The Chief Strategy Officer (CSO) is a curious position. I have met a couple of them in my career. Some companies have them, while no such position exists in other companies. In the latter, the CEO will dismiss the idea that such a position would add any value when you inquire why there is no Chief Strategy Officer in the organisation. If there is a Chief Strategy Officer then what do I do, as one CEO observed? Many CEOs are therefore ambivalent and some are even hostile to having a CSO.
Most CEOs see and should see themselves as being responsible for formulating the organization’s strategy. In fact, it is central to the definition of roles. Some CEOs believe that having a strategy head would compromise their position in the eyes of the stakeholders. If a strategy has been presented by the Chief Strategy Officer, observers, in particular the Board of Directors, may question who the strategy comes from the CEO or CSO?
Many CEOs can think strategically about their industry, critically understand the capabilities of their firm, and keep pace with changes taking place in important related fields, such as competitors, technology, the environment and public policy, which will have an impact on the company ‘s future fortunes. Some of these CEOs are also sufficiently disciplined to devote the time needed to develop and update the strategy between fighting the inevitable daily fires that occur in any organization requiring immediate attention. But after applying these two filters, it is likely that only a minority of CEOs have both the ability and the motivation to engage continuously in the time-consuming process of formulating strategy and keeping it updated.
At the other hand, the CEOs are fantastic executors, by and wide. Previously, they consistently delivered results since this is how they rose to their current position. But how much experience they have had in formulating a strategy depends on their experience before becoming CEO. Did they have to formulate a strategy, or did they just have to implement a strategy?
Recognizing their limitations , especially regarding the time available, many CEOs outsource strategy to the booming strategy consultant profession. But can one ever outsource strategy-making? While accepting that there may not be another good option in certain circumstances, there are at least two reasons why it is a bad idea to outsource strategy to consultants.
Firstly, strategy is the key conversation between the management team. It is how the management team develops a shared view of the strengths and weaknesses of the companies, competitor strategies, where opportunities and threats exist, and how the social, political , and technological environment evolves. As rational people can disagree, and often do, strategy making is a messy process. Firstly, strategy is the key conversation between the management team. It is how the management team develops a shared view of the strengths and weaknesses of the companies, competitor strategies, where opportunities and threats exist, and how the social, political , and technological environment evolves. As rational people can disagree, and often do, strategy making is a messy process.
Second, implementing strategy requires the management team to “own” the strategy and be the shills for that strategy. To explain the strategy effectively, and convince the organization to execute it, the management team must believe it is their strategy or they will not be effective promoters of it. The responsibility for selling the strategy to the organization as a whole so that every employee understands their role is essential.
Being a CSO is testing for a variety of reasons, but mainly because differential competence vis-à – vis other members of the management team , particularly the CEO, is difficult to prove. This is in contrast to those who run specialist functions such as finance (CFO), technology (CTO), information (CIO), operations (COO), or even marketing (CMO). The CSO therefore has to bring some unique experiences , skills, opinions and/or capabilities to the table to be effective. And hopefully, the CEO and the other members of the management team acknowledge these.
As I have noticed many times the CEO is a lonely place. An successful CSO would have created a reservoir of confidence with the CEO. To have that confidence, the CSO must be an honest information broker and not be seen as seeking the job of the CEO. The CEO should never feel threatened by the CSO.
A major role of the CSO in formulating a plan is to be a sparring partner to the CEO. By contesting the thinking of the CEO, the likelihood of developing a sound organizational strategy grows. Being an effective CSO is challenging, since he / she must address the following:
- How do you add value to the organization and the CEO without removing the CEO from the limelight?
- How to be appropriately deferential to the CEO and yet drive strategic thinking of the CEO?
Failing the above, the CSO ends up being simply an costly tool for the CEO to make power point slides. In this case, replacing the CSO with an Executive Assistant would be easier. Sad but true.
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