What is a Chief Data Officer?
We live in a post-privacy age.
Our location can be pinpointed with GPS. Our photos and itineraries are known to the world, through our smartphones connected to the internet. We post our most intimate thoughts and opinions to social media for all to see. We browse targeted advertising based on our Google searches and online buying habits.
Tom Goodwin, head of innovation at Zenith Media, argues that we welcome this loss of privacy because we enjoy the benefits it affords us… right up until a company fails to protect our data.[i] Then we are up in arms about the violation of our privacy. It is the stuff of public relations nightmares.
At Echoworx, our own research finds another data privacy conundrum: the transformative nature of personal data after a breach. People are willing to disclose quantitative data, under the assumption it is protected. This same data takes on embarrassing qualitative characteristics once it becomes public during a breach – leading to a fatal loss of customer trust.
How are businesses to navigate these contradictions? How can businesses offer people the benefits of the post-privacy age without making them feel they’ve surrendered something precious? How can businesses gain the confidence to securely protect sensitive data?
One solution is found in the growing importance of the Chief Data Officer.
Rise of the Chief Data Officer
The Chief Data Officer role was born during the 2008-09 financial crisis. In the aftermath, there was a clear need for a person who could ensure compliance with increased regulatory demands. More than ever in banking and finance, data and its reporting to regulators required greater scrutiny. For years, data had been an afterthought in most organizations. Had available data been managed effectively at the time, we might have had warning of the crisis, or been able to make a more complete recovery.
In the decade since, however, the role of the CDO has expanded and evolved as the era of Big Data dawned. Suddenly the value of data as an asset became clear. The CDO was needed to take charge of maximizing its value.
In 2012, the advisory firm NewVantage Partners began an annual survey of Fortune-1000 c-executives. That first year, only 12% of firms had a CDO. By 2018, that number had risen to 63.4%. This trend looks set to continue. By some estimates, a Chief Data Officer will be considered a “mission-critical” role in up to 75% of large enterprises within the next 3-5 years. Even the Pentagon has hired its first CDO!
Why you need a Chief Data Officer
The CDO’s chief value today is as the point-person for optimizing the vast amounts of data generated by today’s companies. He or she can extract value from it, and foster innovation around Big Data and analytics. The CDO drives technology solutions, enhances cybersecurity and increase revenues. He or she works to eliminate data siloes and redundancies. Technological change is managed to reduce the costs of “data wrangling” within a company.
The CDO plans and executes corporate strategy around emerging technologies such as artificial intelligence (AI), machine learning, and blockchain. The CDO also represents an agile solution to the fast-moving developments in regulation and data privacy for which traditional management may not be well suited. As technology evolves, so too does the CDO role.
Privacy vs value in a post-privacy world
Data is a double-edged sword. It holds tremendous value for corporations. It also demands careful stewardship of information entrusted to them and promises liabilities (both financial and reputational) in the event of a breach.
By bringing all data and related activity under the CDO, organizations can establish systems to ensure that all data gathered by, stored, or shared within an organization is treated securely, ethically, and in compliance with local and international laws and regulations.[ii] Proper data management and careful application of security measures, such as enhanced encryption of sensitive data, can help reduce enterprise risk. These policies also allow companies to maximize value from the data they collect.
In this post-privacy era, corporations that interact with sensitive customer data must adapt if they want to be successful. If they focus on “serving people better” with explicit requests for permission, clear opt-ins, rigorous security and encryption, they can build a “value exchange over a lifetime” with customers. This is the kind of transformation that the CDO can bring to organizations. In this way, the CDO helps navigate the line between privacy and post-privacy in a connected world.
By Alex Loo, VP of Operations, Echoworx