Capital One was the first company to ever hire a Chief Data Officer in 2002. Back then, many of the first businesses to appoint CDOs were financial institutions, partly because of increasing federal regulations that mandated stricter data governance protocols. Today, large companies in the insurance and banking industries are still the ones most likely to have chief data officers but the executive role has spread beyond those sectors. A 2021 study by PwC revealed that 21 percent of the top 2,500 largest publicly listed companies worldwide have a CDO, and almost half of those positions were filled in 2019 and 2020 alone. The number of hires for chief data officers has exploded by about 50 percent each year since 2016.
This makes sense if you think about how much data science and analytics have become a cornerstone of many aspects of our lives. The commercial real estate industry, as well, is starting to ramp up its use of data science and with it we are seeing the appointment of more chief data officers. JLL hired Yao Morin as CDO of JLL Technologies in June 2020, making her responsible for leading the firm’s global data strategy, product roadmap, and delivery. Yishai Lerner, co-chief executive officer at JLL Technologies, said at the time that “a comprehensive data strategy is key to JLL’s ambitions.”
Other prominent commercial real estate brokerages, such as Cushman & Wakefield and CBRE, have also appointed chief data officers. One of the main reasons they’re doing so is because the commercial real estate industry generates a massive amount of data that needs to be organized, analyzed, and secured. Morin, the CDO at JLL Technologies, told me that many real estate firms only recently started to consider how to leverage their property data, everything from leasing agreements to building occupancy rates. “The CDO role is more crucial than ever before,” Morin said. “Real estate firms have realized the need for someone in a leadership role to manage all this incoming information and guide their organizations through the process of turning data into value.”
Everything in its right place
Originally, data officers played more so-called “defense” than “offense.” The role focused primarily on data security, governance, regulations, and fraud protection, and it mainly attracted professionals with a technical or legal background. More recently, CDOs are going on the offense, so to speak, finding ways to derive value from the data and generate revenue from it. Of course, the reality is chief data officers today must do both, focusing on a wide range of areas, and the same holds true in the commercial real estate industry. For example, data security and privacy are top of mind for customers and business leaders right now, and it’s getting more complex. Increasingly stringent data security and privacy regulations, such as the European Union’s GDPR and California’s CCPA, and an ongoing rise in cybercrime are the main reasons. Real estate firms like JLL have dedicated teams handling data security, ensuring they comply with data privacy laws across various countries.
The chief data officer role extends beyond data privacy and security. The title shares the same abbreviation as a chief digital officer, but they’re not the same job. Data officers determine what types of information companies choose to capture, retain, and use and for what purposes. Chief digital officers are responsible for the information systems where the data is stored and processed. The data officers’ goal is to connect the collection and analysis of data with business results.
Since the data officer role is so new in many organizations, especially in real estate, it’s evolving and can be nebulous. About 72 percent of C-Suite executives say the role is unsettled, and less than a third of execs describe the role as successful or established, according to a survey by NewVantage Partners. It’s estimated that the average tenure of a CDO is only around two and a half years, so most companies haven’t had much time to establish a clear vision for it. For the most part, real estate firms and other businesses know the need for the role, but the execution is another thing entirely.
Many organizations may also build their business on data, but that doesn’t mean they’re managing it well. This is the case for most real estate firms, which have always relied on a plethora of information and data but still may not harness it and make it actionable. The chief data officer then becomes a key position for organizing and maximizing the value of data collected. In real estate organizations, CDOs like Morin at JLL Technologies are answering questions like what data is useful and how data can provide actionable and strategic insights. “Every day that a real estate firm doesn’t have a CDO, they’re falling further behind others in the industry who are turning data into a competitive advantage,” Morin said. “Data can be viewed as a rich resource like oil, but it requires a CDO to refine it and produce assets.”
Before joining JLL, Morin worked as chief data officer at companies like StubHub and Intuit. Her role at JLL is the first time she’s worked in the real estate industry, but she said she’s found many similarities with prior roles. What she’s found most different in real estate is the variety of data needed is much broader, and most of it is manually generated. JLL doesn’t just need data about buildings, they need data about the surrounding areas, the people inside buildings, and what people are doing inside them. She said this manually cultivated data is more challenging to collect and analyze than at a firm like StubHub.
Morin’s most significant recent breakthrough in her role so far was helping JLL ensure all company data was organized in one place. This may sound mundane to some, but that’s a major innovation in the real estate industry, where data is typically siloed in an untold number of spreadsheets. JLL created an accessible, traceable platform from all the data sources it collects that anyone at the company can use. This puts JLL in the position of having a comprehensive and organized data source in the commercial real estate space, enabling it to function as a unified organization and giving its clients sharper market insights. It’s a huge competitive advantage and one that was made possible by the hiring of a chief data officer.
Overseeing the data factory
Cushman & Wakefield is another commercial real estate brokerage that has recently appointed a Chief Data Officer. The company hired Payman Sadegh as its inaugural CDO in August 2022. Like other real estate firms that have grown through acquisition, Cushman’s data has historically been fragmented. M&A activity has led to combined workforces, cultures, and technology systems to create a leading global real estate firm, but it also means valuable data has been scattered throughout an organization of 50,000 employees.
One of Sadegh’s primary responsibilities as chief data officer has been to bring together the fragmented data into a comprehensive suite of analytics, like what JLL has accomplished. Sadegh also never worked in the real estate industry before joining Cushman and Wakefield last summer, but he told me data management and analytics principles are often industry agnostic. “What changes across industries is the focus and the aspects of data management and analytics that are of the greatest importance,” he said.
Chief data officer roles have grown in complexity and scale over the years, making the job exciting but daunting. Along with gleaning insights from data, organizing it, and ensuring it’s trustworthy and error-free, CDOs at real estate firms will have to keep an eye on incorporating emerging technologies like artificial intelligence, machine learning, and more sophisticated ways to automate data collection and processing. Many emerging technologies may not be advanced enough for broad adoption now but could become the norm in the industry sooner than we may think. This includes conducting real estate transactions on the blockchain and the adoption of metaverse tech. Should these technologies become more widespread, chief data officers and their real estate firms will need to adapt their data collection and management practices accordingly.
For now, the role of chief data officers at real estate firms like JLL and Cushman & Wakefield will be to view the data collection and processing from a big-picture level and ensure they can glean insights that are valuable to the companies and their clients. Data operations at most prominent corporations today are, ideally, like factories. The data continuously enters one side, progresses through several steps, and then exits in the form of reports and insights. CDOs are managers of these data factories, including the creation of new analytics, and they must keep an eye on the essential metrics of the analytics cycle and analytics errors.
The analytics cycle is the time required from a request for data to the final delivery of the reports and insights. Major real estate firms like JLL strive for the shortest analytics cycles to get information quickly enough to respond to competitive opportunities. But short analytics cycles mean nothing if the data is full of errors. Errors erode trust in the data team and pull engineers and CDOs away from new projects, further impacting the analytics cycle. These processes are part of the reason why more real estate firms are creating chief data officer roles to handle the vast sums of data they collect.
Big data is making enormous changes to how we work and can provide value to real estate firms if managed correctly. The trend of more companies outside of insurance and finance hiring chief data officers has extended to commercial real estate, and some of the biggest brokerages in the world are appointing CDOs. Having someone in the data officer role can become a significant competitive advantage for a real estate firm, as companies like JLL put valuable data in one place to make it that much more actionable. The first-ever chief data officer was hired at the financial institution Capital One in 2002, but this growing executive role is just as important in commercial real estate companies today.