The Chief Strategy Officer (CSO) is a novel but increasingly important role in many organizations. To explore the role of the CSO, we conducted 24 semi-structured interviews with CSOs across a number of industrial sectors. Secondary data in the form of company reports, strategy documents and presentations was used to complement the interviews.
From the outset of our research, it was clear that there was a variation in CSO roles, focused on two dimensions. The first dimension was the stage of the strategy process in which the CSO was involved. Our findings identified a significant demarcation between whether the CSO was focused on the formulation of the strategy or the execution of the strategy.
The second dimension of variation was how the CSO engaged in the strategy process. Some CSOs were facilitators, advising business units during the strategy formulation or assisting in the execution. Other CSOs were enactors, far more likely to execute the strategy process by themselves or with their team.
Based on variation in the roles carried out by the CSOs, we have developed a typology of four CSO archetypes.
These types of CSOs focused almost exclusively on strategy formulation by themselves or with their strategy team. The execution of the strategy — ownership and responsibility for its implementation — resided firmly with the business units. These CSOs carried out activities similar to traditional management consultants. As a result, we have called this archetype the “Internal Consultant.”
This type of CSO adopted a very rational approach to the development of strategy. One of them described the role as “getting the facts on the table, coming up with options, evaluating such options and then recommending one to the business….So it’s trying to bring everyone up to the same common understanding on what are the key facts….So we go in, we say what’s the nature of the issue, let’s bring the facts to bear, let’s look at the economics, let’s look at our options, let’s evaluate those options and let’s recommend the best one.”
The second archetype was the “Specialist,” a CSO for highly specialized skills that were not present within the organization. A classic example of a Specialist CSO is someone brought aboard to maintain a mergers-and-acquisitions capability. Another common area for Specialists is dealing with government or regulations. This is particularly evident in highly regulated industries where policy decisions can have a critical impact.
What separates Specialists from other CSO archetypes is their level of segregation from business units. They frequently act in a secretive manner, with only the CEO and other relevant C-level executives aware of their actions. Their activities — mergers and acquisitions, or lobbying government or regulatory bodies — are inherently sensitive and as such are kept from the organization at large.
The third archetype was the “Coach.” The Coach was very much a facilitator, and one that focused on the strategy formulation with the business units. Specifically, they leveraged their access to, and history with, the CEO and the board of directors, to help the business units develop strategies that the board and CEO would approve.
In contrast to the Internal Consultants, the Coaches did not develop the strategy themselves. One Coach viewed the role “more as an advisor to the divisional chief executives and their teams to help them develop their business strategies.”
The final archetype was the “Change Agent.” As with Specialists, Change Agents focused on execution. In contrast to Specialists, Change Agents acted through the business units as facilitators to ensure that strategies were enacted with fidelity. They described their role as “an enabler. Sometimes the gears don’t mesh in an organization. And you’re there to try and bring the people together.” Change Agents spent the majority of their time with business unit heads working on implementation.
An organization should choose its CSO based on the stage of the strategy process most in need of resource and attention. By understanding how the duties of the CSO can vary significantly, boards and CEOs can make better decisions about which type of CSO is necessary for their leadership teams — and set proper expectations for the role that the CSO will play.