What are Chief Strategy Officers focusing on these days?

The term Chief Strategy Officer has burst into our public consciousness around 2007. Before that, it was widely accepted that an organization's vision, its strategic planning efforts, and strategic directives generally flowed from the very top, and people at all levels of the organization were to align with and act on. Yet the burden of execution has grown so much over recent decades. As organizations grew more complex, while globalisation was in full swing and linear approaches to innovation and renewal, were proving difficult to effect in a rapidly volatile environment, it became ever more difficult for CEOs to be on top of everything. Back in 2007, it was argued that someone had to 'bear the burden of strategy execution in your company'. The Harvard Business Review published that year a series of articles on this exciting new role.

The Chief Strategy Officer's role was made popular with many promises. They would be the CEO's right hand person. Unburdened by the day-to-day responsibilities held by CFOs or COO's, for example, this person would have a strong strategy orientation and typically lead a portfolio of strategic initiatives or emerging businesses, from which the future of the overall organization would emerge...or so was the theory.

In that context, most CSOs we've interviewed see themselves as doers first. They think long-term strategy but cannot rest there. They would need to quickly understand how to focus the organization of today, to execute towards a future state, while maintaining some form of coherence among the organization’s many moving parts. To build 'a federation necessary to enact change' can be a huge job, it was summed up at the time.

Nearly 20 years have passed since this seat at the executive table has opened. How have Chief Strategy Officers fared? Is their role similar to what we envisaged, or are they playing a different role, in fact, for their organizations to thrive?

In speaking with numerous CSO's over the past year, we found this to be a rather mixed picture, and one few CSOs are left comfortable with.

Here are the key points they shared with us:

1.Who's strategy is it anyway? One of the most fundamental changes that have taken place over these two decades (in some industries, even longer) is how porous industry borders have become. A broader and more influential set of stakeholders had to be brought into the strategy process, as are non-traditional rivals who's strategy is built not on comparable set of assets and capabilities to your organization, but on an asymmetric advantage over yours.

In some cases, this recognition has brought about a new layer of strategy, one that we have come to call n ecosystem-wide strategy. Here, CSO combine the competitive advantage of their organizations with the capabilities and assets of others, often asymmetric players, to reap benefits for a range of role-players, an ecosystem in which your organization plays a central role.

Such a shift has placed CSOs not merely as execution heads or strategic change agents but as ecosystem builders, able to unlock value well beyond their organization's borders.

General Electric Appliances (now a HAIER company) provides us with an example of this. Recognizing that consumers are looking for not just convenience but creativity in the kitchen, its range of connected appliances, is helping consumers to experience cooking as an enjoyable experience (and, I must admit, as an aspiring but inexperienced person in our family's kitchen, I can relate!). Recipes are shared by GE Appliances' ecosystem, leveraging leading supermarket chains and a network of experts, for culinary enthusiasts to try out at home, while the ingredients and guidance to 'creativity in the kitchen' are sent to them.

We could look at this as just another feature in GE's digital journey, but in truth, the company is closing the distance between it and consumers. Zero Distance is a strategic goal for the company, and it is strategically positioning itself as the enabler of a home cooking ecosystem, expanding its strategy efforts to new frontiers, and learning with strategic partners, in the process.

So far, over 5 000 recipes have been made available online, to >150 000 cooking enthusiasts. Shawn Stover, Head of its SmartHome and Energy Solutions unit shared recently 'By bringing inspiration to people's fingertips, combining that with precision cooking modes and easy ordering of ingredients, we aim to expand their cooking confidence, help reduce food waste and create a seamless cooking journey.' - What was perhaps under-stated was how central was the CSOs role to this. A choice had to be made there. Should the CSO focus on the execution of present-day strategic initiatives or help build an ecosystem where others execute (willingly) with GE, for an outsized outcome?

2. Navigating a changing regulatory landscape has become the CSO's enterprise - With the blurring of industry boundaries and the pace of digitisation many industries face, the pressure on regulators has likewise increased. Many CSOs we have spoken with reported how they've helped contribute strategically to the regulatory landscape, one that no longer feels familiar or secure. The predictable has become uncertain; the non-strategic has become a strategic lever to future prosperity.

Let's take an example - Environmental compliance may seem as a far away from the CSO's role as one can be. Many CSOs are now investing in strategic foresight capabilities and their ability to integrate insights from fast-changing technologies, into a regulatory strategy for their organization - one that delivers competitive advantage.

In the words of one CSO, 'Environmental compliance as a strategy is helping us turn obligation into opportunity.' In many of the organizations we interviewed, CSO now stands for Chief Strategy & Sustainability Officer. A mere coincidence or recognition of the CSO's strategic contribution to value unlock and the business' sustainability?

3. Building future skills - Many CSOs shared with us how the skills most needed for the future of their organization do not reside within it. In some cases, the pace of change requires such skills to remain outside the organization for many years to come. These would rather be accessed through M&A and Partnering efforts. When it comes to future skills, we must not forget how how AI would impact these, and many are asking, who is responsible for our AI strategy? Many are looking to the CSO for an answer.

In such a scenario, skills development is no longer the exclusive domain of Human Resources or even a dedicated skills development function. Rather, the strategic interpretation of outside changes calls for the renewed contribution of the CSO. This has led many to an entirely new model, where strategy and human capital management work together to deliver a new approach to making people future ready.

The changing role of the Chief Strategy Officer, away from the CEO's right-hand person (the CEO has had quite a few in the past decade). No longer constrained by execution of strategic initiatives (a change that had to be negotiated), we see CSOs as the architect of ecosystems - ones that can unlock new value (as GE Appliances found in over 150 000 kitchens or Venture heads found with their external, general partners). Ecosystems that help turn compliance obligations into opportunities (and where CSOs and Regulatory experts work together to change the regulatory landscape in opportunity fields), and in crafting more strategic talent ecosystems, where the organization can tap into the assets and capabilities of many, for strategic advantage.

The shift from many years of inward focus to an outward, ecosystem view can be challenging, but one that is vital to the CSO's strategic contribution, and we would argue, to the organization's journey towards a prosperous future.

Where do you find yourself on this journey of the CSO's evolution? Turning inward or outward?

Have a good week ahead!