Data and Analytics

The Data and Analytics Leader:

Your Competitive Advantage
The corporate world is undergoing monumental change.
Commerce is more competitive and global than ever
and businesses need to pursue every advantage to win
customers, optimize operations, and build new products
and services. Strategy cycle times of three to five years
have shrunk to just 12-18 months. The pace of change
means that long-range planning is increasingly difficult
— and risky.

Leaders must draw upon everything they know to point an

enterprise in the right direction — and to react quickly and
nimbly when assumptions change. This new approach is as
fundamental as it is radical. It is based on one deceptively
simple question: what does the data tell us to do?

Organizations have always used data to help inform

decisions, of course. Every board pack contains data in the
form of market analysis or customer insight, but the scale
of impact and depth of analysis is increasing exponentially.

The availability and value of data now extends beyond

the C-suite into the hands of managers and workers
who are using data routinely to drive better experiences
for customers and increase opportunities for sales. But
how effective those teams are will largely depend on the
quality of data and analytics leadership in the organization.
Over the past five years, Spencer Stuart has seen a 320%
increase in hiring activity in the data and analytics domain,
with no sign of the demand for talent decreasing.
Lessons from the great early adopters
The current trend towards data-oriented business models is founded in part
on the success of early adopters. Amazon, for example, is famously data-
driven; few decisions are made without the supporting page of
evidence-based customer insight. And in part the shift is driven too by the
ubiquity of tools for processing vast amounts of data in novel ways. The
combination of cloud computing and the open source movement has put
astonishingly powerful and inexpensive toolkits in the hands of businesses,
allowing broad adoption and cost-effective experimentation.

Other factors propel the trend even further and faster. Customer expectations
are driving momentum for change. GenZ and millennials are happy to share
their data, provided they receive benefits in the form of personalized offers,
tailored products and more — something organizations can achieve only by
using all of the data they have on customers and products in near-real time.

Facebook, Google, Amazon, Uber, Stitch Fix, Airbnb and others have paved
the way for this new data use paradigm, building a variety of business
models driven by the latent value of data assets. Companies including
Netflix, Salesforce, and Workday have retooled their existing entertainment,
software and services businesses, daring not just to invest in the trend, but
also to completely overhaul their business models and re-architect their
platforms around the value of data.

Catch-up means some pain, all gain

However, not every business is in a position easily to re-invent itself. Digital
natives are a step ahead on data because they have already architected their
systems with access to the data. Traditional businesses face the extreme
change management challenge of playing catch-up during a period of revo-
lutionary transition: each process and decision-making mechanism will
change and each employee will have to relearn how to do their job.
Businesses trying to catch up will need to:

»» acquire new math and engineering skill sets

»» open up and normalize using data assets to enable
business decisions
»» create an agile IT organization to move more quickly
»» transform their culture with a greater orientation towards
learning, flexibility, and agility in order to create better
products and services for customers.

Attempting to put in place even one of these elements in isolation requires

significant effort; doing so in parallel is enormously difficult, but it is essential.

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The Data and Analytics Leader: Your Competitive Advantage

A new kind of leader

Companies have struggled to navigate these changes without the vision and
orchestration of leaders with enterprise-wide reach and direct influence on
corporate strategy.

While there are differences in the strategic value and utilization of data
across and within industries and sectors, there are almost no examples of
success stories where delivering a modern data and analytics agenda is
treated as an isolated experiment outside the core business. In the coming
decade, the winners will be those businesses that fully embrace a spirit of
data-driven experimentation in a way that permeates all elements, from
product development, sales/marketing, and the customer experience, to the
supply chain and employee development.

Every employee must embrace and take ownership of the transition into a
data culture, but to achieve lasting success in this transformation there
must be visionary leadership and strong coordination from the center.
Without it, companies may invest and even make short-term progress, but
in the long run are likely to fall even further behind. This is because they will
generate more complexity through a tidal wave of half-baked one-off experi-
ments, technologies, and standards.

The challenge of finding an exceptional chief data and analytics officer

begins with buy-in at the board and the C-suite level, alongside the creation
of an organizational and reporting structure that will set the new leader up
for success.

Non-linear is the new normal

Candidates with experience of several disciplines will be preferred because
the change journey demands someone with a nuanced understanding of
strategy, mathematics and engineering, in addition to outstanding leader-
ship qualities.

