What Does The Chief Strategy Officer Do & Why Do I Need One For My Business
Major Points of the Article
It is important to understand what does the chief strategy officer do
A CSO can significantly help scale and grow your business
They are not the CEO, but sit alongside the CEO and are the thinkers and doers, providing real tangible outcomes.
A direct hire can be very expensive, but there are alternatives.
In a traditional business hierarchy you would have the CEO, perhaps some divisional General Managers, and then many workers contributing or delivering the products and/or services. Within this structure, the CEO is in charge of the vision and planning, however, things have changed.
In today's market competition has increased immensely as your competitors are no longer local, and interstate or overseas competitors are expanding into your territory. Add to that the explosion of startups that are disrupting the current marketplace and while you are profitable now, a startup could disrupt and steal ALL of your customers, sometimes within a month.
It has become ever more important to defend and grow your business, which is tough for a CEO that is in charge of an entire company. CEOs like yourself already have a tonne of work to do and the added stress of potentially making a mistake can lead to many wrong decisions, costing millions to your company.
What Does The Chief Strategy Officer Do?
First off, they are not the CEO and they do not replace them. In fact, they sit to the side of the CEO, to share the load, maintain, or regain control of the organisation that is constantly threatened to become chaotic. Typically they:
assist in devising the short and long-term strategy
develop and explore options that the business can take
provide analysis and recommendations for the CEO to decide on
forge new working relationships and synergies across the organisation
establish greater transparency and accountability
ensure that all strategic initiatives, at all levels of the organisation, are in line with the company's standards and objectives.
are the thinkers and doers, providing real tangible outcomes.
It is not uncommon for a CEO to formally hand the reins of the strategy over to individuals known by a variety of other titles, but in recent years the title of CSO has grown.
In breaking down their focus, typically they use the horizons model and spend a greater portion of their time on horizon 2.
horizon 1 - monitoring and growing the current business (0 to 2 years)
horizon 2 - near-future growth strategy and projects (2 to 5 years)
horizon 3 - long term strategy and projects (5 to 10 years)
Why Do I Need A Chief Strategy Officer?
Over recent years there have been significant changes in the business landscape. Such as:
complex organisational structures
the struggle to innovate or competing innovation disrupting your business
AND because of all of this, strategy development has become a continuous, not periodic, process, which leads to successful execution requiring rapid and effective decision making.
You might think this could be delegated to the COO or the CFO, but there are significant risks, and potential oversights to be made by such individuals. Take for example the quote "a fundamental conflict between what is easy to execute and what is right to execute often leads the chief operating officer away from the tougher decisions" (from Willaim W. Wommack, The Board's Most Important Function 1979). Similarly, you would see these conflicts in the CFO's interests.
However, you should not confuse a CSO with professional coaches, motivational coaches, or culture consultants. A CSO's point of difference is while they instruct others and serve as mentors, and can improve the culture, they are doers first contributing to the team, with the mandate, credentials, and desire to act as well as advise. Most importantly, they know how to focus the organisation for the short and long term.
Essentially, a CSO has a broad mix of skills and experience that most people in today's functionally oriented career paths do not have the capability to address so many diverse challenges at once.
When Do I Need To Employ A CSO?
A CSO does not suit all businesses. In fact, if you have a micro-business, unfortunately, it is too early. To know when your business is ready for a CSO, it could be one of four things.
You have scaled to the point that your business needs to split into divisions/general managers.
Your business has slowed in growth, plateaued or is shrinking, and requires a fresh strategic perspective.
Your business is growing year on year, but you would like it to grow faster in revenue and profits.
Your business has scaled and is growing well, however, it is time to branch out and grow or acquire additional entities to diversify your organisation into a group of companies.
Which one are you?
How Much Does a CSO Cost?
Some research on the web will show you a Chief Strategy Officer averages around $274k per year, while similar titles - Chief Growth Officer averages $200k per year, and Chief Innovation Officer $110k per year. This could be quite daunting for you, especially if you are requiring a fresh perspective because the business has plateaued or worse, shrinking. BUT there is a solution:
Paradelta Strategy, is a business strategy and brand equity building company that specialises in reviewing and improving your business. We can act as a virtual CSO providing all the required help you need at a scaled price. Over the years, we have helped businesses across Australia to grow and expand, nationally and internationally, and grow significantly in profits. To get assistance with your business, simply email us at email@example.com or schedule a no-obligation discovery call here.