Companies have C-suites and they care about strategy. So it makes sense that many would have a chief strategy officer — someone devoted to such a key part of a company’s survival and success.
But chief strategy officers are not nearly talked about as much as chief operating officers or chief financial officers, much less CEOs. Here’s the Google Search trend for those three titles:
I mentioned this, and my general unfamiliarity with the position, when I talked with Patrick J. Stroh, author of “Business Strategy: Plan, Execute, Win!” His book is about much more than CSOs, but what I learned about that, in a nutshell, is:
- CSOs are really a Fortune 500 position, but you’d better do it right: “If you put this role in place and you do it poorly, that person is either going to be a scapegoat or they’re not going to be effective at all, and let me explain that. In a smaller company, not a Fortune 500 company, you’re probably not going to have the CSO, because this role is probably fulfilled by the CEO,” Stroh says. “And the CEO does a lot of things in a startup or a smaller company, but as they get bigger and they start having hundreds of people in functional areas, they have to start building out their executive team. At some point, the CEO can’t be doing all the strategic thinking, all the innovation, all the product development and all that stuff, and they need someone to run that.”
- They work best when not divorced from operational exposure — such isolation will result in an ivory tower strategist who doesn’t understand operations and will likely be tuned out by co-workers.
- There are eight key traits of a CSO, according to press materials for Stroh’s book:
- Master of multi-tasking
- Jack-of-all-trades
- Star player
- Doer, not just a thinker
- Good handle on short- and long-term issues
- Influencer, not a dictator
- Comfortable with ambiguity
- Objectivity
Here are some highlights of our conversation, which has been edited and condensed:
CSOs don’t get a lot of media coverage, but they are out there, especially at the biggest companies.
“I think there might be more CSOs than you’re aware of. If you look at least at the Fortune 100 or top 250, I could pretty much say you’re going to have a CSO at every one of those companies,” Stroh says. “And one of the reasons I know that in particular is that I did research on it, but there’s actually a chief strategy officer conference … and they have CSOs from Fortune 100 companies speak at it, and it’s all the who’s who of companies. So a lot of these guys have CSOs in place already. So I always used to, when I would talk about business strategy and the role of the CSO, I used to say it’s an emerging role. And now I say it’s an emerged role. It’s here. There’s a lot more out there than what you might think.”
CSOs are not just a lark — a CEO better have big problems, goals or both.
“There’s got to be some sort of burning platform. It can’t just be the CEO went on a trip, he read an article about CSOs and said, ‘Gee, I should have a CSO,’ and they want to just incrementally do something with the business. There’s got to be a problem here. They want to double the size of the business in two years, they want to add new product lines on, they want to do M&A targets, they need to have more leadership development. The CEO has to have a couple really good reasons for why they want to have this role and then empower that person to pull it together.”
The CSO, ideally, has deep knowledge of internal operations (usually an insider, but an outsider can succeed also) and shouldn’t be isolated from that after taking the job.
“I’d say the CSO is more external-facing but with deep knowledge of internal operations. And so this goes back to what makes a successful CSO — I think the bad ones are the ones who sit in the ivory towers and pontificate … the really good ones have probably come from inside the company,” Stroh said. “They’re operational- or functionally focused, and what I mean by that is that they’ve run something. They’ve run operations, they’ve run the call center, they’ve run product development, they’ve run marketing. And hopefully they even still have some of that in their CSO role. So they’re eating their own dog food when developing strategy because they have to live with it.”
Here’s what that new CSO should do.
New CSOs should go to stakeholders and say, ‘Here’s what the boss wants, and here’s the problems; tell me what your problems are in your functional areas, and we’ll solve them both at the same time.’ Because now I’m automatically going to get their buy-in because I can potentially bring additional resources to the table and help them solve their problems.”
The CSO needs to have the CEO’s ear while working with all management.
“The CSO really does need to report to the president or the CEO,” Stroh said. “Because if it’s reporting there, that person is empowered to do what they need to but they also have to work together with their peers to put this stuff together, and that’s why I say a key difference in wording of this role is, they are the chief ‘facilitator’ of strategy, not ‘creator and designer.’ The CSO can’t design and implement all the strategy; they have to be the one to facilitate the executive team to get there.”
The ideal traits of a CSO seem to also function as a list of ideal traits for a CEO, but that doesn’t need to be a roadblock to recruitment.
“A CSO could be a very good feeder position to CEO. So if I’m the CEO of a company and I don’t have the right team from a succession-planning standpoint, I could bring in someone in as the CSO, have them learn the business, give them one or two smaller functional areas, but help put strategy in place and now I’m grooming my successor.”
Stroh later added that companies should take out their organizational charts and look at who’s doing strategy. Many companies have spread out that function among five or six people, and it may be helpful to have ultimate responsibility with one person (a CSO).
“Absolutely there are lots of other people doing this role today in bits and pieces, and then you have to question the effectiveness of that,” he said.
The role of the CSO may be on the rise in the biggest companies as the role of the COO is potentially diminishing.
“If I had to give this, a CSO role, a different title, and I couldn’t obviously use CEO or president, it would be COO,” Stroh says. “Because traditionally, that COO, at least in a larger company, they are very strategic and they’re certainly in operations, but they’ve got their divisional [chiefs] and so forth that are really into the nuts and bolts. So a COO and a CSO could be very synonymous. But now, again, if you’re going to a company that’s a little bit smaller, the COO is probably very into the weeds and the details, and if they’re too internally focused and not keeping an eye on the market like a COO can at times, then they’re not going to be effective in the strategy position.”