The Rise of the Chief Data Officer
There is a new kid on the block . . . the Chief Data Officer (CDO). There is no surprise in our data-driven world that such a role would exist. Yet, many organizations struggle with defining the role and value of the CDO. Effective implementation of a CDO may be informed by other historical evolutions in the C-Suite.
Examining the rise of the Chief Compliance Officer (CCO) in the 2000’s mirrors some of the same frustrations that organizations faced when implementing the CCO role. While organizations were accustomed to having legal, HR, and internal audit departments working together to ensure compliance, suddenly CCOs stepped in to pull certain functions from those departments into the folds of the newly-minted Compliance department. Integrating CDOs appears to follow a similar approach. Particularly in health care, the CDO role is still afloat, absorbing functionality from other departments as demand inside of organizations evolves and intensifies to focus on the financial benefits of their data pools.
Corporate evolution is challenging and often uncomfortable, but the writing is on the wall . . . there are two types of companies: ones that are data-driven and ones that should be. Which will you be?
What is a Chief Data Officer?
CDO responsibilities will vary depending on the organization. Some organizations position the CDO to oversee data monetization strategies, which requires melding business development acumen with attributes of a Chief Information Officer. In some organizations, the CDO may oversee the collection of all of the company’s data in order to transform it into a more meaningful resource to power analytical tools.
A survey of CDO positions identified three common aspirations that organizations have for the role: Data Integrator, Business Optimizer, and Market Innovator. Data Integrators primarily focus on infrastructure to give rise to innovation. Business Optimizers and Market Innovators focus on optimizing current lines of business or creating new ones. These aspirations will likely vary depending on the nature and maturity of organizations. Regardless of the specific role, CDOs can help organizations bridge the widening gap between business development, data management, and data analytics.
Further, a key component of a CDO’s activity will relate to responsible data stewardship. CDO activities will heavily depend on developing a data strategy that complies with legal, regulatory, contractual and data governance boundaries around data collection, use and disclosure. CDOs should work closely with legal counsel and compliance personnel to effectively navigate these challenges. Further discussion of the legal and regulatory landscape around data use is available here.
The Importance of CDOs in Transforming Healthcare Companies
It is clear that leveraging data will be key to innovating, gaining efficiencies, and driving down costs over time. Yet, many organizations continue to struggle with making sense of the data they possess. For some, the CDO may be a critical driving force to advance a business into a new landscape. Just as the CCO helped address decades of frustration with corporate ethics and practices (and was soon demanded by lawmakers and regulators), the role of the CDO has emerged in response to demand for efficiencies in business practices and the recognition that data has become the world’s most valuable commodity.
In light of the explosion of data in the healthcare industry, organizations should consider whether and how a CDO will fit into the corporate structure. Furthermore, organizations should work to understand how having a person at the table with a keen eye towards giving life to an organization’s data resources can benefit the business long term from internal and external perspectives. The ultimate question a CDO can help solve is: What don’t we know that, if we knew, would allow our organization to innovate or operate more efficiently or effectively?