So, what makes a Chief Strategy Officer (CSO) successful, and what do the best of the best focus on?
1. Look at external factors and what competitors are doing.
We call this strategy development: outside in. It’s not surprising that respondents rated the future market analysis component of this phase as the most important. Knowing where the market is headed provides a foundation for strategic decision-making.
What does it mean for specific industries? Intensely competitive industries (including automotive, financial services, and consumer products and retail) all rated competitor analysis as highly important. This underpins the importance of the strategy leader in driving conversations to ensure they’re focused on differentiating the organization in some way. On the other hand, government and public sector respondents emphasized the importance of stakeholder expectations; a likely result of their focus on balancing diverse, and often vocal, stakeholder groups.
2. Look within the organization at performance and factors that impact strategy.
We call this strategy development: inside out. It’s largely about taking stock of the company’s internal tools and capabilities to consider its strengths and weaknesses while developing the strategy. Most of the elements of this dimension were highly rated, but mergers and acquisitions were low on their agendas. This may be due to the traditional way responsibilities are divided in some mature organizations. Corporate development and strategy aren’t always aligned, but they should be connected through regular communication.
What does it mean for specific industries? The more regulated or publicly scrutinized an industry is — think government entities, regulators and energy producers, among others — the more likely they were to focus on risk management. Energy industry respondents placed a higher-than-average emphasis on portfolio management. That’s likely because of the industry importance of maintaining a strong balance sheet, acquiring assets to aid inorganic growth, while also strategically disposing of underperforming and misaligned assets.
3. Consider what will be necessary to successfully execute the strategy.
We call this: preparing for execution. Pulling the components of the strategy together sets the stage for successful execution. Executive respondents rated the performance management element of this dimension highly, reinforcing the idea that “what gets measured gets done.” Operating model development was left behind, though, showing many may not consider it a core business component. This is a mistake. Without a strongly linked and consistently understood operating model, quality of execution can suffer.
What does it mean for specific industries? Industries value talent development differently. Sectors where employees have common skills and can be easily replaced were less likely to emphasize this area. Automation may also play a role here. Organizations with workforces that may be candidates for automation were less likely to invest time and effort in talent development.