The right home

As I have said, the most successful advanced analytics teams are creative groups staffed with talented, motivated, curious people who can convert business discussions with subject matter experts into analytical applications and solutions that can drive operational change on a daily basis. The analytical teams that realize the most success have wide-ranging mandates to drive practical and pragmatic change resulting in competitive advantage.

Where in the organization are the senior executives whose mandates encompass this arena?

The best organizational home for the advanced analytics team is reporting directly to either the Chief Operating Officer (COO) or the Chief Executive Officer (CEO).

If a COO exists, it would be rare to see this group under the CEO, unless the CEO is younger, ambitious, and engaged. Recently, there have been a handful of Chief Analytics Officer (CAO) appointments reporting to the CEO. This is typically a move to illustrate where the CEO wants to place emphasis. It will be interesting to see how long this type of reporting relationship remains in place, before evolving into a new form and structure.

Working directly for the CEO can work, and it is one of the optimal reporting structures for the CAO and the advanced analytics teams, but it is often difficult to gain time with the CEO to ensure alignment and focus. To be clear, reporting to the CEO is the best direct reporting relationship the CAO can, and would, want to have, and if the CEO prioritizes the relationship with the CAO and publicly funds and supports the mission of the advanced analytics team, then this is the best possible organizational structure.

Having the CAO report to the COO is the next best reporting structure to have in place. The COO has the corporate functions under their control, and can direct the functions to collaborate with the CAO and the advanced analytics team to examine processes, data, and more to drive innovation and change.

Continuing down the senior management structure, the third best place for the CAO to report is to the Executive Vice President of Business Development and Strategy. This role typically owns mergers and acquisitions, strategy, and corporate development. Therefore, the mission to drive innovation typically resides in this group. Given the amount of change that the CAO and the advanced analytics team will drive, they need to be reporting to a corporate change agent with the organizational power to direct the functional groups to engage and collaborate.

We've discussed the implications of having a CAO and an advanced analytics team, and we have talked about appropriate environments in which such a team and leadership might thrive. This brings us to the final section of this chapter. As we conclude our exploration of the operating context for, and overview of, analytical teams, we need to discuss the topic of ethics.