Feature
The Gist
- Business focus. Chief data officers (CDOs) must prioritize business leadership over technical prowess, creating value-adding data products.
- Quick wins. CDOs should deliver tangible short-term benefits, enhancing operational efficiency and customer engagement.
- Privacy navigation. Amid complex data privacy legislation, CDOs need to ethically lead companies through the "gray zone."
"The first CDO role was created in 2002 by CapitalOne," said Elena Alikhachkina, executive adviser and former data and analytics executive at Danone, Roche and Johnson & Johnson. "The role was born in a financial services organization, and it started out as a defensive position. The CDO had to protect data, connect data, and govern it."
Over the last 20 years, there has been a growing trend among large corporations to incorporate the position of chief data officer (CDO) into their organizational structures. This is reflected in the "Data and Analytics Leadership Annual Executive Survey" of Fortune 500 companies conducted by Wavestone. "In our 2023 survey, 82.6% of organizations report having appointed a CDO or CDAO," said Randy Bean, innovation fellow at Wavestone. "This is a dramatic increase from the 12.0% we got when the first survey was conducted in 2012."
Not only has the position become more widespread, but it has also leaned more toward offense, with a focus on delivering insights that lead to revenue. Corporate leadership is clearly counting on CDOs to do more.
To thrive in their positions, data leaders need to be aware of the four emerging expectations below:
1. The CDO Must Become More Business Oriented
"Organizations are trying to find somebody who understands the business, is good at change management, and is also highly technical," said Alikhachkina. "We all know from skill development grids that this type of unicorn rarely exists."
Focus on Business Leadership
Given a choice, the CDO should be more of a business leader than a technical leader. Business leaders build a team with the right combination of skills, and they support their decisions with measurable benefits.
Create Data Products
CDOs are now expected to create data products, which are defined as value creation tools. The data leader may have a product team, which delivers data products to consumers. Consumers could be inside the company or outside the company — and they have specific needs to resolve. An internal need might be something like evaluating the market performance of a product or service. An example of an external need would be creating a personalized experience for customers.
Helping Business Leaders Understand Data Insights
"Data quality, data assurance, compliance, technology platforms, and architecture — those parts of the CDO role are relatively easy," says Asad Khan, head of data, analytics and automation at Telenor Sweden. "The more difficult part is about helping business leaders understand what the data is saying and using that to make the right decisions. That's a cultural shift you need to go through to become a truly data driven organization."
Develop a Data-Driven Culture
"The CDO role is now more about people and how you get people to use data effectively," said Khan. "You must cut across different parts of the organization and develop a data driven culture across the company. But to do this, CDOs need the right mandate."
Related Article: 5 Essential Skills for Today's Chief Data Officers
2. The CDO Must Deliver Tangible Short-Term Benefits
Data governance and new technologies will have long term benefits, but companies are looking for short term gains. Instability in the economy and inflation put more pressure on CDOs to produce outcomes in a shorter time frame.
Help the Company Engage With Customers
Data should be used to help the company engage with customers in new ways and to improve margins. A growing portion of active consumers are young people with new expectations on how companies engage with them. CDOs need to ask how they can be more relevant to the company's customers and how they can create new value for their customers.
Enhance Operational Efficiencies & Invest Time With People
"Data should be leveraged to enhance operational efficiencies," says Alikhachkina. "However, it's crucial not to settle for superficial recommendations that may be appealing but lack substance. To uncover the truth, you must invest more time with people engaged in real business operations. This means collaborating with factory floor workers, interacting with store staff, and engaging with customers directly."
Act Like a Scientist
"CDOs should adopt a scientific mindset, backed by concrete evidence to support their assumptions. Much like scientists, data leaders need to gather evidence to validate or challenge their hypotheses. This entails conducting experiments within A/B type environments to model and test various scenarios in real-time."
Build Tests With Quick Turnaround Times
Khan agreed and added: “CDOs should understand how to build test routines, uncover customer profiles, and predict future customer behaviors with quick turnaround time and feedback loops to improve the learning process.”
Related Article: CIOs Warm to the Chief Data Officer
3. The CDO Must Navigate a Path Through Murky Data Privacy Legislation
"The chief data officer must try to understand the person behind the data," says Alikhachkina. "However, this comes with potential risks to data privacy. It requires careful consideration and adherence to ethical practices."
