When you think of a Chief Data Officer, do you think of Warren Buffett? I think this new role in organizations can learn a lot from Warren Buffett. I believe the CDO may become the most challenging role in the organization. Who better to learn from than Warren Buffett?
I have worked with over 35 CXO level executives at Berkshire Hathaway and its many different companies. So, I know the organization. They all knew how to use their data to grow their businesses successfully.
The Chief Data Officer seems to be the next CXO level role for many organizations. Depending on the organization, the position reports to the CEO, CIO and sometimes the CFO or COO. Sound confusing? It can be.
This Chief Data Officer role has been around for several years. Over 40% of Fortune 1000 companies have a person with these responsibilities. Many of these executives work in heavily regulated industries, including financial services, utilities, and healthcare.
Many estimates are that another 40% could add these leaders to their leadership team over the next several years. What qualities should these leaders possess?
I will be attending a The IBM Chief Data Officer Summit in Boston later this month. I hope to share what I learn from that conference in later blogs. Judging by my own clients’ early responses, it looks many of them want to know what qualities they should look for in this new rising leader. And you probably want to know why I think Warren Buffett might be able to shed new light on this role. It’s because I think Warren Buffett is an analytical visionary.
The first quality a Chief Data Officer must have is the ability to influence others with differing agendas. Warren Buffett works with many different business leaders, both inside and outside his organization. The CDO needs similar skills if they hope to excel in the position.
Warren Buffett also knows how to tell a good story. A really good story. It’s easy today, but back in the 1980s, before he became a household name he was known to be able to simplify complicated concepts to several simple stories. CDOs need this ability to influence others in many different medias. We will share more of Warren’s communication secrets in future blogs.
The second quality a Chief Data Officer must have is the ability to understand the business they are in. This is where it can get a little challenging. The CDO must be good at developing a strategic view of what the business look like in several years. They need a future view of the business powered by information.
Adding to the complexity is many people who have strong analytic skills lack the visionary capabilities to help provide a competitive advantage to their organizations. In the past, they didn’t see that as their role in the organization. They are paid to color inside the lines. How we use the data is going to help define what business we choose to be in. Your markets have many opportunities to grow your organization.
Warren Buffett chooses what markets his own businesses in. If he and Charlie Munger can’t understand the market, they go into the market. CDOs are not given that flexibility in their organizations today. This may change as organizations begin to choose the new opportunities they want to pursue. I believe successful Chief Data Officers will become identifiers of great future opportunities for their organizations.
The third quality a Chief Data Officer must have is the ability to manage risk and compliance elements for their data. This is a hard trend that’s not going away. Many of today’s CDOs are responsible for overseeing their data governance models and who has access to what information from across the organization. In many regulated businesses, the CDO has little flexibility in how they do this.
I believe one of Warren Buffett’s underestimated skills is understanding the competitive landscape and how it might be changing. Ram Charan recently pointed in his recent book The Attackers Advantage that Warren Buffett may be the best CEO at understanding how the economy works and how all the interrelated pieces work together. It’s a critical capability that has helped ensure his long-term investing success. Your Chief Data Officer should have similar capabilities.
The best CDOs are constantly curious about what is going on in their markets and customers’ markets. They bring this information to their teams when exploring new opportunities. They need to help others see new opportunities faster.
Another hard trend I see coming is how much more the government will be involved in what a business can do with their customers’ data. Financial service companies have been dealing with this issue for many years. Recent data breaches will ensure more complicated regulations are coming for almost every business.
The fourth quality a Chief Data Officer must have is the ability to see both the big idea and how to implement it effectively. Many data leaders are shortsighted in how they build an understanding of how their customers experience their organizations. When I was in Competitive Intelligence earlier in my career, I would infuriate my CEO clients because I would ask when was the last time they met with their customers and spent time with their front-line employees.
The best CDOs spend time with many different people to avoid data blindness. Data blindness is a disease that affects people who don’t want to deal with their customers and team members. Even today, I find this leadership disease at conferences I attend.
The final quality a Chief Data Officer must have is they must have managerial courage. Having spent many years working with senior level executives, it is hard to imagine that the CDO is always bringing good news to their leadership teams. Even the best communicators I know struggle delivering the bad news.
Warren Buffett taught his leaders he expects bad news and he expects to hear it from them first. His annual meetings and letters to stockholders have never avoided the difficult topics of when mistakes have been made.
An effective CDO must be willing to remind his fellow leadership team members when things could go wrong. They must also understand things will go wrong in this fast-changing world. This is a key challenge of effective leadership and management. We will share more on influencing others next week.
See you next week.