According to the Harvard Business Review, all the way back in 2007, the role of the Chief Strategy Officer was just starting to surge, with many CEOs of the biggest multi-nationals passing down responsibility for strategy to c-suite execs in this relatively new role.
These strategy leadership roles, certainly back in 2007, were very much the domain of the large, blue-chips multinationals, but in today’s business landscape Strategy Leaders are increasingly appearing in ambitious organizations of all sizes. But what exactly does the role entail, what is a CSO responsible for and why is the role becoming more prevalent in businesses across the spectrum? What difference does a CSO make to a business?
Lets consider…
What is a Chief Strategy Officer?
CSOs – sometimes known as Chief Strategists – or indeed VPs of Strategy, VPs of Strategic Development, Strategy Directors etc, are c-suite, or leadership team executives who’s focus is squarely on the company or corporate strategy. They are leaders at the highest level of an organization, typically reporting into the CEO, whose primary responsibility is to spearhead the successful formulation, communication and execution of the business’ strategy.
What are the key areas of responsibility for CSOs?
Simply put, a CSO is responsible for developing, communicating and executing the company strategy. But of course, there is nothing simple about achieving all of that.
To be more specific, the responsibilities and objectives of a Chief Strategy Officer typically involve the following…
Formulate the strategy for the business
It is the job of the CSO to work with the CEO, leadership team and board of directors to develop the vision and strategy for the organization. It is the job of the CSO to produce a comprehensive strategic plan to facilitate its execution.
Communicate the strategy
Once the strategy has been developed, the CSO must ensure proper communication across the business to ensure all stakeholders – especially those who will be important to the execution – know the strategy and strategic priorities. They must also ensure that the plan is communicated clearly so everyone understands and remembers the strategy.
Secure buy-in
It’s not enough to just communicate the strategy to people so they know and understand it, a successful CSO will also ensure people in the business believe in it too. Winning buy-in for the strategy is important to the execution and the CSO will need to enthuse the teams, demonstrate the importance and promote a motivating vision for the future. They must secure people’s willing commitment to the strategic plan.
Maintain momentum
Once the execution has begun, the CSO will be responsible for the ongoing communication of the strategy to keep the plan front and center in everyone’s minds. They will have to undertake careful tracking of progress and identify any risks that could slow results. They must ensure strategic tasks are being prioritized correctly and there’s ownership and accountability to drive progress.
Observe and respond to market changes
The CSO must critically analyze the market, competitor performance alongside the performance of their business, it’s product lines and market share. This knowledge must inform the ongoing development and refinement of the business strategy and influence strategic decision making.
Identify and manage new strategic opportunities
CSOs often drive and lead mergers and acquisitions, joint ventures and strategic partnerships. They look for possible opportunities and then manage them through once identified. In a similar vein, if their strategic plan calls for divestment or the selling of significant assets (possibly to fund new strategic opportunities for growth), they will oversee that process.
Why do CEOs hire CSOs?
There’s an argument to make that the strategic leadership of a business should fall to the CEO. After all, they are responsible for the overall running of the organization. So why are we seeing more and more chief execs adding a senior strategist to their c-suite?
There are a number of different factors that motivate organizations to add a Chief Strategy Officer to their leadership…
A need for immediate change
Often CSOs are brought into a business (or promoted/moved into the role internally) because of an urgent need for a strategic change in direction. This urgency and need for change may be because of a threat from competitors, a new instability in the market, shifting customer expectations or behaviors – anything that needs an urgent response in order to ensure market share, or even survival.
Relieving the CEO
The presence of a CSO within an organization often comes from a realization from the Board and CEO that strategic success needs full-time focus and ongoing attention. As markets get more complex and digital disruption increases the velocity of change, the job of strategy becomes more complex, more constant and more demanding. With ultimate responsibility for the entire organization from its day-to-day operations to its future sustainability, the CEO can struggle to maintain that unwavering focus and do the job of strategy to its full.
Avoiding the execution gap
Even organizations with strong strategies and a CEO with a clear vision for the business, can struggle to make that strategy a reality and deliver on the objectives. The gap between strategy and execution can cost businesses dearly. Lost revenue, wasted time and resource, profit loss, and even, ultimately, business failure. Investing in a senior leader to drive the strategy through can bring significant returns.
Having no strategy at all!
This is more common than you think, especially in younger businesses. Often businesses that saw initial growth and success have managed to ride the wave and drive revenue and profits more from luck than judgement. But they reach a time where it becomes crucial that they get strategically organized in order to take the business to the next level and scale up.
Failed attempts to get it right
When CSOs are hired into businesses that are not new to the concept of strategy, it is often because previous strategic planning efforts have been unsuccessful, or at least ineffective. That might be because the analysis and decision making was lacking, or it may have been down to failures in the execution. Whatever hindered the success of previous strategies, hiring an experienced senior executive to take full responsibility for strategy going forward can make all the difference.
What are the benefits of having a CSO in your business?
Coherence and consistency
There are often problems when c-suite leaders who are responsible for particular areas of the business translate the strategy for their teams. Each senior leader, heading up their own division or function or business unit will inevitably inflect the strategy in line with their concerns and priorities. This disparity can open up execution gaps as priorities become slightly distorted.
The role of the CSO ensures one central executive who can monitor the dissemination of the strategy throughout the business and mitigate against any distortion. With a CSO, the CEO has one person who can drive the cascading of the strategy and the workings of the execution and reduce the risk of a collection of CxOs with different interpretations going in slightly different directions – because the further they go in those different directions, the bigger the gaps will become.
Impartial decision making
Another benefit of a CSO without any joint responsibilities for any other function, is the ability to make impartial strategic decisions. When they are not responsible themselves for a certain area of the business, they are abstracted enough to make unbiased decisions. They can objectively see where current problems exist and make tough decisions to bring about change and drive growth. Without being tethered to the BAU day-to-day they are also able to make strategic decisions free of the unconscious influence of ‘the way we do things’.
Move faster
CSOs focused exclusively on strategy are also able to move the company forward far faster than if strategy was the shared responsibility of other c-suites or department/division leaders who are already swamped in things to do. Finding space to step away from the BAU to think strategically without distractions is always a considerable barrier to strategy. It’s hard to remove yourself from the day-to-day in order to work ON the business and not IN the business. That barrier is removed when you have a CSO in your organization.
The role of the Chief Strategy Officer, or any top level strategy leader, is an exciting one. The responsibilities are considerable, but often do not come with direct control of resources. This is just one of a number of challenges the CSO must face…. But that is another article. Watch this space and maybe subscribe to be sure you don’t miss it 😉
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