Sector News

Why do Chief Data Officers have such short tenures?

August 22, 2021
Sustainability

Thirty years ago, a widely repeated joke was that CIO — the abbreviation for Chief Information Officer — really meant “career is over.” But as job tenures lengthened and the role became more institutionalized, the joke lost its relevance. Now, however, the most unstable C-suite job may be the Chief Data Officer, or CDO. Tenures are short, turnover is high, and as in the early days of the CIO role, many companies don’t seem to know exactly what they want from its incumbents.

But the CDO job doesn’t have to be so unstable. We believe there are ways that its value can be made more apparent, and for benefits to be delivered quickly enough to prolong job tenures. A clearer definition of the role and a focus on business rather than technology can also help. Conversations with the relatively few long-tenured CDOs have provided valuable insights for newer incumbents.

A Growing but Tenuous Role
The growth of the CDO role in large firms has surged in recent years. In the 2021 NewVantage Partners survey of large, data-intensive firms, 65% said they had a chief data officer in place. That’s rapid growth from 2002, when the role was first established by Capital One, and much higher than the 12% of firms with a CDO in the NewVantage 2012 survey. Financial services firms took the lead in naming CDOs, but now organizations in other industries with substantial data, including retail, healthcare, and even government, have appointed them.

In general, this trend reflects a recognition that data is an important business asset that is worthy of management by a senior executive. It’s also an acknowledgement that data and technology — the latter usually managed by a CIO or Chief Technology Officer — are not the same and need different management approaches. But that’s only part of the story.

Both the data and our experience suggest that the CDO role is a tenuous one. The average tenure, according to a Gartner survey and our own analysis, is between two and two-and-a-half years. Few CDOs have been in the role for more than three years. While most CDOs are championed upon their arrival, the honeymoon often ends sharply at about the 18-month period, when they are held accountable for achieving major transformational change — a quick timeline, given that data transformation is typically a multi-year process at a minimum for large, legacy organizations. READ MORE

by Tom Davenport, Randy Bean, and Josh King

Source: hbr.org

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