Seven Habits for Effective Chief Data & Analytics Officers

Technology continues to be seen as the driving force for data and analytics. Instead, we need to see data and analytics leaders as surfers on a technology wave. Everybody has access to the technology and that continues to develop and raise the bar, but it’s the skills you must exploit the technology and how you ride the wave that makes the big differences. Step one in this journey is that data and analytics (including AI) are like Ying and Yang and the leaders who bring them together can truly differentiate their businesses from businesses that have either a Chief Data Officer and/or Chief Analytics Officer. The differentiated organisation is led by a Chief Data and Analytics Officer.

Combining my research and industry experience I am developing the Seven Habits of Chief Data and Analytics Officers (the CDAO).?

Habit #1

Customers are King (or Queen): Data is central to understanding your customers – what motivates them, what their needs are, and what they are inclined to buy (and for how much).?The great companies combine all the data they must predict the needs of their customers and designs products and services that meets those future needs. That’s achieved by your Data leaders working closely with product, marketing and customer stakeholders and identifying the opportunities where Data, Predictive and Prescriptive Analytical Models (Machine Learning and AI) can be deployed to create transformative products and services for Customers. If you think that a typical Credit Rating agency uses about 100 Data Attributes to provide a Customer Credit Score, a leading Grocery Retailer has c.1000 data attributes to tune products and promotions for their customers, but the likes of Amazon and Google have 25,000 (!!) attributes of data about each of their customers, your Data Leader and how they can collect, manage, refine and fuel data for your Marketing, Product and Supply Chain will be one of the critical, if not the most critical Value Drivers of your business.

Habit?#2

Masters of the External Environment:?In addition to collecting great Customer Data, the real advent of ‘big data’ was the need to start to collect and leverage data from outside the organisation including Video, Audio, social media etc. That data can be used to augment an understanding of Customers and in addition central to understanding our external environment, competitors, and suppliers. Those companies that live in highly competitive markets have already had to understand this, they use data and analytics to understand what competitors and new entrants are doing and aim to be at least one step ahead. As markets and environments become more and more volatile, all businesses need to be more agile and data is central to sensing, identifying, and responding to potential external challenges as, and when, if not before they happen!?

Habit?#3

Building a Data Driven Business Model: In building your business model, it needs to be underpinned by an extendable Data Model. The Data model should be built by looking at the Value Drivers of the organisation, which allows the creation of a KPI /Metric Model which gives uninterrupted line of sight between your Level 1 Key Performance/Results Indicators (like Revenue, EBITDA, Free Cash Flow) you report to Shareholders, and the underlying operational metrics of the business (Customer Lifetime Value, Cost of Goods sold, Employee Costs etc etc); as well as those critical Sustainability and ESG metrics. The Data Model can be built around that core performance model and will be owned by your Data Leader. I cry when people say they can’t measure the benefits of Data investments… Why, because the discipline of Data and Analytics, includes Business Intelligence and Reporting! In other words, the smart Data Leader is also accountable for providing the key reporting of business performance, so you have the absolute levers at your disposal to measure whether the initiative you’re accountable for has made a difference to the cost, revenue and/or profitability of the business! A Data Model will be central to your business operating model and facilitate the migration of your process model into the background.?

Habit #4

Governance and Regulation – your friend not your enemy. Data Governance has been seen as a problem and the enemy of successful Data leaders, but in my opinion #Risk and #Performance are two sides of the same #Data . If you have a single Data Model, built in partnership with the rest of the business you have the nirvana to manage #risk , #performance and #sustainability . That’s easier said than done, and just understanding the components of Cost, Revenue and Profit in a large business is a substantial undertaking. Building a network of Data Owners and Data Stewards in the business, who will be your arms and legs (and use the data every day, so it’s in their interest for it to be right) is critical and cost effective. Furthermore, central to the privacy laws of most countries is a set of principles that define how personal data are collected, shared and processed. However, consumers often do not know the benefits and costs of the data that pertain to them. Data leaders need to understand those laws and work closely with Legal/General Counsel (the Data Protection Officer) as well as Marketing, Sales and Finance – typically the data you use to market and sell to a customer is the same a regulator wants to know that you sell and market to a customer and whether you have their consent!?

Habit #5

Migrating to a Data Driven (Micro Services) Architecture in the Cloud: The Intelligent Business operating model is one where Data Serves People and masters Process and Technology. Businesses need to redefine their operating model so they are not limited by the strait jacket of legacy ‘process models’, so that they can embrace a much more Agile approach. Processes will need to be dynamically reconfigured to meet the rapidly changing needs of customers and reconfigure what the business is delivering as Services.?As more logic moves into your Data estate, your monolithic business process systems (CRM, ERP, SCM etc) can be dramatically downsized and become what Technologists call ‘Micro Services’ – at a fraction of the cost.?We will do that with APIs, machine learning and analytics, all supplied by your Data and Analytics leader, and managed by your integrated Data Model. Your Technology Estate is increasingly sitting, not in your premises, but in the Cloud, and with your Data available in one (or multiple cloud platforms) and liberated from the control of your 'enterprise systems providers', your business can take control of the Data Model and use that to drive agility across the organisation.

Habit #6

Servant Leadership – Data Serves People. Perhaps the most important capability for a Data Leader is to remember it’s all about people!! And typically, three key communities that need to be addressed. The first community are your (external) Customers (mentioned in principle 1, Customer is King or Queen) – you must be using Data and AI to develop products and services that make a difference to the end customer. The second community is the people within organisation – the whole concept of the Intelligent Business is to ensure that the Data in your business serves the people in your business to help them make better decisions, which improve service to the end customer and allow the organisation to deliver better revenues, lower costs and improved ESG outcomes. That means upskilling the whole business and developing amongst other things ‘citizen’ data scientists as well as ownership of data amongst the whole employee population. The third population is the Data and Analytics team themselves, and the job of the effective Data Leader is to create, grow and nurture a great team and provide them with exciting work that delivers transformational products and services for the other two populations.?Data rarely delivers value in isolation, it’s when it’s combined witg other activities that it becomes an enabler, and a multiplier of value creation. The Data Leader must be a master collaborator. Ultimately your job is to be the Servant of the servants who use Data to serve people!!

Habit #7

Data Strategy Underpins Business Strategy:?Critically, your Data Strategy and more importantly the tactics and logistics you employ to execute upon it, will be at least as important as your People Strategy in delivering your business outcomes and the Data enabled Transformation the fundamental business change your business needs over the next 10-15 years. The reality is that we discuss Data Literacy as key, but ultimately Data and Analytics capabilities are not just part of the Data team, rather Data and Analytics (DnA) needs to be central to the DNA of the organisation or business for it to be effective and productive to operate effectively in today and tomorrow’s world. How your business (or organisation) chooses to differentiate and deliver sustainable competitive performance, data and analytics capabilities will be a Valuable, Rare, Difficult to Imitate and the Organisation therein will be both key to delivering that Competitive Performance as well as Measuring and Managing it.

I will be using this blog to elaborate on each of these principles over the coming weeks. Please do not hesitate to share your comments and thoughts as we go through this journey!

Together with Data Leaders, we will be creating more opportunities to contribute to, learn from and leverage the research I am developing towards a Doctor of Business Administration, with Aston University.