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Analytics Leaders Reporting to the C-Suite

Analytics Leaders Reporting to the C-Suite

Organizations that are ready for a dedicated analytics team may struggle with determining the appropriate reporting level for the team within the organization.  The rise of the Chief Analytics Officer (CAO) clearly shows that some organizations want this position to report directly to the top. Using other titles, such as Vice President or Director, may allow the analytics leader to be embedded in an existing hierarchy, such as IT, Strategy, Marketing or Finance. Other times, having an Analytics Officer reporting within a business unit might be the appropriate place to start until the group grows large enough to justify more exposure.

I believe that determining where the analytics leader belongs is like figuring out a jigsaw puzzle, where every piece has to fit just right.  So, how do you determine what level in the organization the analytics leader should hold and what considerations should come into play?

First, consider the stage of your organization’s analytics maturity, the specific leaders in the organization and their appetite to support analytics.  Also identify what your organization is hoping to achieve with this new group – is it to increase visibility for analytics work, illustrate the importance of this work to the company’s future, consolidate resources across the organization, or advance the organization’s capabilities?  These are all critical pieces to the organization’s puzzle that require your careful consideration.

While there is never one perfect way to organize your analytics talent, I have found that most analytics leaders recommend establishing the analytics deparatment as part of the C-Suite with direct reporting to the CEO or President.   There can be some clear advantages and disadvantages to this approach. Here are some points to consider.

Advantages of Having the Analytics Leader in the C-Suite

  1. It creates a direct line of communication to leadership which can allow analytics to be included in strategic discussions, share progress and roadblocks, and provide support for the entire organization.
  2. It creates greater visibility for the analytics work since there is a more direct line to the board of directors or owners.
  3. The CEO has greater authority and control to make strategic decisions to execute and overcome roadblocks as they occur.
  4. It could reduce some layers of management (if the analytics leader previously reported to another C-suite position), which could allow more direct access to leadership and create a flatter organizational structure.
  5. There is more flexibility for analytics to support all areas of the organization instead of directing analytics support to the areas with the largest budgets.

Disadvantages of Having the Analytics Leader in the C-Suite

  1. The increased costs of the chief officer positions.  There is an expectation that if you label the position as “Chief” or “VP”, and it reports to the same leader as others with that title, the compensation will be similar.
  2. It divides the leadership team. For example, a team of 7 would become a team of 8, which may not sound significant, but it means one more team player, another empire that could be built, and another leader to weigh in on all decisions.
  3. If the bulk of the analytics work is done in one division, it may create duplicate work, tension, or misalignment with the chiefs in other departments for the non-analytics work.
  4. It does not allow for natural scaling and piloting. The pressure increases to produce big and immediate results, and the growth can be less organic. This can create more work on the back-end from a change management standpoint to get the adoption of the analytics products at a level where the value is actually created.
  5. It can cause an even greater disconnect between the analytics team and the data team.  Coordination between these two teams is essential, regardless of reporting structure. Creating a new organization that is outside of the existing group can cause more competition than collaboration as everyone tries to show their worth.

If your analytics leader reports to a C-Suite leader (CIO, CMO, CFO, COO) instead of directly to the CEO or President, it may keep the analytics leader from participating in strategic discussions and weighing-in on decisions concerning data and the value realized from it. It also may keep your company from taking full advantage of the resources the new analytics group can offer. However, establishing the analytics function outside of the C-Suite can be the right move as your organization begins to sharpen its focus on analytics and drive progress in the organization.

I believe the best place to house the analytics organization and its leader is where they will be most successful, where they will best connect with the other pieces of the organization’s puzzle. When first launching an analytics team, reporting to the CEO directly, or reporting to the CIO of VP in charge of strategy, is often the best choice. The political dynamics, the appetite for all leaders to add this organization, and the skill sets of the existing C-Suite all are considerations when making a final decision. Ultimately, no matter where the position officially reports, it’s the person that fills the position who will determine its value.

January 1, 2019

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