By Ryan Polich
For over a decade, Partners at Calibre One have guided our clients through exponential growth in data volumes and critical innovation in Data, Analytics, and Artificial Intelligence (AI). 2023 has been the breakout year for AI, with new roles like Chief Analytics Officer or Chief AI Officer confirming that AI will disrupt the design of the C-suite. However, the Chief Data Officer (CDO) remains the indispensable data role within a Chief Executive’s team at companies of all sizes and across all industries.
2022 saw an acceleration in the rate of CDO appointments across industries and regions. PwC’s second Chief Data Officer Study found that 27% of leading firms had a CDO in place in 2022. Interestingly, the study found that Europe beat the US in terms of the proportion of leading firms with CDOs (42% in Europe vs 38% in the US). Those Europe-based appointments were principally made in the UK, Switzerland, and Germany. However, the larger US economy means that half of the world’s CDOs by number are in US companies.
The CDO mandate evolved in response to several key factors:
Data proliferation: the sheer volume and variety of valuable data demands a dedicated leader to manage complexities and make sense of a wealth of information.
Competitive Advantage: CDOs extract actionable insights from data to inform strategic decisions across an enterprise.
Digital Transformation: data is central to digital strategies and CDOs are instrumental in aligning data with broader business objectives.
Compliance: stringent business regulations like GDPR and CCPA demand a CDO to ensure data privacy and mitigate risks.
What makes a CDO distinct? Unlike a Chief Information Officer’s infrastructural mandate or a Chief Technology Officer’s focus on engineering production, the typical CDO oversees an organization’s entire data strategy. That mandate positions a CDO to drive decision-making through data, to reduce costs by eliminating inefficiencies, to mitigate risk through compliance, and to grow revenue by discovering unique customer insights and hidden market trends. The CDO is an intensely cross-functional role.
Challenges in Hiring (and Keeping) a Chief Data Officer
We know that finding the right candidate for CDO is challenging, as it is an evolving role and in high demand. Here are some of the difficulties organizations often face when trying to hire a world-class CDO:
Skill Diversity: CDOs require a diverse skill set, not just technical expertise. Business acumen, astute communication, ethical clarity, and credible leadership with peers are all critical for success.
Collaboration: without a champion in the CEO, a CDO’s broad impact can drive conflict across the team as data-driven insights challenge workflows, headcounts, budgets, and customer value.
Organizational acceptance: CDOs must align their data strategy with the organization’s specific goals and culture. Seamless integration is a real challenge.
Data Governance: CDOs must navigate the intricacies of data management while ensuring compliance and security.
CEOs who successfully recruit and empower CDOs stand to gain significant advantages as Data, Analytics, and AI lay the foundation for our future. To the great consternation of CEOs, the rise of the Chief Data Officer has contributed to high demand for those with the skills and experience to do the job well. An acute talent shortage has been the result. Costs are up for successful operators and stakes are raised for flex candidates. This has been a focus area of mine for many years and it’s gratifying to see the great benefit that our clients have been able to realize through the appointment of a world-class CDO.