Chief Strategy Officer (CSO)
A chief strategy officer (CSO) is a C-level executive charged with helping to formulate, facilitate and communicate an organization's strategic initiatives and future goals. The CSO often reports to the CEO or the CFO, working closely with them, the senior leadership team and the board of directors to develop the organization's long-term and short-term strategic initiatives and guide the organization through the planning business processes.
The position of the CSO is relatively new and has become far more prevalent in the C-suite within the last decade as digital business and growth strategies have continued to increase in complexity. The role can go by many titles, including chief strategist or vice president of corporate strategy or strategic development.
Notable companies that have employed a chief strategist include IBM, Microsoft, Intel, Verizon, Cisco, Cognos and Accenture.
Why businesses should have a CSO
The question has been raised as to why this fairly new C-level role is necessary given that executing a business strategy has traditionally fallen under the purview of the chief executive officer (CEO). In reply, management experts point to the complexity of running a business in today's fast-paced, disruption-laden digital economy that is agile, forward-thinking, global and subject to regulatory compliance.
Executive officers and the senior leadership team are facing pressure to continuously cultivate and implement more robust strategic initiatives that will help organizations achieve a competitive advantage. More organizations are realizing that strategic planning is a complex, full-time job that may require more focus, structure and exactitude than a CEO alone can provide.
The backgrounds and experience of people who become chief strategy officers vary wildly, according to a report from the Harvard Business Review. People suited for a CSO role aren't typically forging a linear path up the corporate ladder and are often in high-level strategic positions in successful Fortune 500 companies or top-tier consulting firms.
Therefore, recruiting candidates for the CSO role is significantly more challenging than recruiting for other executive officer positions, partly because these individuals are unlikely to be actively looking for new opportunities.
Roles and responsibilities
In the general sense, CSOs are charged with developing and clarifying the vision of an organization, communicating it to the masses and sustaining the implementation efforts. Specific CSO responsibilities tend to vary from company to company, but there are commonalities.
Applicant tracking system Betterteam compiled a list of CSO responsibilities.
- Develop a comprehensive, inclusive strategic plan and growth strategy by collaborating with the CEO, senior leadership and the board of directors.
- Collaborate with the CFO to develop a capital plan in line with the organization's strategy.
- Analyze market dynamics, market share changes and product line performance.
- Identify important capital projects, joint ventures, potential M&A targets and other strategic partnership opportunities.
- Identify and convey strategic risks.
- Communicate strategy throughout the organization.
- Oversee the execution of business initiatives.
- Ensure suitable metrics and key performance indicators are in place to measure performance and progress.
- Execute divestments and divestiture.
According to John Nimesheim, managing director of Slayton Search Partners, CSOs focus primarily on building a business strategy with a three- to five-year perspective. However, it's also important for CSOs to guide long-term -- five to 10+ years -- strategy, as well as support the current core business in the short term -- one to three years.
A paper published in the Fall 2012 MIT Sloan Management Review, "The Role of the Chief Strategy Officer," concluded that chief strategists often fall into two camps: They are either the formulators or the executors of strategic plans. Based on 24 interviews with CSOs at large U.K. companies, authors Taman H. Powell and Duncan N. Angwin stated that the cohorts of CFOs responsible for executing the strategic plan tend to do that in one of two ways: They either function as facilitators whose job is to help the business lines carry out the strategy or they are enactors who execute the strategy themselves or with a small team.
A 2008 article, "Rise of the Chief Strategy Officer," by Tim Breene, Paul F. Nunes and Walt Shill, identified 90 titles associated with the role, including head of corporate development and chief visionary officer. Their research found that, in some cases, the CSO title denoted a traditional strategic planner or a vice president-level executive whose authority over the execution of a company strategy was limited.
In other cases, however, the CSO ensured the company's strategic vision was communicated and executed across business lines. This latter type of CSO often has deep business experience and almost always enjoys a strong relationship with the organization's CEO.
Chief strategy officer vs. chief marketing officer
The chief strategy officer role sometimes gets compared to the chief marketing officer role because both involve strategizing based on market conditions in an attempt to generate demand and gain a competitive advantage.
Thomas Ordahl, CSO at global brand consulting firm Landor, had the following to say about the differences between the two roles to Forbes contributor Kimberly A. Whitler:
"In general, the CMO role is designed to create demand -- drive demand through awareness and preference building," she said. "The CSO role, in contrast, often has more of a finance bent -- focusing on the role of divestitures, mergers, and acquisitions as a supplemental demand generator. However, there are many companies where the CMO plays a critical role in total demand generation, regardless of mechanism."