Life Cliff Notes: The Chief Strategy Officer (Harvard Business Review 10/07)
As a “Tugboat Pilot” leading or guiding senior management, non-profit teams, superstar or entry-level individuals and the like across thorny challenges under several capacities, I have liked to view myself as a strategist just like my subject, Napoleon Bonaparte. Nap was a French military leader and emperor who conquered much of Europe in the early 19th century. Nap was born on the island of Corsica, he rapidly rose through the ranks of the military during the French Revolution (1789–1799). After seizing political power in France in a 1799 coup d’état, he crowned himself emperor in 1804 (nice!). Shrewd, ambitious and a skilled military strategist, Nap successfully waged war against various coalitions of European nations and expanded his empire. However, after a disastrous French invasion of Russia in 1812, Napoleon abdicated the throne two years later and was exiled to the island of Elba. In 1815, he briefly returned to power in his Hundred Days campaign. After a crushing defeat at the Battle of Waterloo, he abdicated once again and was exiled to the remote island of Saint Helena, where he died at 51. At least, he kept pulling off these “mini retirements” (go Tim Ferris!) and resorted to these islands. Nap sure has some taste.
Personally, the only way I could flourish as a successful strategist or “Chief Strategy Officer” (CSO) is if I was given the right canvas (platform/audience), paintbrush (freedom/free rein), and palette (team/resources). But in reality, most CSOs are not given the luxury of having the right tools or framework to jumpstart their work in what they think would lead to optimal performance or results as quickly they’d like. In most instances, they are often inherited with a magnitude of problems and very limited resources. As a mechanical rebel, I guess these sort of challenges excite me only if I’m given a fighting chance to do so. Therefore, as a manager or team lead, you may ask, “Ok, so how can I create opportunities that allow these strategist or forward-thinking talent to flourish and truly bring value to my organization (or team)? How can I understand how these CSOs operate?” To find some answers to the million dollar assignat, let’s hit up some cliff notes I captured from an oldie, but goodie HBR article 2007 I found in my archives (yep, I’m that guy who rips articles from magazines I find pretty cool or relevant and file away in a specifically marked manilla folder only to be perused years later). Then I’m gonna cheat a bit here by adding some stuff from a 2014 McKinsey article:
- CSOs do not emerge from predictable background with easy to map career paths or aspirations, and their skills, experiences, best practices, and preferences run the gamut.
- They are seasoned executives (or staffers to execs) with a strong strategy orientation who have typically led major initiatives or businesses and worn many operating hats before taking on the role.
- They have significant experience in formulating strategy, often gained at top management consulting firms or through years of strategy-related work in companies.
- Most top strategy executives are star players more so than professional coaches. They instruct others and serve as mentors, but they consider themselves doers first, with the mandate, credentials, and desire to act as well as advise. Most important, they understand how to focus the organization on executing today, not just on planning for tomorrow.
- Many spend time on consumer innovation, business process outsourcing, financial structure, international expansion, communications, acquisitions — most people in today’s functionally oriented career paths don’t have the experience to address so many diverse challenges at once.
- Chief strategy executives must be able to work with and influence people across entire organizations and beyond. The broad mix of skills and experience required of a CSO is rare, which makes those who possess this combination highly valued.
- CSOs are often given carte blanche to tackle company wide challenges and seize new business opportunities, so there must be a strong bond of trust between the strategy chief and the CEO.
- They are masters of multitasking. Jack of all trades — line management, functional experience in disparate areas including technology, marketing and operations.
- Explain to employees the details of strategic plan and how their work connects to corporate goals.
- Their deep knowledge of chief architects of the existing strategy and its history can be crucial for building the federation necessary to enact change.
- They use every arrow in their quiver.
- Aside from people and cultural issues, technology is critical to virtually every aspect of strategy –creating new products and services, developing new business models, and improving process.
- The strategy management challenge has become more and more complicated, in virtually every industry, over the past decade. Increased volatility, rapid globalization, the rise of new technologies, industry convergence and changes in the workforce — all have contributed to an environment in which top-down planning needs to be balanced with quick and agile execution.
- CEOs are being weighted down by the ever-growing complexity of doing business in a global economy (i.e., demands and intricacies of conducting business in multiple cultures, etc.).
- In the long term, the role of top strategy executive can become an effective succession-planning tool.
- CEO may need to do a hefty amount of evangelizing and relationship management to get the top team to buy into X proposal or project (i.e., restructuring of the org chart).
McKinsey: Rethinking the role of the Strategist:
Today’s unpredictable environment is utterly incompatible with what, historically, has been one of the chief responsibilities of many strategists: leading the annual strategic-planning process. While nothing new, the weaknesses of traditional strategic planning — characterized by a lockstep march toward a series of deliverables and review meetings according to a rigid annual calendar — have been amplified by the importance of agility in a rapidly changing world.
