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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    Why Are Some CSOs More Effective Than Others?

    From our experience and observation, three factors determine the success of a CSO: having a clearly defined role; getting the basics right on planning, growth, and innovation; and building credibility and trust—particularly in the first 100 days. Let’s look at each of these more closely.

    Having a Clearly Defined Role

    The most effective CSOs have a clear role and well-defined objectives. This clarity allows them to stay focused on what matters and to build a supporting team that has the right people and skills. As noted earlier, CSO roles and responsibilities vary greatly. Our analysis of the range of responsibilities revealed four distinct roles: portfolio managers, strategy orchestrators, internal consultants, and CEO delegates. (See the section “How Should CSOs Work with Line Executives?” for more information on these archetypes.)

    Getting the Basics Right on Planning, Growth, and Innovation

    Strategic planning, growth, and business model innovation are the fundamental responsibilities of almost every CSO. Through the planning process, effective CSOs provide top-down guidance to the business units and align the units’ plans with those of the corporate center, a task that all our respondents said they find challenging. Driving growth is also a key aspect of CSO performance. Deciding which markets to target and how to win is especially difficult when it involves going beyond traditional, core businesses. The CSOs we spoke to said that their greatest challenge is executing growth ideas, not generating them. The ability to drive business model innovation—that is, to rethink the value proposition and operating model to capture new opportunities—is also a highly valued aspect of the CSO role.

    Even though growth and business model innovation are among the top priorities of the CSOs we spoke with, few CSOs have formal processes for executing on those priorities. As a result, CSOs often find themselves responding reactively rather than proactively to opportunities. This can be frustrating for CSOs as well as for their C-suite colleagues.

    Building Credibility and Trust—Particularly in the First 100 Days

    CSO success hinges on the ability to build relationships with the business units and deliver value, rather than being seen simply as “overhead.” Good listening skills are critical. Each business unit is different, and each will have substantive issues. As one CSO noted, “One of the hardest things to relearn is that I don’t have to speak. I have to listen to senior executives so that they open up.” Without strong relationships with the business units, strategic planning can become a bureaucratic, template-driven exercise. Another trap that new CSOs typically fall into is playing the CEO card too early. The CSO’s relationship with the CEO can be an important lever, but it must be used sparingly.

    The CSOs we spoke to all agreed that the first 100 days on the job are critical when it comes to building relationships and gaining credibility. Said one, “I have seen that the CEO forms his impressions in the first 100 days and rarely changes them later on.” Most reported that, in hindsight, they should have focused their first months more on building relationships with the business leaders and CEOs.

    To stay connected to the strategy resources in the business units, CSOs use a range of levers. These include adding nonbureaucratic team members with strong communication skills; developing a community of business unit strategists through regular meetings, monthly calls, or newsletters; and staying closely involved with daily performance management at the business unit level.