Why the rise of the chief data officer will be short-lived

Chief data officers are becoming increasingly common, but for a data strategy to work their appointments can only ever be a temporary fix.

chief data officers

The role of data is increasingly moving up the corporate agenda and nowhere is this more obvious than at easyJet. The company made a surprising management shake-up following the appointment of its new CEO Johan Lundgren, abolishing the chief commercial officer role held by Peter Duffy and announcing plans to hire a chief data officer.

The move means the responsibilities of Duffy, formerly the top marketer at the company, will be distributed across a group of leaders reporting into Lundgren, with no one person having full oversight of the marketing function. Instead, Lundgren will put the focus on data.

Thomas Barta, Marketing Week columnist and an expert in marketing leadership, says the move “doesn’t seem logical”, describing it as a “step back for a customer-facing business”. However, Lundgren tells the Financial Times he sees the role as critical to help the company “further build on work we have already done with data science to exploit the opportunity of the billions of data points [we have] within the organisation”. He hopes the shake-up will improve the customer proposition, drive revenue and reduce costs.

The growing role of data

Data, and more importantly understanding that data, is an increasingly important part of many companies’ strategies and easyJet is not alone in introducing a chief data officer. Camelot brought in its first data chief almost two years ago when it hired Mike O’Donohue to the executive-level role. He reports into Camelot’s CEO Nigel Railton and is responsible for leading its transformation into a data-driven business.

“Our journey has been one of establishing a separate but complementary agenda for data within the organisation,” he explains to Marketing Week. “If you think about the genesis of most data analytics and insight capability, it is often very heavily embedded into either the marketing or the commercial function. We still enable marketing and commercial activity but also see a separate stream of value that will flow from creating data and ‘decisioning’ products. Instead of having the mindset of enabling value we are creating value.”

For example, the data team creates products that enable better decisions across the organisation, such as which stores the sales team should visit to improve execution. It also looks at the consumer-facing operation, working on features such as website personalisation and tools for player protection.

Mumsnet has been on a similar journey. It brought in Simon Martin in a new role as chief commercial and data officer almost a year ago as it looked to find which support tools, content and brands its users find most useful and “more intelligently” segment its audience.

The move has helped Mumsnet take a more holisitic approach to data. Before Martin joined data was analysed by team and optimised within a particular channel such as SEO, email or social.

We still enable marketing and commercial activity but also see a separate stream of value that will flow from creating data and decisioning products. Instead of having the mindset of enabling value we are creating value.

Mike O’Donohue, Camelot

“We now look at a user across all our channels to understand the jobs the user is trying to get done and how we’re delivering against them,” he says.

Brands like Camelot and Mumsnet arguably need chief data officers because they are still trying to work our their data strategies. However, at ecommerce company Flubit data has been engrained in its decision-making since day one. While it has a data team, there is no chief data officer, with the data function reporting into chief operations officer Steph Fiala. She has a background in data having previously worked on customer experience and product development at the company.

Flubit CEO Bertie Stephens says: “Data has always been our number one decision-making tool. How we treat data is a key strategy through the company. We won’t make a decision to go live with a product or feature or strategy without a data point that acts as a basis of a hypothesis.”

A short-term fix for a long-term challenge

Both O’Donohue and Martin come at data as people with backgrounds in its use in marketing. Prior to joining Camelot, O’Donohue worked in the customer insight and data teams at Tesco and British Gas. And he believes it “helps enormously” if a data chief has a marketing background.

“[My role is about] how we wire data into the organisation in a much more effective way, so an understanding of the demand side of the business and fulfilment is important,” he says. “Often the challenge that data people face is they don’t understand [the company’s] decision-making and what it is trying to achieve; that is almost essential to be successful.”

READ MORE: Russell Parsons – Don’t put data before strategy 

But O’Donohue doesn’t believe data can replace marketing, instead seeing the roles as “complementary”. He says most companies will need a marketer at executive level who understands brand, strategy and the customer proposition but who can enhance those capabilities with data, whether that be through better analysing outcomes or enabling the team through new tools.

“It strikes me that the whole is greater than the sum of the parts,” he explains. “[At Camelot] we’ve enhanced and augmented [marketing’s] capability rather than replacing it.”

Yet it is unlikely this growing use of the chief data officer points to a long-term addition to the executive team. Most are brought in to instill a data strategy across the business; once that is done their role should no longer be needed.

