Data is no longer a differentiator. Businesses now need data simply to survive in today’s commercial landscape, with every sector – from hospitality to finance, aviation to retail, healthcare to telecoms – using data to drive operations, react to customer behaviour, manage supply chains and offer more personalised experiences, amongst a multitude of other data-driven activities.
For businesses to turn data into a commercial differentiator in today’s increasingly digital world, it needs to become part of the fabric of their business: with every aspect of the organisation living and breathing data, and every individual empowered to take insights and make decisions with data.
While the vast majority of businesses recognise the importance of data, many are still struggling to embrace it at such a fundamental level – and they are missing opportunities to generate value as a result. For a lot of businesses, data initiatives still exist in isolation, ring-fenced by particular departments (such as marketing, or e-commerce, or logistics), as opposed to driving the business’ overall growth.
To change this, organisational attitudes to data need to change at board level. Incorporating data into c-suite insight and decision-making enables a top-down transformation that brings data into central discussions and allows data insights to branch out to every area of the business. At least, it does in theory.
The reality is not quite so simple. While board level data buy-in has dramatically improved in recent years, for many businesses it still isn’t where it needs to be in order for them to grasp the full capabilities that data offers them and communicate positive data practices to the rest of the business.
Data disruption at board level
An extensive study – Big data, big decisions: The impact of big data on board level decision-making - examined the disruptive effect that Big Data is having on organisations’ senior management, finding: a shortfall in directors’ capabilities for dealing with big data; a lack of board cohesion that’s compromising data-based decision making; and a desperate need for boards to work in new ways and enhance their cognitive capabilities to meet the challenges and opportunities that Big Data brings.
In recent years, more impetus has been placed on creating c-suite roles to address this issue: for example, 65% of Fortune 1000 businesses surveyed by NewVantage Partners in 2021 had a Chief Data Officer, compared to just 12% in 2012. However, there are still challenges impacting the efficacy and impact of those roles. The result is data leadership with short tenures (an average of 2.5 years for CDOs, according to Gartner research), which translates into disjointed, inconsistent and incomplete data strategies for the organisation.
The answer lies in businesses making the right hires, in the right roles, at the right time, to lead data operations at board level and transform data literacy and engagement across the entire business: from c-suite to entry level positions. At RPI, we’ve been playing a core role in this process for businesses, acting not only as a recruitment partner but as a consultant to help them carve out the right roles for their data leadership.
Here, we summarise the key challenges businesses face when integrating data at board level.
Creating the right role
Board level data roles – such as CDOs, CIOs, CDAOs and others – often face instability from the get-go. According to Harvard Business Review, the reason is simple: “many companies don’t seem to know exactly what they want” from the role.
While c-suite data leaders are held accountable for achieving major transformational change, there is often a lack of definition to the role from the start, with other board members struggling to define exactly what they want the role to achieve. It’s understandable, given that they are looking to this new appointment to take the lead on data, but it ultimately leads to disappointment – for both the business and the new hire.
The key is to outline what is expected from the role, and what results you want to see: whether that’s improved data security, better commercial outcomes from data, or something else entirely.
Choosing the right person
To succeed, senior data leaders need a mix of technology knowledge and board level experience (or at least, ability). Many CDOs, for instance, are hamstrung by their lack of leadership experience, with a recent article in Harvard Business Review commenting, “While CDOs may have data expertise, they typically lack C-suite experience and organisational leadership skills at the senior executive level.”
For data leads to influence the board, and the business, they need to be ready to push their agenda, illustrate their vision and present measurable results based on the definition of the role. Finding candidates with the right mix of leadership capabilities and technical expertise in today’s ultra-competitive market often means looking to neighbouring sectors – for instance, acquiring skills from telecoms to fill a role in finance – or tapping into global talent flows.
Allowing organisational change
For any board-level data hire to have an impact, they need to be able to affect organisational change. Data may be able to offer real-time insights into customer behaviour, market changes or supply chain issues, but if the business can’t act rapidly on that information, then that ‘instant’ data insight is rendered useless.
Businesses need to embrace agility and flexibility under the leadership of a CDO, CIO or similar data lead, with other board members needing to reframe their decision-making processes to incorporate data and react quickly to its insights. As the Big Data, big Decisions study identified, big data should “prompt directors to make decisions more rapidly and shape their capabilities to address environmental challenges.”
Although businesses in every sector, and every region, are actively using data to gain insight and add value to their offering, many are barely scratching the surface of what they can achieve with the data available to them. By incorporating data at board level, spearheaded by the right executive hires, they can unlock more possibilities with data.
RPI offer a practical solution to these challenges through our executive recruitment services. For advice on your BI, Data and Analytics - led transformation challenges, contact Hugh Williams on LinkedIn or via email at firstname.lastname@example.org.