Chief data officers step into the business strategist spotlight

With data central to every aspect of business, the chief data officer has become a highly strategic executive. Today’s CDO is focused on helping the organization leverage data as a business asset to drive outcomes. This includes developing a data-driven culture where data and analytics are integrated into all functions and all employees understand the value of data, how to use it, and how to protect it.

Recent advancements in AI have further reshaped and expanded the CDO’s responsibilities and organizational impact, placing new emphasis on strategic innovation. Here, Jeffrey Voorhees, an experienced Fortune 500 chief data and analytics officer, observes a clear dividing line between CDOs focused on creating “endless one-offs and shiny baubles” and those who have their eye on the organization’s strategic goals, communicating value “in the language, parlance, and currency of the audience you’re working with.”

By communicating in ways that resonate with different functions, these CDOs gain allies and become indispensable business partners. “When your value is not felt or understood, you are subject to changes in financial and political winds, and your ability to contribute to a high-performing organization will be limited,” Voorhees says.

Investments to support AI adoption are on the rise, but many business executives are overconfident about their organizations’ data capabilities and readiness, issues their CDOs are much more clear-eyed about. A strong CDO who can communicate and drive the strategy is essential for getting value out of these AI investments.

I recently convened a roundtable of seven such CDOs from diverse industries to discuss the high-priority items on their agenda for the year ahead. Along with Voorhees, the group included Rajesh Arora, vice president and chief data and analytics officer at Principal Financial Group; Chris Bruman, chief data and analytics officer at Dow; Michelle Gansle, chief data & analytics officer at McDonald’s; Ravi Kapoor, vice president and digital technology and chief data officer at Collins Aerospace; Mike Vaughan, chief data officer at Brown & Brown Insurance; and Patrick Terry, senior vice president and global chief data officer at PRA Group.

Here are the insights these CDOs shared about how they’re approaching artificial intelligence, governance, creating value stories, closing the skills gap, and more.

Responsible AI: Balancing innovation and risk

The rise of generative AI has put a mirror in front of companies, showing them the work they have to do to strategically leverage their data. It’s a message CDOs have been yelling from the rooftops for some time.

Even when executives see the value of data, they often overlook governance. Gen AI adds greater complexity to governance because it brings in a broader mix and higher volume of data and regulatory guidance hasn’t matured yet, leaving leaders trying to anticipate what will be expected or applying traditional modeling approaches to this new space.

Building out a responsible AI structure is a high priority for leading CDOs. Principal’s Rajesh Arora says his leadership team is taking a two-tiered approach. The first tier involves Principal’s Ethical and Responsible AI Working Group, which brings together compliance, privacy, security, risk, and domain subject matter experts to create a framework for governing their work through various use cases. The second tier is a steering committee comprised of the CEO, CIO, and other senior executives that convenes quarterly for check-ins and feedback.

Collins Aerospace’s Kapoor shares, “When ChatGPT came out, that created a lot of demand across the enterprise.” This elevated the need to have a thoughtful, comprehensive communications plan to promote understanding about gen AI as well as responsible use of gen AI tools, something that’s particularly important for highly regulated industries.

Gansle says a critical piece of McDonald’s journey has been investing in two full-time roles related to responsible AI. One person is focused on working with legal and compliance and navigating changing regulations, while the other is dedicated to communication and education.

Like Kapoor, Gansle says communication and education have been vital for ensuring McDonald’s employees are able to “balance the rewards of AI with the associated risks. A lot of the education has been focused on how to make it practical and usable for them, but also, for example, if you’re working with a supplier, how should you bring that to the organization? There’s a checklist on what you should be asking them, so there’s the risk education as well,” she says.

Developing and expanding data literacy

These CDOs are also leveraging training programs and university-style frameworks to increase data acumen across the enterprise, upskill internal talent, minimize resistance to AI, capture more insights about how AI can be used to drive business outcomes, and more.

At Dow, Bruman says investment in a data and analytics literacy program has paid significant dividends, and it’s provided a structure and approach for getting the word out via what they call a “guru network.”

“When we started the program, we picked one leader from every business unit and every function and took them through a three-month cohort to immerse them in D&A literacy. Then we asked them to go out, find people in their function that are passionate about it, and get them to opt into this guru network,” he says.

It wasn’t difficult finding people who wanted to be a part of it. “Employees are eager to learn about this because they know to be relevant 5, 10, 15 years from now, they better learn more about digital and analytics and AI,” Bruman says. “People are knocking at the door, wanting to learn more.”

To help build acumen “at the top of the house,” Dow hosted an AI immersion event with the company’s top 150 senior leaders to educate them on gen AI and facilitate brainstorming on how AI can be used in the business. Additionally, Bruman’s team conducts monthly digital acumen sessions with business unit leaders, leaning heavily on “showing, not telling, and engaging leaders in hands-on activities and brainstorming,” he says. “That has been a game changer to get senior leaders really understanding what we’re talking about versus just hearing about it and seeing a PowerPoint presentation.”

