Organizations are learning that data is no longer confined to the IT department. Data is a critical corporate asset that plays a key role in effective enterprise risk management. As such, it has become a key topic for discussion among both the executive and non-executive board. And, many organizations are restructuring to take better advantage of this key strategic asset.
In 2006, Citigroup became one of the first major financial institutions to name a chief data officer (CDO). “The leadership of the company recognized that data is not only important for good decision making, but also that we need to have much more integrity around how the data is created, stored and analyzed, and who is using what,” says Jennifer Courant, a Managing Director for Risk Architecture at Citi in the US. “Creating the chief data officer role was one response to those challenges.”
Since 2006, many boards have appointed CDOs to work closely with their chief risk officers to evolve the organization’s culture to a data-driven, risk management organization. Here are six steps to help your organization evolve to a successful data-driven organization.
Six steps for data-driven success
- Establish a clear vision. This clear vision is critical to producing a culture focused on data and results. It is not enough to have the vision; the CDO must also consistently promote the vision to the organization. The board and CDO must present the vision to the business units by providing the overarching rationale for this shift in culture and its benefits, setting the stage for the work ahead. A primary focus at this point may be to clarify misconceptions about creating a data-centric culture versus simply using an isolated set of tools or reports to provide information (e.g., “Don’t we already use a data warehouse?”). These discussions are rich with opportunity to establish a common vision and mission.
- Research and learn from others’ successes. Once the vision has been conveyed, seek input from thought leaders in other organizations that have successfully made the transition. Observations and discussions might involve learning of potential pitfalls and their solutions, discussing strategies and processes, or simply getting a firsthand feel of the climate. This approach can often lead to a clearer picture of the undertaking and how your organization can model successes and best practices and address potential roadblocks.
- Examine infrastructure for effective data use. At the beginning of the process, establishing a strategic relationship between the board, CDO and senior technology leaders provides valuable insight given their expertise on the systems’ data architecture and routines.Conduct a critical review of current data and infrastructure, including database systems (e.g., human resource, financial, administrative applications, etc.), data warehouse applications, analytical tools and legacy systems. There should also be an analysis of the informational, operational and strategic needs and goals so that the development of the decision-making process can address these.Consider involving reputable IT industry leaders, as their expertise can be valuable with planning and provide options regarding applications, product families and strategic support. Technology partners’ experience and expertise will also ensure that decisions concerning data and its access are based on realistic timelines, processes and support needs.
- Ensure buy-in, commitment and trust.Involving others in your vision and process is important. As others begin to embrace the vision and take an active and equal part in its implementation, tasks may become more manageable and barriers due to individual resistance can often be resolved through relationships and buy-in with peers.A key step in the culture change will be to reinforce trust and seek collaboration regarding the specific steps in the process, desired outcomes and methods for implementing the change process. Instigating a shift in culture will likely create a sense of fear or hesitancy about its impact on individuals’ roles, responsibilities, statuses or workloads. Perhaps the existing climate is one in which a few individuals are the gatekeepers of the organization’s data and guard it carefully, or one in which each department or business unit functions as its own data silo – creating, managing and applying its own data without consulting with others. Transitioning to a system that views data across the enterprise and invokes group sharing and ownership will require honest discussion of the change process.
- Establish data meetings. Establishing regular data meetings is of great importance. The major focus of these data meetings is to assess current levels of performance insofar as how the business units are doing, where they need to be and how they will get there. These meetings provide opportunities to monitor progress and barriers, reinforce the focus of the change, and introduce new ideas and goals. Discussing the dashboard of key indicators at the beginning of each meeting, for example, relays the message that leadership is monitoring progress and the process has value. These gatherings and their discussions offer opportunities to celebrate incremental successes, dissect and overcome barriers, and increase the contribution of other staff members toward areas of need and strategies for improvement. Also, the CDO and other leadership must have a say in the discussions of parameters for what is considered good, average or “needs improvement” for the indicators being targeted for change.
- Remove or modify barriers to effective data use. The previous steps have increased support for data use, so now the board and CDO can center efforts on minimizing barriers to further expansion and development. Making the shift to a data-driven culture may often necessitate realignment of resources, changes in policies or procedures, capital outlay issues or a host of activities that require the board’s stamp of approval.One such area is a review of organizational policies and practices. Are there processes in place that do not support the culture shift? For example, does policy allow only senior-level administrators to access certain regional information? Perhaps existing reports are branch-specific. Addressing these barriers may create the necessary change (e.g., eliminating static, paper reports or data silos). These roadblocks should be removed as soon as possible.The board and CDO should also support leadership teams as they encounter the informal gatekeepers and the resulting power struggles over data access. Often, as new processes or practices relating to data access are implemented, there is a resultant shift in who controls the information or its flow within the organization. Many times these changes upset the informal power structure. The CDO should stress the continued openness regarding information and access, and quickly squelch turf battles regarding data access and reporting.
Creating and sustaining a data-driven culture is a necessary function in today’s information-driven climate. Achieving this goal is not a random act – leadership does matter. Regardless of the resources, structure or size of the organization, the board and CDO need to address these steps to ensure success at turning data into useful knowledge.
Steps adapted from Creating a Data-Driven Culture: Leadership Matters byLane B. Mills, PhD, Associate Professor at East Carolina University.