Do You Need a Chief Strategy Officer?

The role of the Chief Strategy Officer can mean different things to different organizations, leading a company to question whether they really need one. Defining strategic business direction has long been the purview of the CEO, alongside the Board, and for this reason, the CSO role can feel superfluous. Companies often fall prey to the ‘too many officers, not enough troops’ mentality, where the size of the C-suite or executive leadership team far outweighs the needs of the organization. 

Moreover, the duties assigned to the CSO role can be vague. As one CSO for a global pharmaceutical company said, “I am responsible for nothing and accountable for everything.” Unlike other members of the C-suite, who have oversight of concrete, day-to-day tasks and deliverables, the CSO’s role is more intangible. He or she needs to focus on the future, provide counsel and build relationships.

While the responsibilities of the CSO role may feel less detailed than those of other executives, they are no less important. Deloitte breaks down the role of the CSO into six key categories: Advisor, Sentinel, Banker, Engineer, Aide de Camp, and Special Projects Leader. Kaihan Krippendorff, the founder of Outthinker Networks goes even further, assigning 17 key objectives to the role of CSO. For every company, the exact nature of the role is left to interpretation. However, a CSO or comparable position can provide significant support to the CEO, helping the entire C-suite to do their jobs more effectively and spearheading successful strategic results. 

So how do you know if a CSO role is right for your organization?

First, consider where you are headed.

To evaluate whether a CSO or a strategy-focused senior executive is a good fit for your organization, it’s important to evaluate where the company is now and where you want to go, especially in light of your wider industry and market. Often, companies find the CSO role can be a much-needed breath of fresh air, even when things seem fine on the surface. 

CSOs can play a crucial role in helping you correctly assess trends in the market or changes on the horizon for the industry. If work is ticking along at a solid pace right now, and your team is in a comfortable groove, the CSO position may be just what is needed to create a plan for continued success in the future. If, on the other hand, you don’t yet have a clear strategic focus or if the CSO role would be one with little engagement or oversight, chances are your company isn’t quite ready to bring someone into that position.

CSOs do best when they can collaborate closely with the C-suite and when they are given the latitude to impact the strategic direction of the company.

Second, consider your current leadership team, especially the demands on the CEO.

The CEO can be a lonely position, and depending on the size of the organization, your CEO may be overburdened with managing the strategic direction alone. Even with the support of the Board, having an insider perspective, someone who is part of the day-to-day operations of the company, can be invaluable, particularly when the relationship between CSO and CEO allows for honest and forthright feedback and, at times, disagreement.

In the ideal version of the role, the CSO can focus on the future while the CEO is more consumed with the current reality and day to day activities. Too often, companies make the mistake of pushing tactical work onto the CSO role, when a CSO is better suited to looking at strategy from a high level and influencing its direction. The best thing a CEO can do when considering whether to bring on a CSO is to clearly delineate those areas that need more visionary thinking and then hold the CSO accountable for guiding and directing the CEO and the rest of the team.

Third, consider your vision for the role of the CSO.

A strong CSO will be curious and competent, able to dive deep into every aspect of the business and understand how each department contributes to the overall business strategy.  General skills include a strong ability to lead and direct a team, including the executive team, as well as a solid understanding of risk and a creative, innovative mindset. 

More specific qualities will come down to the type of CSO role you envision for your organization. Do you need a CSO who is largely focused on business development, M&A and a future exit for the company? Or do you need a CSO who can concentrate on data analytics and ensuring the company is meeting its loftier initiatives, such as ESG goals? You may need a CSO who is closely tracking business initiatives alongside day-to-day strategy and relevant KPIs, to ensure everything is aligned. 

No matter how you define the role, it is critical that you define it well. Hiring for a strategy-focused role without a clear understanding of its purpose is a recipe for failure.

Though the CSO can be invaluable to an organization, if the organization isn’t ready for it, if there isn’t proper alignment with the executive team or if the individual selected is not the right fit, it can be an expensive mistake. 

In a volatile business environment, that is easily impacted by everything from economic headwinds, to climate change, political unrest, shifting customer demands and workplace expectations, your strategy should serve as a North Star for your business to effectively chart its course. The CSO can play a powerful role in helping ensure the company stays the course, and it’s worth the effort to determine if your organization can benefit from creating this role. Here at StrategyBlocks, we’re happy to help you assess the health of your strategy and how you can most effectively utilize your team to ensure you meet your strategic goals. Contact us today!