What makes a strong Chief Data Officer and why is this role essential for companies?

In an increasingly digitized world, the efficient use of data is becoming one of the most important success factors for companies. This is where the Chief Data Officer (CDO) comes into play, a key position that is instrumental in unlocking the value of data and leveraging it strategically, for example to optimize existing or develop new digital business models. In this article, we highlight what makes a strong Chief Data Officer and why this role is indispensable for companies.

Data is the proverbial gold of the 21st century. It offers insights that are literally 'worth their weight in gold', such as customer behavior, competitive advantages and innovation opportunities. And thus create conditions, for example, for a personalized customer approach within a digital customer journey.

A CDO is responsible for capturing, protecting and optimizing the resource 'data'. By using data in a targeted manner, companies can make informed decisions and hold their own in the market.

A Chief Data Officer is correspondingly important for a company, especially in the digitization phase. In particular, he or she creates the basis for digital transformation and enables companies to adapt to constantly changing market requirements. Without a dedicated data strategy, companies risk losing touch.
 

Broadly positioned in the field of data management

In order to survive in such a complex environment, a CDO must or should ideally have a broad professional background in data management. He or she does not have to be an IT superhero. But a background in data science, computer science or business informatics, for example, is an advantage, including a deep understanding of business processes and data analysis.

He or she may well come from the fields of business administration, economics, marketing, IT or product development, for example. The suitability of the candidate depends above all on the practical experience he or she brings with him or her.

A CDO has to compensate for any lack of digital expertise on the part of other executives in the company. His proposals usually mean major changes in the company, and this may not be to everyone's liking. As a digital strategist, he must know how to deal with skeptics and how to involve people and convince them.

Complementary experience in leading data and analytics teams is critical. Projects should have been successfully managed and proven success in increasing data-based efficiency and value creation of companies.

In addition, there is a strong data competence with a deep understanding of the importance and necessity of data quality, including data modeling, analysis and management. Furthermore, strategic thinking, risk awareness and the ability to communicate with different departments are of great importance.

If a company has generally recognized the importance and role of a CDO, then the position is basically open to all business analysts. However, it ultimately depends on the specific job description and the requirements that a company sets.

The CDO as Change Manager - Wooden Path or Winning Road?

In general, CDOs should actively take on the role of change managers. In effect, this means that they not only develop and implement the necessary data strategies, but also ensure that employees understand and accept the change that is intended and taking place. In particular, this requires effective communication, training, and the creation of a data-driven culture throughout the organization.

On the cultural side, employee concerns and resistance must be taken seriously. The necessary support is needed when adapting to new data-driven processes. The CDO, so to speak, as an integrative personality capable of building bridges to create connections.

For this, the CDO needs above all assertiveness, patience, curiosity and a strong analytical mind. Communication skills, flexibility and the ability to collaborate also have a positive effect.

In general, the role of the change manager is one of the most important tasks of the CDO. Digitization always means a change in business processes, i.e., a change in workflows. On the technical side, this means, among other things, that the ERP software used in the company must adapt to the digitization strategy. But this is often a killer point!

But external, organizational conditions must also be created.

Open corporate culture

For the CDO to be successful, he or she needs budget, technology and talent. The corporate culture into which a CDO enters should already be data-oriented. Management should be aware of and accept the value of data and data applications. In this way, the CDO becomes a decisive player in the digital transformation.

If a CDO is thrown into an environment in which, in the negative case, no preconditions whatsoever have been created, it becomes difficult. The start is practically from scratch, and it is a long way to the actual core 'data', which takes a lot of energy. By the time the actual topic is reached, the CDO is often worn out or so much time has passed that, for example, the competition has an unassailable lead, which can almost threaten the existence of the company.

CDO versus Digital Advisory Board

The choice between a Digital Advisory Board and a CDO depends on the individual needs and goals of the company. A Digital Advisory Board can provide valuable external perspectives and cover a broad range of expertise. A CDO, on the other hand, is internal and directly responsible for implementing the data strategy.

Ideally, both approaches can be combined. A CDO can work closely with the board to leverage the external view and develop and implement an effective data strategy. In return, the board can permanently incorporate the internal view and thus permanently optimize its own recommendations.

However, an advisory board is an organizational form that tends to promote "shoulda, woulda, woulda." Thus, there is a risk that companies lose their commitment.

Conclusion and classification in the company-wide context

Digital transformation means an organizational and cultural change in the company. The four main domains that make up a digital company must be addressed: Business model innovation, digital communication with the market, customers and business partners, digitization of products and services as well as their processes, and finally the transformation of the IT architecture to support these requirements.

The prerequisite for a successful digital transformation is digitized information management. This should also be the starting point of a digital transformation, because the goal of digitization is to become a data-driven company. Therefore, a CDO must be established as the driver of digital transformation in the C-row. He starts with this digitalization of information management. He is the real game changer of the company, and he has done his Oscar-worthy job brilliantly if he can abolish his role in the digitalized company. He will then be appointed as the new CEO in many cases.