns. They are also expected to look beyond the current interests of the company and query the market — much like traders on the stock market floor — for new ways to use otherwise stale data.

Does this model sound familiar? Depending on the size and maturity of your company, it might. There’s an inherent problem with this structure, though. Can you see it? Again, depending again on the size and maturity of your company, I’ll bet you do.

The problem this structure poses is that it effectively pits the rainmakers against the rule‑makers. Their respective responsibilities give them both “jurisdiction” over the same company asset — data — but with radically differing priorities. Over time, no matter how friendly and collaborative individuals try to be, the structural tension between revenue and rules can easily devolve into the old familiar rift between profit center and cost center. And this is serious — because when that happens, the cost center is always at a disadvantage.

The bottom line is this: a Chief Data Officer whose responsibilities are tied only to strategic goals of compliance and efficiency is already compromised.

Yes, and…

Bearing all this in mind, the alternative might seem obvious. To head off a conflict between the goals of compliance/efficiency and the goals of future profit, the CDO’s role simply has to encompass both. It’s an ambitious stance, though, and more challenging than it might look.

One challenge in bringing these goals together lies in the different backgrounds of today’s business data experts, who already cross a range of disciplinary lines including data science, information governance, business analysis, systems development, program implementation, and more. A more serious challenge lies in setting the right corporate expectations about what the CDO should do. This includes not only the functions and capabilities under their control, but also how they relate to the CEO and the Board.

If the Chief Data Officer is to create value for the enterprise, their counterpart in the C-Suite cannot be the CFO, CIO, or General Counsel. Instead, they must be expected to behave like the Head of R&D (in science & technology) or Upstream Exploration (in oil & gas): actively involved in prospecting, testing, and growing new sources of revenue, while also protecting the safety and integrity of the company’s data.

Now What?

So, CDOs (and CDOs-in-waiting), ask yourself this: “How does my company view my role?” If you find that your goals are being consistently construed as protecting your business, then I encourage you to push to expand that view — for the good of your company and your own career. The skills involved in finding and creating value in data will persist long into the future, even as the technology continues to evolve.