Hiring a Chief Strategy Officer (CSO) is becoming common practice these days not only among large multinationals but also among medium-sized enterprises. Recent empirical studies from the United States, UK, and Germany confirm this widespread trend. At the same time, they point out that the role and importance of the CSO may vary significantly from company to company. CSOs not only bring diverse sets of skills and experience to their jobs, but also fulfill different functions and responsibilities. Nevertheless, four basic types of CSO can be distinguished (Powell & Angwin, 2012; Menz et al., 2011):
- Internal Consultant
These types of CSOs are primarily concerned with strategy formulation. They tend to follow a very structured and systematic approach which includes collecting and analyzing all strategically relevant data and information, identifying and evaluating options, and then recommending the best ones to the board and CEO. As the name implies, such CSOs and their teams have an advisory role. They are more or less objective analysts who can be called to provide advice on any strategic issues at any time. They often join the company after having worked for consulting firms and use their new positions as a springboard to make careers within the company. Internal consultants are typically found in medium-sized, centrally organized enterprises as well as in highly competitive industries.
The second type of CSO are professionals with highly specialized skills that are needed for implementing strategic initiatives. As an example, Powell and Angwin mention experts in the field of merger-and-acquisitions-management or lobbyists specialized in market regulation issues. Due to the sensitive nature of these areas, such CSOs often work somewhat isolated from other departments and report directly to senior management. Unlike internal consultants, specialists often work on a project basis and, consequently, tend to change employers more frequently. For the German-speaking regions, Menz et al. report that this type of CSO can be found primarily at financial service providers and private banks as well as in centrally organized small and medium-sized businesses.
The third type of CSO serves as facilitator of strategy formulation. He helps the business units in developing promising strategies and communicating them to the board and CEO. Unlike internal consultants, he does not develop strategies himself. Strong ties to the top management as well as good communication skills are important prerequisites for the job. Coaches are employed in decentralized businesses of all sizes and industries.
- Change Agent
Change agents also act as facilitators ensuring that strategies are thoroughly implemented by all business units. They spend a lot of their time communicating and coordinating. Change agents are often experienced executives who are recruited from within the organization. They know the organization very well and have good relations to important players. Change agents tend to remain in their positions longer than other types of CSOs and typically work for large, decentralized enterprises.
Hiring a CSO is an important step towards meeting the strategic challenges of an increasingly complex and volatile business world. Which type of CSO a business needs depends on several factors, such as the size, organizational structure, degree of diversification, the dynamics of the business environment, and the phase of the strategic planning process in which support is needed. The typology presented helps businesses in deciding which model suits them best and picking the right candidate for the job.
Breene, R.T.S., Nunes, P.F., & Shill, W.E. (2007). The chief strategy officer. Harvard Business Review, 85(10), S. 84 – 93.
Menz, M., Müller-Stewens, G., Henkel, C.B., & Reineke, B. (November 2011). Die vier Gesichter des Chefstrategen. Harvard Business Manager, 11, S. 6 – 9.
Powell, T.H, & Angwin, D.N. (Fall 2012). The role of the chief strategy officer. MIT Sloan Management Review. http://sloanreview.mit.edu/article/the-role-of-the-chief-strategy-officer/