Strategists have responded by increasing the scope and complexity of their roles beyond planning. In a recent survey of nearly 350 senior strategists representing 25 industries from all parts of the globe, McKinsey found an extraordinary diversity of responsibilities. But running the planning process still loomed large, ranking second in priority on that list, even if many respondents said they would prefer to spend significantly less time on this part of their role.
There’s a way out of this box for chief strategists and other senior leaders, particularly CEOs, CFOs, and board members, whose roles are deeply intertwined with the formulation of strategy. The starting point should be thinking differently about what it means to develop great strategy: less time running the planning process and more time engaging broader groups inside and outside the company, going beyond templates and calendars, and mirroring the dynamism of the external environment.
But this isn’t enough. Achieving real impact today requires strategists to stretch beyond strategic planning to develop at least one of a few signature strengths. Several important facets of the strategist’s role emerged from McKinsey’s research, including reallocating corporate resources, building strategic capabilities at key places in the organization, identifying business-development opportunities, and generating proprietary insights on the basis of external forces at work and long-term market trends. A number of these roles are more appropriate for some strategists and organizations than for others. But the core notion of stretching and choosing is relevant for all.
Four years ago, executives around the world told McKinsey their companies were creating, by their own admission, substandard strategies. Only 35 percent were generating strategies that passed more than three of ten tests McKinsey uses for measuring the likelihood that a given strategy would beat the market. And many respondents blamed the ineffectiveness of the annual strategic-planning processes for the state of their companies’ strategies.
With a wide range of global organizations and strategists, a growing recognition that traditional strategic-planning processes are insufficient to absorb the shocks and disruptions characterizing their markets and to stimulate the ongoing deliberation that a top-management team requires. Increasingly, they recognize a need to rethink their approach to strategic planning and to embrace a more frequent strategic dialogue involving a focused group of senior executives. Effective organizations seem to be transforming strategy development into an ongoing process of ad hoc, topic-specific leadership conversations and budget-reallocation meetings conducted periodically throughout the year. Some organizations have even instituted a more broadly democratic process that pulls in company-wide participation through social-technology and game-based strategy development.
These experiences are consistent with McKinsey findings. They found that companies that consider themselves “very effective developers of strategy,” and that enjoy higher profitability than their competitors, for example, are twice as likely to review strategy on an ongoing basis (as opposed to say annually or every three to five years). They are, for instance, twice as likely to have a corporate-strategy process that goes beyond the aggregation of business-unit strategies.
McKinsey research also supports one of their major observations about what it takes to innovate in the development and delivery of strategy: over and over, they’ve seen that the chief strategists best at driving more dynamic approaches have a professional credibility that extends well beyond a traditional process-facilitation role. At the same time, they seen tremendous diversity in the characteristics of effective strategists. In a quest for greater precision, they applied statistical cluster analysis to the 13 facets that chief strategists responding to their survey described as most important to their efforts. The analysis yielded five clusters in which the strategist’s role becomes more than the sum of its parts. Widespread across industries, these clusters embody choices that face every strategy leader. The Five CSO archetypes are as follows:
o The architect (40%): business developer, performance challenger. I love this one. Examples: Lead root-and-branch strategic review, build new analytical tools and capabilities to create insight into the true competitive nature of a business.
o The mobilizer (20%): strategic capability builder, project deliverer. Examples: Develop strategic muscle, build capabilities, and deliver special projects. Play critical leadership roles in company-wide efforts to build “higher organizational IQ on strategy”. They ask the right questions, scrutinize critical assumptions and ensure that their companies are learning organizations: porous to outside trends and examples.
o The visionary (14%): innovator, business developer. Examples: Spot opportunities for creating unique sources of value that can keep the strategy ahead of external trends and competitors. Typically technology and consumer-product strategists are visionaries. Well versed in key trends, visionaries are often well placed to run innovation processes.
o The surveyor (14%): trend forecaster, government/regulatory strategist, analytical. Examples: Typically telecommunications, banking and utilities. Reflect responsibilities for risk or external relations. Think about where to deploy resources that have the greatest impact.
o The fund manager (12%): portfolio optimizer, resource allocator. Examples: Emphasize reallocating resources and optimizing the corporate portfolio of their businesses reflecting the need to balance risk and return profiles across a portfolio. A top priority could be to help the company’s executive committee make a series of unfamiliar and uncomfortable choices to reallocate resources away from traditional cash cows and into a disruptive technology that represents the future of the business.
- McKinsey research shows that companies tend to allocate 90% or more of their resources to the same places year after year regardless of changes in the environment or their strategies. Dynamic companies that reallocate resources more actively deliver better, less volatile annual returns to share holders on average than their more dormant counterparts — particularly during economic downturns.
- By fighting inertia in resource allocation, strategists can go along way towards making strategies stick.
- The complexity of today’s strategic landscape places a premium on good strategy.
Strategists have a range of powerful options for adding value to their organization.