We speak with many engineers who studied math in college, or MBAs who
have learned how to code at the leading edge of data/analytics. The most
compelling career trajectories tend to be non-linear, involving a shift across
industries and time spent in different functions such as risk, technology, oper-
ations, or marketing. Such candidates have learned to apply analytics-driven
insights to a variety of different business problems and have experimented
with a range of different tools and technologies to improve results.

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The Data and Analytics Leader: Your Competitive Advantage

data and analytics leadership:

how to avoid the pitfalls
There are a number of successful paths to data transformation, but there are also many
obvious pitfalls. Many companies try the low-risk option and fail, dipping a toe in the
water rather than fully embracing the imperative of creating a data-driven business. This
plays out in the following scenarios:

DON'T PRIORITIZE HIRiNG A VISIONARY DATA SCIENTIST

into the top role
While it is possible that a candidate at the forefront of technical proficiency will also have
great strategy and leadership talents, this combination of skills is actually quite rare. Our
experience is that without the leadership gravitas or experience to drive organizational
change through others, the subject matter expert is likely to do little more than tinker on
the margins, working alongside a small team of data scientists and engineers and point-
ing to the delivery of a new recommendation engine or some other gizmo as proof of
success. Short-term gains in this scenario are common (often seen in marketing,
customer service, or e-commerce verticals), but such gains tend to be hard to scale or
sustain. Indeed, they may become just another one-off solution or tool that someone has
to support, adding to the organizational gridlock. Your top leader needs to have domain
depth, but not on the leading edge.

Don’t put the role too far down the organization

We sometimes see the data and analytics leader not being given access to strategy devel-
opment and the broader change management agenda. This is often seen when the leader
concerned is attached to technology, marketing, finance, or risk functions. Instead of
being given a remit that spans business units, their access and influence is limited to the
functional area to which they are most closely aligned. As a result, their vision and the
message they wish to carry gets diluted by more senior leaders with bigger priorities
concerning the corporate strategy and change management agenda.

DON'T APPOINT A GENERALIST WHO LACKS DATA & ANALYTICS

DOMAIN EXPERTISE INTO THE ROLE
Companies often lack the math and engineering skills to deliver a modern data and
analytics platform. Appointing an internal executive to lead the function who does not
fully understand data and analytics can make it difficult to attract talent from the outside.
Even if it is possible to recruit the right talent, a completely naïve leader may lack the
vision and awareness to capitalize on the skills available. Compared with Google or
Amazon, both of which employ a large number of digital natives with math and engineer-
ing PhDs, most companies have a preponderance of people with marketing and business
degrees in roles aligned to data and analytics. Your leader needs to understand the funda-
mentals of new skill sets and capabilities enough to recruit and harness new talent.

Spencer Stuart page 4

The Data and Analytics Leader: Your Competitive Advantage

Four requirements of a top data and analytics leader

1
We have identified the four most important tasks for chief data and analytics officers and the
qualities they will need to possess if they are to excel as leaders and deliver lasting impact.

Build bridges across the C-suite and the entire organization

Regardless of where the chief data and analytics officer reports in the orga-
nization, they need to be a strategic asset owner, capable of setting a vision
and delivering on it. The best strategic ideas, however, come from business
partners who best understand the problems that they face in their markets
or functions.

The best data-driven companies have figured out that the value of data
increases in proportion to how freely and efficiently it can travel across tradi-
tional organizational silos. To smooth this path, companies require leaders who can connect
strategic ideas from different parts of the business and thereby free up the movement of informa-
tion and ideas.

Talent implications: Look for a leader who can demonstrate that he or she has worked across
silos to resolve disputes — someone who does not seek the limelight but rather prefers to share
ownership of solutions and celebrate with the team, excited when business partners begin to take
ownership for themselves. Such a person must also be a clear communicator, capable of simpli-

2
fying complex concepts and of connecting with the leadership team; both a leader of people and
a change agent.

Architect for business value

Companies in search of a chief data officer often describe the challenge of
deciding between a less technical leader who understands the business and a
brilliant data scientist who has trouble articulating business value. Spencer
Stuart’s experience is that companies are better off hiring someone in the
middle ground. In order to set the company’s data strategy and evaluate the
potential value and risk of data assets, tools, and services, this leader needs to
have both a deep understanding of the domain as well as an ability to struc-
ture enterprise business cases — however, he or she will rarely be the best
data scientist or business analyst at the company. Data management and technology investments
must be based on use cases and rigorous cost-benefit analysis. Use cases and new business oppor-
tunities should be prioritized according to their potential to deliver value, but these opportunities
are impossible to evaluate without a certain depth of understanding in the domain.

