Understanding the Role of the Chief Strategy Officer

Understanding the Role of the Chief Strategy Officer

          
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Understanding the Role of the Chief Strategy Officer

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    What Are the Typical CSO Responsibilities?

    Our findings revealed that the CSO has the least-defined role among C-suite-level executives. The role is characterized by a high level of ambiguity, constantly evolving relationships with key stakeholders, and regular changes to the scope of work. As one executive we interviewed noted, “The strategy department is in charge of every new project that falls outside the boxes of the traditional organization.”

    Broadly speaking, CSO responsibilities fall into three categories—strategy development, resource allocation, and strategy execution—but activities within these three categories vary widely. (See Exhibit 1.) Most CSOs are responsible for identification of growth opportunities (84 percent of the executives we interviewed), strategic planning (82 percent), and M&A and divestments (82 percent). Other common responsibilities include monitoring long-term trends and outlook, gathering competitive intelligence, driving cross-business-unit initiatives, and sustaining business model innovation. Far fewer CSOs are involved with identifying cost improvement opportunities and managing postmerger integration (23 and 20 percent, respectively).

    exhibit

    CSO responsibilities vary by industry. For instance, consumer goods companies’ CSOs focus primarily on strategic planning and cross-business-unit strategy, whereas CSOs at industrial goods companies focus more on increasing shareholder value through portfolio management, M&A, and identification of growth opportunities. CSOs in the energy and financial services industries tend to have more-diverse responsibilities.

    The size of the CSO’s centralized strategy team varies depending primarily on the size of the company itself, but the centralized team tends to be smaller than strategy teams in the business units. (See Exhibit 2.) Of the CSOs we interviewed, 68 percent reported teams of ten or fewer, with a median size of seven. Responsibilities drive team size, too. CSOs who are accountable for M&A or innovation tend to have larger teams than CSOs without those responsibilities.

    exhibit