New AI Risks
With each new generation of AI algorithms comes new questions about data protection. AI models train on large amounts of data taken from many different sources, often without the knowledge or consent of the person the data refers to. Moreover, once an algorithm learns something, it doesn't forget — and it assumes the data it trained on was factual.
False Inferences & New Legislation
A model may make inferences that are false and slanderous. But the system cannot forget the data without completely disabling the AI model. Alarmed by the new risks, European data authorities are now considering legislation to address these issues of data rectification and erasure with respect to generative AI. But that's just one piece of the legislative landscape.
Temptation to Avoid Any Risk
"A multitude of new data privacy laws are emerging," said Alikhachkina. "These regulations originate from various countries. Even within the United States, different states are enacting different laws, making compliance extremely challenging. As a result, some people may opt to avoid potentially taking any risk, sacrificing exceptional customer experience in the process."
Take Your Company Forward
More work is needed from regulators to better define what is possible. In the meantime, CDOs need to take the company forward, through the gray zone. “How data is used is a judgment call where a CDO can play a critical role," said Khan.
Related Article: Challenges or Opportunities? Maximizing Customer Data to Thrive in 2023
4. CDOs Must Develop a Clear Vision About the Use of AI
"Some companies have started renaming roles to things like chief data and artificial intelligence," said Alikhachkina. "But renaming something doesn't mean you've solved any problems. You need to understand why you're renaming it. You need a clear view about how AI may or may not help you."
The Huge Impact of Generative AI
"Generative AI is starting a huge industrial revolution as we speak," said Khan. "That has a major impact on CDOs and anybody working with data. It may be too early to tell exactly how it will affect their work — but it's clear that it will affect their role in one way or the other."
Understand the Ethical Aspects
The responsibility that comes with data lies squarely on the shoulders of the CDO. Data leaders need to understand the ethical aspects of AI. "The CDO needs to understand what to use and what not to use," said Khan. "Data has to be applied in a meaningful and ethical way. Otherwise, it might have big reputational risks for the organization."
Webinar
Sep
25
CMS Briefing: A Live Look at What’s Next in AI-Driven Platforms
Learn how leading organizations are using AI‑driven tools to publish faster, personalize smarter and stay secure.
Register
Webinar
On demand
Ready or Not: How Data-First Organizations Are Unlocking Agentforce Potential
Learn how to cut through the noise, activate Agentforce and build a Salesforce AI strategy that actually delivers.
Watch Now
Webinar
On demand
AI in Customer Service: Faster Resolutions, Happier Customers
Don’t let rising demand burn out your team. See how to build a smarter, more resilient support org.
Watch Now
Webinar
On demand
From Hype to High-Impact CX Strategies That Actually Scale
Turn buzzworthy AI and outsourcing trends into measurable CX wins with fresh 2025 data.
Watch Now
Webinar
On demand
Insights to Action Rethinking the Contact Center for Real Business Impact
Join our exclusive webinar to hear CX executives share their innovative strategies for transforming service delivery.
Watch Now
Webinar
On demand
Accelerating Healthcare Ops with AI
Sign up to see how your peers are putting AI to work — and making it stick.
Watch Now
Decide What You Can Do With AI
Many people assume AI can bring them closer to customers and help them create more relevant applications. There's an underlying belief that AI can magically make sense of mounting piles of unstructured data. The CDO needs to develop a strong opinion about what the organization can do with AI and communicate that opinion to business leaders. Sometimes that might also mean asking for new funds.
Build a Strong Foundation
"To successfully implement generative AI, you'll need a combination of proprietary and external data," said Vishal Gupta, vice president at Everest Group. "Therefore, CDOs who wish to build a strong foundation for generative AI need to actively invest in data strategy, architecture and cleansing capabilities."
The CDO Role Is Still Evolving
The CDO role has come a long way in its 20 years of existence. While most large companies now have a person with that title — or something similar — the job description is still a moving target. The expectations business leaders have of the CDO role will continue to change at least as fast as people find new ways of deriving value from data. To succeed at their job, data leaders need to anticipate the direction of the change and adapt as soon as they can.
Think Like a Business Leader & Deliver Tangible Results
What's clear for now is that data leaders need to think more like business leaders — and they have to deliver tangible results that affect the top and/or bottom line in the short term. In a complex regulatory environment, where rules on data privacy are still unclear, the CDO has to lead his or her company through a mess of regulation to get as much as they can from the data they collect or buy. Similarly, while AI will eventually change the way data is used, it's still early days. Here too, the CDO needs to lead the way through an unclear path.