Talent implications: Outstanding data and analytics leaders are able to see both practical busi-
ness problems and elegant mathematical or technical designs, and to connect the dots between
them. Look for someone who demonstrates a steady business focus but who also works with the
best engineers to understand the underlying technology well enough, allowing them to make
informed decisions and to influence IT architecture.

Spencer Stuart page 5

3
The Data and Analytics Leader: Your Competitive Advantage

Build a multi-disciplinary team

Many leaders have a tendency to build teams in their own image. But today’s
data leader must be able to attract and evaluate a range of employee skill
sets, including business analysts, quants, engineers, designers, governance
and control leaders, and program managers. Moreover, that leader needs to
be able to motivate these diverse groups to collaborate fluidly, prioritize
complicated tasks, and integrate seamlessly with business partners.

Talent implications: Seek out someone who is eager to find new sources of talent, and is capable
of building partnerships with universities and startups; someone who is thoughtful about how

4
best to motivate and retain employees, for example through development programs and ensur-
ing that colleagues are exposed to different parts of the business and relevant external groups.

Transform the organizational culture

The best data leaders tell us that building platforms and data models is the
easy part of the data science journey — the harder part is changing human
behavior. In order to derive real value from data, there has to be a shift in
organizational culture. To achieve the necessary cultural change, the organi-
zation (led by the executive team) must value learning and intellectual
curiosity, talk about failures, share lessons learned, and encourage an atti-
tude of “test and learn”. Individuals need to be willing to change the way
they behave, interact, and make decisions.

All organizations encounter problems as they start paying attention to data, and retraining is
unavoidable. The best data leaders can lead systemic change, helping redirect instinctive behav-
iors and decision-making habits through engagement and by empowering people at all levels of
the business.

Talent implications: The challenges of cultural leadership depend on context. Start with a thor-
ough assessment of the company’s existing culture and be clear about what the desired culture
needs to be. This way it is possible to assess senior executives for the most appropriate styles
and approaches that will resonate in the business.

Look out for a leader who is intellectually curious and learning-oriented; someone who can help
the organization navigate awkward or vulnerable stages of the data journey, who is comfortable
with and can even celebrate “strategic failures”, and who can be the catalyst for behavioral and
culture change.

Spencer Stuart page 6

The Data and Analytics Leader: Your Competitive Advantage

growing demand for data & analytics leaders

Over the past five years, the number of data &
analytics leaders we have placed into organiza- Figure 1: Data & Analytics Leadership
tions has increased four-fold (see figure 1). Placement Increase by Region 2013 to 2018

Financial services companies were the first to #3x #10x

North Europe
identify the need for data & analytics officers, America

although there has been a significant rise in

demand among technology, communications and
media (TMT) companies. There are also clear
indications that healthcare, consumer, industrial,
education and non-profit organizations are build-
ing their data & analytics functions and seeking
LATAM APAC
new leadership talent in this area (see figure 2).
stable #1.5x

Figure 2: Data & Analytics Leadership Placements by Industry 2008 to 2018

2018
#9x 2013
#12x 2008
#6x
#2x
Healthcare TMT Financial Services Consumer Goods Industrial Education, Non-Profit
& Services & Government

CONCLUSION
In order to unlock the hidden value in data and produce insights that will reduce customer pain
points and grow profits, organizations must prioritize agile development and adopt the mantra
of “test and learn”. However, agile technology development doesn’t work unless everyone is test-
ing and learning together in a coordinated way. Isolated agile development groups either build
things that don’t work efficiently with existing business processes and systems or, worse still,
solve problems that nobody needed to fix.

Organizations have to be willing to take measured risks, including appointing a leader who will
develop and orchestrate this new capability on behalf of the executive team and with their full
support. Having a central leader doesn’t have to be a huge expense. The top talent is expensive,
but such leaders won’t need huge teams to build momentum. Many of the tools and platforms
necessary to pilot approaches are either free or easy to test-drive and concrete ROI potential can
be demonstrated before major financial investments are made.

Spencer Stuart page 7

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