Business in 2024 is marked by extreme uncertainty. Among the many challenges faced by senior business leaders, some of the most concerning are the global economic outlook, domestic politics and social unrest, rising geopolitical tensions, transformations in disruptive technology such as AI, and continuously evolving consumer behaviour.
Given the current business environment, the opportunity, and indeed, the expectation, for the chief strategy officer (CSO) to add value in supporting the CEO and the board has never been greater. However, the question of how exactly the CSO adds value in practice is challenging.
The CSO’s remit can vary considerably across different organisations and leadership teams and is typically determined by the needs, personality and effectiveness of the CEO.
The role is a difficult one: CSOs have big responsibilities, often limited resources, diverse stakeholders with complex agendas, unclear metrics, and they often face organisation gaps and talent shortages. Yet, despite these challenges, CSOs can make meaningful, long-lasting contributions to a company’s performance.
Having worked with CEOs for over 30 years, Marakon has observed six distinct aspects of the CSO’s job.
1. The conductor
As a conductor, the CSO must not only ensure that conversations around strategy take place between executives, but also that they happen in the right way and at the right time. All businesses will face issues that need addressing. Often, the CSO’s role is to keep track and develop an agenda of these issues, while ensuring that senior management discusses and tackles the priorities that relate to their areas of business.
Performing well in this role requires the CSO to work seamlessly with the CEO to develop and refine the strategic direction of the business. Investing time and energy to understand the value drivers of the company’s businesses is a prerequisite. Without demonstrating a clear point of view on the strategic vision, orchestrating value at the right time is almost impossible, and the role of the conductor becomes administrative as opposed to visionary.
2. The ‘fitness’ instructor
A key role of the CSO is to build the strategic ‘muscle’ across the organisation. This can be accomplished by assisting business units to achieve high standards in the short term and develop their own capabilities to meet those standards in the long term. For this role, CSOs not only need to have their own high standards, but the ability to work well with others to help them understand the concept of ‘good’, and what it looks like.
3. The sounding board
At times, the CSO needs to undertake the role of the CEO’s strategic sparring partner and become a sounding board for the CEO’s ideas. Someone who can be independent and objective, enable the brainstorming of ideas and development of strategy. By challenging the thinking of the CEO, the likelihood of creating a robust strategy for the business increases.
Sometimes a CSO in this role may act as a ‘cover’ for the CEO, taking the lead in proposing a strategy change to the senior executive team. This can enable the CEO to position themselves as neutral, and even reject a proposal without losing face if it doesn’t win executive team support. This can be a challenging position for the CSO, having what is viewed by others as privileged access to the CEO, but also bearing the brunt when ideas are rejected.
CSOs that excel in this role are dedicated to helping improve their CEO’s effectiveness. They are often asked to deliver hard messages CEOs may not want to hear, or to even hold up the mirror when necessary.
4. The communicator
Even the best strategy will fail to achieve its goals if it is poorly communicated. Poor communication can lead to a lack of understanding and low support from employees, or starve a strategy of the resources it needs. Many CSOs work to transparently convey strategy, which includes refining communication for investors and internal communications with staff and the board.
CSOs who take on this role will often need to collaborate with investor relations and internal communications teams to simplify complex ideas for a wider audience.
5. The navigator
In today’s environment of rapid technological change and the accompanying risk of disruption, companies need to deliver in the present, while preparing for an increasingly uncertain future. Another role for the CSO is to keep management focused on the horizon. This can be a difficult balancing act.
CSOs must help the management team understand how the future might look while remaining sufficiently grounded to make that future credible and realistic. CSOs who perform well in this role will have the ability to address the current situation, while not losing focus on the big picture and understanding when a business needs to change course.
6. The troubleshooter
Once a key issue has surfaced, it needs to be addressed. CSOs will be called upon to actively fix problems or lead strategic projects. In these situations, CSOs need to demonstrate a different set of skills, as they will be directly accountable for ensuring a positive outcome. CSOs who take on this role will often need to lead teams, establish methodologies and techniques and manage business tensions.
To be effective, the CSO must understand and balance these six profiles, based on their perceived remit. Attempting to fill all six of these roles simultaneously is a recipe for failure. Equally, focusing on just one is unlikely to give the CEO the depth of support they need.
Opting for emphasis on advising, horizon scanning and strategy formulation leads to the CSO being a ‘strategic adviser’. Conversely, a focus on managing the strategy agenda, communication, standard-setting and troubleshooting will lead to the CSO being more of a ‘process manager’. Effectiveness emerges when the role aligns with the CEO and company’s vision, and confusion arises if the CSO misinterprets the distinction.
Because CSOs can add value in so many different ways, a clear remit is critical for their success. This requires clarity from the CEO on which aspects of the CSO role are important to their business and leadership approach. CEOs must acknowledge their own strengths and weaknesses, as it not only defines the role of the CSO but enables the selection of the right individual for the job.
