As the CDO is still a relatively new role in many organisations, its definition is still evolving as data continues to offer more value, opportunities and efficiency across the business.
Those who would disagree, need only to look at the formation of the NASDAQ-100 at COB 25th June 2023. The top 7 companies on this index make up more than 50% of its value. Their names are Microsoft, Apple, Alphabet, NVIDIA, Amazon, Meta and Tesla: These companies are either built from the core of the data they produce and/or provide infrastructure to get your hands on the insights inherent in that data.
To shed light and share knowledge on this every-increasingly popular role, Antoni Ugoni (Think & Grow Partner and experienced global Chief Data Officer), outlines the essentials founders need to know when it comes to hiring and maximising the impact of a Chief Data & Analytics Officer to drive growth.
The important part data is playing in fast-growth tech companies
To understand the human you need to fit the CDO role, we need to touch on the capabilities and opportunities data (and an individual to lead it) can bring to your business:
From a customer viewpoint, they are changing their own expectations of companies when it comes to customer research.
Customers willingly provide their profile, demographics and behaviour for you to store in your product or platform, and in return expect value and superior service. For example, the youngest millennials are emerging into their late 20s and Gen Z are 13-26 years old. These groups are entirely comfortable with splitting out a continual data exhaust and the brands who are having the greatest impact among them know the value of their data.
It begs the question, why is the Chief Data Officer (or Analytics Officer) often the shortest-tenured of the CXOs?
In the work done by Gartner, “Second Gartner CDO Survey – The State of the Office of the CDO”, the average tenure of a CDO is only 2.4 years. This compares to almost 7 years for the CEO and 4.5 years for the CFO and CIO.
However, as highlighted below, the right CDO is incredibly experienced and knowledgeable that will propel the business’ technical function with responsibilities such as:
All of these (and more), add up to change and internal disruption in fast-growth tech. And we know that humans often struggle with change, particularly when perceived power is shifted away from them. At its worst, this will open up an internal battle where debate and unhelpful noise may ensure in an effort to maintain any status quo.
A CDO can also add value in optional transformation programs that often take months or even years, and due to the short attention spans of start-ups and scale-ups nowadays, these often aren’t worked through or supported, however beneficial they may turn out to be. Another con of a CDO’s typically short tenure.
How founders, CEOs and Boards can accelerate the impact of a CDO in a fast-growth tech business
Liberate your data (dream) team: Have a clear business strategy to know exactly what the company needs to achieve to provide focus and direction. The team will be able to inform elements of the data strategy such as techniques and algorithms and the hygiene required of the data. In the lack of direction and focus, the data team will probably build cool stuff and hope that someone, somewhere will find a way for it to add value. However, to drive business success and growth - direction is essential.
Be open to experimentation: The nature of data-driven products means that they provide their own performance data to learn and improve from. This is a tremendous opportunity to continuously seek out more value and improvements in these systems.
Even the most obvious solutions can go awry. Experimentation will also give you the opportunity to simultaneously understand the following:
In the absence of experimentation mindsight, you will often be unable to answer any of these questions.
Keep a continuing dialogue with the CDO on structure: The data environment is as open to optimisation as any other part of a business. This means that finding the balance of centralisation, outsourcing, partnerships and matrix management styles are all equally up for grabs.
Build value, not sound bites: We all know that knowledge is power and data is the best way to derive that knowledge. With the limited resources available, give your CDO the right to work on the most important things in their work stacks. This means that the corridor drive-by conversations of “it would be interesting to know how many customers x, y or z…” should be kept to absolutely-must-know-can’t-survive-without requests for insight.
If data is part of your future strategy and survival, your CDO must have the direct ear of the CEO/Founder.
Data disciplines are poorly understood by anybody outside the data tribe because it is still a new and emerging field AND it is a deeply technical and mathematical domain. If the CDO needs to land the message through extra layers of generalist line managers before it gets to the CEO then the core of the message, the ability to answer inevitable questions, and the opportunity to debate from a position of knowledge will likely become lost.
What to know before hiring a CDO
There are a number of features that are common things to look out for that companies often fail to triage:
What type of CDAO does your business need?
If you want to find out more about how we can help you hire a CDO or any leadership role, contact us here!
ARTICLE by Jonathan Jeffries (JJ), Co-Founder, 24 September 2023