A. Charles Thomas, Chief Data Officer, Wells Fargo
How can CDOs change how the business thinks about data?
The ability to internalize business strategy, refine it with customer insights, and operationalize it through the use of data-driven techniques is really what defines a data-driven culture. Most organizations understand the need to get on board with Big Data, but they often focus too much on technology and fail to recognize that people are the real linchpin in cultivating a data-enabled, customer-centric business. Where CDOs and my team in particular can play a big role is in fostering “activist analysts,” individuals who are deeply skilled in the science and application of analytics and who bring an equally deep fluency in the ways of business.
Some CDOs feel like they’re stuck in a risk management role. What can they do to secure a seat at the table in terms of strategy-setting?
The CDO role can’t just be about managing risk. That’s not inspiring and people will lose interest. Even if you’re a great risk manager, what good is winning the game if no one is watching? The CDO team needs both offense and defense and that effort needs to be balanced 50:50. Those trying to grow their role could start by presenting risk data in strategic terms. Examine the opportunity cost of not pursuing a given data initiative, for instance. At Wells Fargo, we were able to go before senior management and say things like, “Every day we don’t do X, we lose $Y.” That gets attention. It was a big aha moment for all of us.
It sounds like our brains are over-simplifying things. What’s going on there?
It’s simply our brains’ way of being efficient. Our day-to-day encounters are full of noise. The person you’re talking to has to filter through that noise to get a signal on who you are and your intentions. In most cases, we cannot afford the time to analyze every nuance. We’re not going to work that hard because it’s sufficient simply to get the gist. Good communicators turn up the volume to send out the clearest signal they can about their intentions. And research shows the most important traits to signal are that we can be trusted and that we care.
It’s also important to be relevant. Got a Hadoop cluster? No one who writes a check cares. But if you can take cost out by taking action, now you’ve got the CFO interested. Focus on what is going to get people’s attention.
How do you see the role evolving?
There is a significant opportunity for CDOs to help their organizations understand how to retain customers and attract new ones. Wells Fargo is number one in the market when it comes to cross selling, for example, but the opportunity is much bigger. We can be much more effective. We have the ability to examine customer behavior along key journeys at a really fine level to learn more how customers engage and what their buying preferences are.
That marks a change. The CDO role used to be about tracking click through rates, and the number of calls, but then we realized, who cares about those individual data points? Now we sell our value in terms of business outcomes. Good CDOs are accountable not just for analytics, but for operationalizing insights. When interventions are operationalized and automated to scale – think 70 million times across billions of interactions – the results are truly game-changing.
How has your office used data to help the bank improve customer engagement?
We did a project where we examined customer data going back a number of years. As part of that effort, we created different customer profiles. That included a subset of individuals whose banking activity with Wells Fargo had declined. We called them “diminishers” and we wanted to understand why they had moved on and what we could have done as a bank to retain them. At the time, we had no way of knowing what customers had divorced the bank, so to speak. So we looked for behavior patterns to find out possible triggers. Data patterns might reveal, for instance, that a customer in their 20s had started to save more and pay down their credit card balance, indicators that might signal they were entering the housing market. Such insights can help us engage with that customer and partner with them in their journey. The ability to fine-tune the timing and relevance of our outreach like that is enormously powerful.
Advocating change requires a certain amount of diplomatic push-pull. How do you navigate that?
As the new kids on the block, some CDOs are reticent about pushing too hard, but positive pressure on colleagues can be a win-win, especially when you’re demonstrating how you’re going to relieve stressors from another department or function. CDOs can tactfully exert diplomatic pressure in a few ways. Sometimes it’s as simple as asking the right questions, like asking a CIO what they would do if they had more data resources. Are they happy with the insights they’re getting from their data? Do they need help creating more effective algorithms? And it works both ways. Be receptive when peers come to you.
CDOs can also partner with colleagues. CFOs exert quite a bit of influence, for instance, so ask the CFO to assign someone to certify the benefits of your work, then hitch your wagon to that horse. That can be very effective.
With the pace of digitization heating up, how can CDOs help their organizations move at speed?
Till and drop seeds where it’s fertile, not where there’s concrete. Focus on opportunities where you can quantify the expected ROI. Then, master the art of the prototype. Look at the assignment as you might a special ops problem. Throw a “tiger team” at it, a small group of six to eight people who are totally dedicated to the project. Run quick pilots and find a way to create measurable value as soon as possible. Then, instill courage to act on results. Don’t let pilots go on indefinitely. Instead, inspire the business to put those insights into play. At Wells Fargo, for example, for relatively little effort we generated significant value by executing with a smaller group. That created a certain amount of positive peer pressure. Other teams saw those results and wanted to top them.
What structure do you advise for the CDO?
Don’t make it about empire building. You need enough structure to put the right governance processes in place and enough support to enable analysts to do great things, but beyond that a formal federation offers more flexibility. Leverage the CDO team to do big, enterprise projects that cross multiple lines of business or functions or channels. This team can enable other parts of the business by providing trusted data, common tools, and helping ensure the analyst community has all the skills it needs to drive measurable impact to the business. Finally, we govern the data, tools, skillsets owned by other parts of the enterprise. Remember, a rising tide will lift all boats. CDOs don’t need to own all the boats.