Data literacy: Five reasons CDOs must lead with it

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Turning business data into business value is not as straightforward or clear as it appears on paper. But those who don’t will lag further behind their competition – potentially waking up to the fact that they are on the back foot when it is already too late. The effective chief digital officer (CDO) already focuses on deploying technologies like master data management (MDM) and data virtualisation to derive value. But there is another area where companies must learn to lead – the people aspect of the data value chain. 
When homing in on people’s impact in the data value chain, the business must address the question of how data literate people are. As noted by IDC, “Higher levels of data literacy have a significant impact on business metrics. IDC’s 2021 Future of Intelligence Survey showed that almost 2X as many organizations that reported the highest data literacy saw improvements in revenue compared with organizations with the lowest data literacy.” Regardless of the quality of data management solutions, data efforts will fail if your people don’t even have basic data literacy skills. Why? Because your data teams will not be able to extract the real value from enterprise data as the data itself will be inferior or not used. It goes without saying that if an organisation wants to unlock the value of its data, then its people need to know how to use it for decision-making.
Defining data literacy
If you search for definitions of data literacy, you’ll find many variations on a theme, but common elements include the capacity to read, write and communicate using data in context. 
Within its definition, it refers to the fact that a data-literate worker has a grasp on how data sources and constructs work, including the analytical methods and techniques that one can use on data, and can describe the use case, application, and resulting value of working with data. 
What is key in all of this is that not every user needs to be a data expert. They don’t all need to have an in-depth understanding of sources, constructs, and analytical models. They do need a healthy dose of critical thinking and an account of the business’s goals. When this is in place, they can refer to the data served to them through reports and dashboards and can question, read, understand, and then apply this data to areas of the business where it adds value.
The role of the data leader in all of this is to ensure that users are data literate enough to use data for decisioning. It’s only when users put data to work that they can play a role in an organisation’s journey to data value and use data to define better business outcomes. 
The data value chain
There are several defined roles in the data value chain. Typically, those who work in a capacity where they create and collect data, manage and govern data, and refine and prepare data are deemed to be technical resources. Think data engineers, data analysts, and data managers. 
On the other hand, we have those who analyse, explore and generate insights and those who automate and act on insights. Business users and data consumers typically hold these roles and, to a lesser degree, technical teams. While it is safe to assume that technical data teams already have a good grasp on data, the business users and data consumers benefit the most from being data literate. 
CDO sponsorship and leadership
It has been proven that those data projects with executive sponsorship stand a better chance at success than those that don’t have leadership backing. According to MIT Sloan Management Review research, “… having executive sponsors who are actively engaged is the leading factor in project success.” 
The role of the CDO in driving data literacy initiatives is paramount if an enterprise is to meet its goals, and it’s only through CDO leadership that it can ensure data literacy initiatives aren’t siloed.
So, what are the five reasons why data literacy is value-vital, and where and how can CDOs lead:
Organisation-wide efficiency – When an organisation has more data-literate business users with governed access to data, data teams can democratise self-service insights and buy back value time for analysts and data scientists.
More contributors unlocking data value – With more data literacy amongst employees, organisations benefit from better data monetisation efforts, whether direct or indirect.
More capacity across the organisation – A culture built on data literacy is a capacity-builder ensuring more employees contribute to problem-solving.
More satisfaction – The numbers don’t lie, and research shows that empowered people make positive, high-impact contributions and report better job satisfaction. Happy employees also ensure that customers have positive experiences.
More competitive advantage – An enterprise is immediately positioned to get ahead of competitors when they enable data-driven value, efficiency, capacity, and satisfaction.
Data literacy at Koch Industries
But where has this worked, and how can we prove the effectiveness of data literacy? One such example can be found at Koch Industries, an “enterprise of enterprises.” Koch is organised so that every internal business unit manages its approach to data and IT guided by a set of principles central to Koch Industries. Within this are two principles that need a high degree of data literacy to be successful. The company clearly understands that because of the rate of change in the business, it must rely on knowledge-based transformation to survive and thrive. It achieves this through “knowledge networks” within each area of business.
It’s Koch Industries’ focus on data literacy, and its adoption of a centralised approach to metadata management and governance, that is central to its success. The company established early on that its data value chain needed to be supported by a data-literate people and unified platform if it was to democratise insights. Now it uses data as the fuel for its transformation efforts by ensuring it is accessible by the right systems, processes, and people at the right time. 
Further, Koch’s adoption of a hybrid MDM model—one that supports multiple systems not confined to prebuilt data models or attached to its ERP systems—allows it to support all-encompassing data governance, data lineage and a data catalogue. This practical application of data management technologies and support for data literacy has placed Koch Industries in the enviable position where it has democratised being data-driven. Every employee can “Seek and acquire the best knowledge from any and all sources that will enable you to innovate and improve results.”
Lead in data literacy, or lag behind
Many CDOs fall into the trap of focusing predominantly on the technologies and processes required to turn data into a competitive advantage, missing the opportunity to use their leadership position to drive data literacy. When CDO leadership drives data literacy training, internal certifications, and centres of excellence, a business can genuinely extend the value of data across the entire organisation. The results? Better decision-making, happy people, and a healthy bottom line. 

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Lori Witzel

Lori Witzel, Director of Research for Analytics and Data Management, TIBCO Software

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