Since 2011, University of St.Gallen and strategy consultancy Roland Berger conduct an annual survey to examine the changing role of the Chief Strategy Officer (CSO) in European companies. This year's study involving 109 CSOs from different industries focused on the question what added value CSOs and central strategy departments have to offer to their the companies and how it can be best measured. The main results:
- Strategy work is spread out across organizations to an astonishing extent
Almost all of the companies surveyed (94%) have a central strategy department at corporate headquarters with on average six full-time equivalents (FTEs). However, it typically does not carry sole responsibility for formulating and implementing the company's overall strategy (44%), but is supported by strategy teams in other divisions or national subsidiaries. M&A departments in particular are heavily involved in formulating and refining strategies (54%). The majority of the companies surveyed (70%) also hires external strategy consultancies to assist in managing special strategy projects.
This cross-functional strategy approach has two main advantages, the authors of the study argue. Firstly, it helps globally operating companies to gain a better overall view what is going on within the organization and to stay closer to their customers and markets, thereby enabling them to respond to changes faster and more agile. Secondly, being involved in strategy development increases the commitment and motivation of the employees to actually implement the strategy in practice.
- The role of CSOs as coordinators and commutators is gaining in importance
Given the increasing number of players involved in strategy work, the function and importance of the CSO is changing. Today, one of the main tasks of CSOs is to serve as a “central, active node” coordinating and usefully advancing the contributions by all others who play a part in strategy work. This "orchestration" of cross-functional strategy work is the key added value which CSOs and central strategy departments have to offer to their companies, the authors argue.
Accordingly, there is also a change in the CSO’s skills profile. What is needed are not only analytical skills and technical expertise, but above all excellent communication and interpersonal skills. In their role as moderators and communicators CSOs need to be able to balance conflicting interests of the different stakeholders and cultivate a common understanding of the content of strategic issues. For this purpose, new methods, ways of working, and communication paths need to be developed.
- Revised job profile of the CSO needs to be considered in performance measurement
Many companies (70%) still have difficulties to measure and assess the performance of CSOs regularly and effectively. This is in part due to the fact that CSOs often don’t stay around long enough to experience the success or failure of mid- and long-term strategies themselves. Performance metrics typically focus on financial KPIs, such as EBITDA growth and return on equity. However, the authors of the study recommend using a balanced mix of quantitative and qualitative KPIs that allow for measuring both short-term and long-term effects of the various tasks of the CSO.
The increasingly important coordination and communication function of CSOs and central strategy departments, as describe in the study, can be managed easily using special software like the Strategic Intelligence Software SOLYP3.
SOLYP3 digitized strategic planning in a structured fashion across all business units. Its top-down/bottom-up approach to data collection allows the board to predefine strategic planning issues while giving business units the opportunity to bring in their own perspectives. This increases not only the comprehensiveness and comparability of strategic planning, but also the level of acceptance by all participants. Moreover, both hard and soft data, such as trend analyses, opinions, or assessments of market developments, are collected and intelligently linked enabling plausibility checks. SOLYP3 helps CSOs and central strategy departments to verify business unit strategies, coordinate them, bring them together, and join them into an overall strategy. Finally, PowerPoint presentations visualizing and summarizing all relevant information for decision-making by the board can be generated quickly and easily at the push of a button.
With SOLYP3, CSOs and central strategy departments get a powerful tool at their fingertips which can help them to ensure a smooth, participatory, and transparent strategy process—important prerequisites for successful strategy implementation.