Barta explains: “Installing a board level chief data officer can be an important – temporary – move if a CEO sees the need for large-scale cross-company data initiatives. But once a firm’s data strategy is clear, data implementation will have to move back into the line to be sustainable.”

That is certainly what O’Donohue expects to happen. His role at Camelot is about helping the company make the transition to be a data-focused business, but he admits that “at some point that transition will be made” and data will be integrated into ways of working.

Once a firm’s data strategy is clear, data implementation will have to move back into the line to be sustainable.

Thomas Barta

“Chief data officers are there to augment and enhance an existing operating model with data, and championing that and making it happen. There comes a time when that job is, to some extent, done and the organisation is more or less transformed, when an organisation is naturally thinking this way and that catalyst that is the chief data officer is no longer necessary,” he explains.

Martin agrees, questioning whether a chief data officer can have a long-term impact, which why he has the commercial aspect to his job too. “The danger with the chief data officer title is that it can feel too technical or compliance-focused. Both are absolutely critical, of course, but roles like chief customer officer are more focused on outcomes and generally carry more weight to get things done.”

As brands find themselves with ever more data, aligning the whole company behind a strategy that makes the most of that information is key. Once that job is done there should be no need for a chief data officer. But marketers must make sure they are leading that agenda, or someone else will do it for them.

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Comments
  • tom wright 27 Feb 2018 at 9:22 am

    I rather doubt the CDO role will be shortlived, and the idea that once a data strategy is established ‘their role should no longer be needed’ I find rather astonishingly shortsighted. So data integration and management challenges disappear do they? Supply chain software and predictive analytics are static are they? The underlying technology landscape never changes?

    Modern marketing is done on technology platforms connected by API. Everything in it is about data. The decisions a business makes are only as good as the data on which they are based, and last click attribution shows marketers working in isolation can create and work on wrong data points.

    The role of the CDO is in tech enablement – it is not a marketing role at all. It isn’t about making business decisions, its about empowering them. It doesn’t require deep knowledge of the customer, it requires tech knowledge working in partnership with marketing to turn data into insight. Its about data governance, data management, data compliance,data security and above all its about the democratisation of data – making accurate, timely data available to as many people in an organisation as possible so that they – the line of business management – have the fullest possible data on which to base their decisions. It is not about making decisions, it is about empowering them.

    The CDO role does not threaten the CMO. Is it board level? That’s a different question, and the savvy CMO should be creating a CDO role that reports to them rather than having it imposed alongside.

  • Ashley Friedlein 27 Feb 2018 at 9:53 am

    This very much echoes what I said in my digital trends for 2018 (section 4.2 about data at https://econsultancy.com/blog/69737-ashley-friedlein-s-marketing-and-digital-trends-for-2018/). Firstly, marketers need to get better at data (then we wouldn’t need Chief Data Officers perhaps) and secondly, ‘data is the new digital’, so just as we have ‘Chief Digital Officers’ which we expect to go (but haven’t so far for 5yrs) I wouldn’t write off Chief Data Officers yet as they’ve only just started getting going. They’ll be around for at least 5-10rs I reckon.

  • Tadas R. 27 Feb 2018 at 10:46 am

    EasyJet is fighting for the lowest price position in the category, therefore it is quite sensible to introduce efficiency by cutting marketing off.

  • Valentin V 28 Feb 2018 at 1:31 pm

    Totally agree with the previous comments. Digital data is a new tool which is constantly evolving. Inviting a CDO to make sense of data and to map out a strategy for next year and leave is short-sighted. Data are live. Expect the unexpected. In my opinion, it is marketing troopers (execs and managers) who must master data and analytics.
    Secondly, the birth of the CDO happened because there are hundreds of metrics that you can look at. The problem is, 70% of marketers don’t understand which metrics are important and which are trivial.

  • Jake Collier 4 Mar 2018 at 12:40 pm

    It seems to me that this is being driven by the upcoming legislation regarding GDPR and whether the role of a CDO is short lived or not will very much depend on how businesses embed into the culture of their organisation the new business practices that will be needed to ensure they are ready in the short term and in the future fully compliant.
    Elizabeth Denham, UK Information Commissioner 18.1.18 – “The new legislation creates an onus on companies to understand the risks that they create for others, and to mitigate those risks. It’s about moving away from seeing the law as a box ticking exercise, and instead to work on a framework that can be used to build a culture of privacy that pervades an entire organisation.”

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