Why Do Chief Data Officers Have Such Short Tenures?
The Chief Data Officer is arguably one of the most important roles at a company. It’s also a position that has become notoriously hard to stay in. The average tenure of CDOs is just two to two-and-a-half years. There are a few reasons for this. The role is relatively new, so companies are still trying to decide what they want from the person in this position. Many companies expect the impossible from their CDO. Finally, CDOs often have trouble selling their actual accomplishments to a business audience — they just don’t speak the language. But, it doesn’t have to be this way. One successful CDO imparted two pieces of advice: 1) Start with a clear connection to business strategy with tangible examples of how data analytics can drive business outcomes (topline, bottom line, cash, stewardship), and 2) lead with 1-2 forward thinking business partners to demonstrate what is possible. Those partners become the change agents across the organization.
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.
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.
Even in financial services, where the role is more common, there is high turnover in the CDO job. Over the past two years, for example, there have been CDO departures (and some new hires) at JPMorgan Chase, Wells Fargo, Goldman Sachs, American Express, AIG, Travelers, Nationwide, Charles Schwab, USAA, TD Bank, Bank of Montreal, MetLife, BNY Mellon, Freddie Mac, Prudential, TIAA, and Truist. Because they are in high demand, even CDOs who’ve left a company can usually get another job quickly. But most will encounter the same mix of high expectations and low ability to deliver value quickly at their next positions.
