Corporate strategy is the responsibility of the Board and mainly of the Chief Executive Officer (CEO) who must, among other things, imprint her vision on the organisation and define the strategy. She must build the DNA of the company and indicate in which course she wants to take it. This role is vital because no organisation can survive if it does not know what it is and if it is not aware of its own values and purpose (its vision) and if it does not know where it wants to go (its strategy).
It is these choices, which will determine the allocation of resources, the prioritisation of activities, the choices of partnerships and external growth, …
Is your business in need of a Chief Strategy Officer (CSO)?
In recent years, however, companies operating throughout the world seem to be transferring part of this major role to a new player: the Chief Strategy Officer (CSO).
Being surprised by this trend in organisations, I have tried to find out why companies are creating a new position in order to transfer tasks to this new role, although the CEO seems to be already in charge of that to start with.
The global economy is complex. The associated constraints are enormous since business must be organised with people from different cultures, through different time zones, according to different economic and political regulations. This complexity pushes Executive Managers to become real “globe trotters” who criss-cross the world to align activities and put subsidiaries back on course. Not to mention the ” roadshow ” for investors and shareholders which are also time-consuming. It is increasingly difficult to make decisions for everything, and even the best CEOs have to sleep sometimes!
According to the Harvard Business Review, a study shows that top managers spend, on average, merely 3 hours per month dealing with strategy-related topics.
In addition, the term of office of CEOs is becoming shorter and shorter (average of 4 to 5 years according to Accenture), which can lead to instability of vision and/or strategy. Setting up a separate function dedicated to the implementation of the strategy can partially compensate for this issue and ensure the deployment of actions during periods of instability at the head of the Company.
The most brilliant strategy is meaningless if it is not turned into real measures. However, the definition of actions, their implementation, the follow-up of results, the re-alignment, … were until now managed by the CEO. It is easy to imagine the complexity of the task in a Group with several Business Units, operating on several continents (imagine what this can be like for a Group such as Sony or General Electric). This is a complex process, where persuasion (and therefore availability) is essential to ensure that operational managers make decisions in line with the Group’s strategy.
So, why not transfer part of this responsibility to a member of the Board such as the Chief Operating Officer (Chief Operating Officer – COO) or the Chief Financial Officer (Chief Financial Officer – CFO)?
Because they are too heavily involved in day-to-day business operations. Regardless of their workload, which is substantial, the trade-off between the short term and the long term is a critical element in the choices that need to be made. The involvement of the COO and CFO in day-to-day operations can be a handicap.
As said before, the CEO must inspire a vision and a strategy. He, therefore, remains the decision-maker and the inspirer.
The onus is on the CSO to provide a clear definition of the strategy, turn into an action plan with the field, facilitate them and obtain their commitment around the strategic project, support the necessary changes, coordinate the alignment of decisions.
Its role is clearly field-oriented. He can’t be a strategist, he must be a doer.
- Interview published by McKinsey : click here
- Definition published by Wikipedia: click here
- Definition published by NationMaster.com: click here
Who is responsible for strategic deployment in your organisation? What do you think of this position? Do you think that it can also exist within mid-size companies?