Chief Strategy Officer

Traditionally, the Chief Executive Officer (CEO) is responsible for strategy development and execution. In today’s complex organizations, the CEO is responsible for many business issues including strategy, which is the most important. Rapid globalization and constant need to innovate has enforced strategy development to be a continuous process than a static one-time activity. Companies are becoming larger and more complex, making it more difficult for one person alone to have total oversight over the whole organization. The CEO will traditionally delegate the responsibility to the Chief Operation Officer (COO) or Chief Financial Officer (CFO). Such delegation presents a dilemma. The COO is more concerned with getting things implemented, not necessarily getting the strategically right things implemented. Similar argument can be made for the CFO. According to the Bizmanuals, CFO is a corporate officer primarily responsible for managing the financial risks of the corporation. CFO is also responsible for financial planning and record-keeping, as well as financial reporting to the management team. Proper financial planning and reporting is the primary responsibility of the CFO and not necessarily whether the decisions are made according to company’s overall strategy.
In the past few years, the number of Chief Strategy Officer (CSO) appointments has surged. The CSO is an executive who is responsible for assisting the CEO with creating, communicating, executing, and sustaining strategic initiatives within the company. The January (2008) issue of Outlook Journal states that a typical CSO is not a pure strategist that creates long-term planning which is isolated from the company's current initiatives. Many CSOs are considered "doers" first and have the past experience in execution. CSO’s are often executives who have played variety of roles at different organizations before taking on the responsibilities and tasks of the title. Most CSO’s enter the organization in roles of planning or mid-management, and go on to become the CSO’s later in their career. CSOs have prior experience in an average of four different business functions, with the most years in management, operations and technology. Fig. 1 depicts the average work experience in different business functions before taking the responsibilities of a CSO.

 

Figure 1: CSO Experience in Various Business Activities [2]

It is necessary that the CSO must understand the company’s business and culture to implement and sustain strategic changes. The CSO must be a veteran when it comes to change management. In short, the CSO must have the ability to act as “mini” CEO of the company. CSO’s have considerable responsibility with an average of 10 business functions and activities as shown in Fig. 2.

Figure 2: CSO Work Responsibility in Different Business Functions [2]

There are three primary tasks for the role of a CSO. The first and most important is to ensure that the strategic plans are converted into action. The CSO is responsible to clearly explain a company’s strategy at all levels in the organization. In addition, CSO must be able to explain the role each individual plays and how it is related to the company’s overall strategy. The second task is to drive results. Strategies are discussed in boardrooms and formulated in strategic plans. However, it is important to put the strategies to work in order to achieve results. The third task is to sustain the change and make sure that the decisions made are aligned to the overall strategy. Sometimes, as business requirements change, strategy can become fuzzy. CSO task is to ensure that management does not revert back to their old practices based on prior experience and accomplishments.  CSO’s must be pragmatic and analytical, but should also have a vision for the organizational growth and success. The CSO should leverage their deep understanding of the business and connections within organization.

The potential CSO candidate should have the following qualities/characteristics:
1.Should have a good working relationship and trust of the CEO.
2.Should have a reputation of achieving excellent results in his earlier roles.
3.Should have a working knowledge of various functions in the company e.g. operations, technology, marketing, sales and human resources.
4.Successful management requires taking decision under uncertainty. The CSO should be able to work under ambiguity and embrace the uncertain future.
5.Should have the ability to influence the incumbent management and communicate effectively at all levels of the organization.
6.Should have good multi-tasking abilities as they play a major role in various activities like planning, sales, mergers and acquisitions, new product development, market research and sales strategy.
7.Should be able to split the time between strategy development and actual strategy execution. The emphasis should be on achieving results by strategy execution.

The complex strategy development and implementation justifies the overhead cost associated with the appointment of CSO. Many organizations including Motorola, Marsh & McLennan, Nations Health, Universal Pictures and Yahoo, along with the other have appointed CSOs. It not only ensures quick and compliant action but can also serve as the succession plan. However, there are some challenges when it comes to hiring a CSO. The search for the right candidate can be long and expensive. The CEO needs to alter the organization chart which can face stiff resistance from the existing employees and stakeholders.
 
References:
[1] Chief Strategy Officer, R. Timothy S. Breene, Paul F. Nunes, Walter E. Shill, Publication date: Oct 01, 2007. Prod. #: R0710D-PDF-ENG.
[2] Rise of the chief strategy officer. R. Timothy S. Breene, Paul F. Nunes, Walter E. Shill. Accenture, Journal of High Performance Business, Jan 2008.