Voorhees has seen great benefit from extending data literacy programs to include AI technologies. By maintaining executive awareness about the artificial intelligence landscape and its relationship to corporate strategies, literacy programs create an ongoing, two-way dialogue about ideas and opportunities, he says.

“These programs remove common barriers to change management by addressing and ‘pre-debunking’ concerns about the role of artificial intelligence,” Voorhees adds. “This approach to data and AI literacy helps create invested partners at all levels of the organization and prevents associates from experiencing that transformation is happening to them as they are being dragged along against their will.”

Arora, whose team at Principal has extended their data literacy program in a similar way, says focusing on the human element is crucial. “It’s training the mindsets of the employees that gen AI is here to help create efficiencies for you and not to replace you,” he says.

Leading the data journey

CDOs are also leading their organizations through a broader evolution in data and analytics, one that requires building relationships and getting buy-in from senior leaders and other stakeholders across the enterprise.

To do so, and facilitate greater collaboration, Bruman says Dow is shifting to a decentralized approach.

“With so much demand and everything coming through a centralized team, we were a bottleneck. So we’re moving to more of a hub-and-spoke model,” Bruman explains. “For each of the spokes, there’s a senior leader who sits on our data and analytics council. It’s been very helpful as we develop the strategy because we can ask, ‘Does it fit for the vision of the company? What are we missing? What should we remove or change?’ And then as we make progress, we can make sure they understand the value of what we’re doing. It’s been a huge help in getting buy-in, support, and investment.”

Principal’s Arora emphasizes that every investment needs a business case, and it’s important to remember that value created doesn’t automatically mean value realized. “The focus we’re driving is on building a disciplined approach where everything is backed by a business case. This includes a well-defined value narrative and an integrated process to ensure we can track and realize value effectively,” he says.

Creating value stories

Storytelling is a critical and underappreciated aspect of the CDO’s job. Selling the value of the work their teams do is another area where communicating in the language, context, and business drivers of their audiences makes all the difference.

“We’re not talking with senior leaders or the board about constructs like a data mesh or data as a product from an academic or technical standpoint,” Brown & Brown’s Vaughan says. “We’re talking about it in terms of the business outcomes it drives. We identify use cases where we can share or leverage data and talk about how it drives margin or revenue to demonstrate the business value of making the investment from a platform perspective or from a governance perspective.”

Vaughan echoes Bruman’s point about the power of showing versus telling: “Try to show what it looks like, as in, here are some of the things we can do very specifically that drive a business outcome in the near term. And here’s the art of the possible — a view into what that looks like in the long term once you start doing this work across the business.”

In some situations, having other business leaders share the value stories can be even more effective. Vaughan recommends equipping the stakeholders who’ve already signed off on the business case to communicate the value story on your behalf.

Using analogies, anecdotes, and examples to create a story rather than just talking about the value proposition is a powerful way to answer the question that’s always in the back of business leaders’ minds: “So what?” As Gansle of McDonald’s says, no one wants to hear about semantic layer and master data management; they want to know what it means for them.

Sometimes the story needs to sell the value of patience. As Terry of PRA Group says, it can be challenging to get the runway to integrate capabilities and “build a better machine” when there’s intense pressure to show immediate financial impact. “You have to figure out how to tell that story in a way that garners investment for the time needed to deliver it right: ‘I’ll move fast, but not as fast as you want, and this is why,’” he says.

An evolving role

Most large companies now employ a CDO, but the role is still often misunderstood by various parts of the business. Many organizations seem to be going through an adjustment period in terms of ensuring the CDO is positioned effectively to drive business outcomes.

“I’m always curious when I talk to other data leaders about who they report to in the organization,” Terry says. What he’s found: “It’s almost never consistent, and it’s nearly always one removed from the CEO. Alignment matters, and that ambiguous nature may be why the average tenure in this role is 28-30 months when others are at least 4 to 7 years.”

Despite being a relatively newer role, the CDO has already become a key strategic enabler, and that evolution will only accelerate in the years ahead. “Data analytics is becoming more of a competitive advantage than technology these days,” Gansle points out.

For his part, Kapoor is embracing the opportunity to continuously reinvent himself.

“If I look at what I did in my data role 10 years ago versus what I’m doing right now, it’s very different. But I was willing to go to leaders and argue my case for investment, committing to a return that would benefit the business,” he says. “We are on that roadmap now and our returns are more than what I even predicted. So sometimes you’ve got to put yourself out there and believe in the work.”

As the role evolves, Bruman advises putting in the effort to build one-on-one relationships with critical leaders across the company. “Get out in front of senior leaders and make sure that you’re hearing them first so they’re not coming in after the fact. Bring them in early and get them involved,” he says. “It’s taken more effort than I could have imagined when I took the role, but it certainly has paid dividends.”