Do You Need a “Floating” Chief Analytics Officer?

In November 2013, 298 LinkedIn members listed their title as “chief analytics officer.” (CAO). This week, I found 442 members. While the numbers are low, that’s an increase of nearly 50% in less than two years.

The original statistic comes from a whitepaper (Do you need a Chief Analytics Officer) I wrote with several colleagues, in which we observed:

CAOs are champions for the need to generate value from data. CAOs often embody organizational change, challenging the way business problems are solved as well as who should be responsible for identifying new opportunities.

Many firms simply rely on a chief technology officer (CTO) or chief information officer (CIO), but neither has the time to actively use data to solve pressing business issues. To further confuse matters, some organizations use the term chief data officer (CDO) interchangeably with CAO.

The best CAOs don’t come from a pure data and IT background; they are business professionals who are commercially focused with a deep logical mindset (e.g. Math, Chemistry, Statistics, Physics, Engineering). They understand data and value it well enough to drive decisions. Beyond data, there are other factors to consider, such as the ability to comprehend what matters most to a business unit, an organization’s strategy, or to a segment of customers.

The best CAOs don’t come from a data background; they are business professionals who have an interest in data and understand it well enough to drive data decisions. Beyond data, there are other factors to consider, such as the ability to comprehend what matters most to a business unit or to a segment of customers.

But there’s a problem. Many organizations don’t have the means to justify a full time CAO. Some are simply too small to afford a top-notch person. Others - such as a bank or insurer - are not innovative & agile enough to warrant the full time efforts of a truly talented CAO.

A floating CAO solves both these problems.

By engaging such a person, say, two days a week, you lower the costs. You can leverage his or her insights without paying a full time salary.

You also give your organization a means to attract top talent, with all the benefits that brings. Top talent attracts others with similar abilities. For example, many talented young professionals would be more likely to join a mid-tier bank if they had the opportunity to learn from an insightful CAO.

Floating or not, a CAO should be a champion for change change agent. These are people whose sole role is to unearth ways to change the status quo. They are obsessed with customer outcomes and drive better ways to serve engage customers and to perform critical functions better.

We exist in a world that is migrating from management by gut feelings to an increasingly granular view of what actually works, and why, and how. Every interaction through a digital device connected channel generates data that can be leveraged to make better decisions. But the volume of this data can be overwhelming, and the only way to transform it into valuable insights is to start with an understanding of vital business issues.

Competitive prices, faster delivery, or better advice aren't enough anymore. Granularization and data flow will become increasingly important. To compete effectively, your company will need to quickly zoom across streams and siloes of yet to be connected information. It is the skill of a true CAO to get value in such common circumstances.

You will need to have all these in addition to a quantifiable and qualified understanding of what each customer needs and wants. Just as importantly, you need to understand when they should be engaged.

By creating a floating role for a CAO, you effectively speed up the moment at which your organization can pursue such opportunities. Instead of waiting until 2017 or 2018 to plan, search, test, and hire a full-time CAO, you can bring one in now with far less risk.

Special thanks to the following professionals who provided insights and/or feedback for this article: Lionel Lopez, chief data officer at Veda Advantage in Australia; Alan Grogan, chief data officer of Helioserv and ex-CAO of the Corporate Bank of the Royal Bank of Scotland; Antony Ugono, head of analytics at SEEK, Australia; Pamela Bonifay Peele Ph.D., chief analytics officer at UPMC Insurance Services.

Chami Akmeemana is a consultant, executive recruiter, and entrepreneur in the analytics field.

Image: r2hox/Flickr