New research from Deloitte’s strategy practice Monitor Deloitte examines how Chief Strategy Officers plan to seed growth for the year ahead, and delves into the importance of technology strategy and purpose strategy in their day-to-day roles. The firm’s third annual Chief Strategy Officer Survey study provides unique insights into the role of the CSO and the evolution of the strategy function.
The research found that CSOs are optimistic about their company’s ability to drive revenue and profitability growth in 2022, with 80 percent of CSOs expecting an increase in revenue, profit, or both over the next 12 months. Additionally, 88 percent of CSOs say they want to play a more central role in determining their company’s advanced technology strategy, and 73 percent of CSOs agree that purpose strategy is a priority for the C-suite.
“The last 24 months have brought unprecedented levels of uncertainty and volatility and CSOs are adapting with agility, navigating near-term challenges while helping to position their organizations for long-term growth,” said Tom Schoenwaelder, principal at Deloitte Consulting LLP, and leader of the Strategic Growth Transformation market offering at Monitor Deloitte, in a news release. “The CSO Survey findings show that strategy leaders recognize the importance of advanced technologies in enabling strategic opportunities, and also are helping drive convergence between purpose strategy and business strategy contributing to the greater good, while enabling superior shareholder returns.”
Growth investment allocation today vs. in the future
Growing during the pandemic
CSOs are generally optimistic about their organizations’ opportunities for growth and the survey found that 80 percent of CSOs expect an increase in revenue, profit, or both over the next 12 months. Additionally, they are optimistic about how their industries will fare (64 percent), about how their companies will perform (77 percent), and even more so about their own ability to make an impact (81 percent). With the challenges of the last two years, it’s not surprising that CSOs remain cautious about the external environment, with only 40 percent of CSOs reporting to be optimistic about the future of the global economy.
The survey shows that CSO optimism is driven by their company’s ability to adapt throughout the pandemic, including the ability to operate more ambidextrously, and strike a balance between protecting their core business while investing in long-term growth. Over the past 12 months, CSOs have spent time investing in and growing their core business. Core offerings represented 66% of total investment in 2021, but are expected to fall to 50 percent due to an anticipated rise in adjacent and transformational investments in 2022. The survey also found that CSOs are ready to seed more growth opportunities, and they believe that the share of investment dedicated to new areas of opportunity will grow from 34 percent today to close to 50 percent in the future.
Strategic growth efforts over the next 12 months
The convergence of technology and enterprise strategy
Accelerating a trend seen in last year’s survey, 84 percent of CSOs agreed that advanced technologies—such as intelligence automation, predictive analytics, artificial intelligence, and machine learning, as well as virtual, augmented and mixed reality—will play an increased role as strategic enablers for their businesses. However, nearly half of CSOs still believe their companies lack maturity in effectively leveraging advanced technologies.
CSOs have a strong desire to play a more prominent role in developing their organizations’ advanced technology strategy. Fifty-two percent are currently involved in defining and executing their companies’ strategy toward advanced technologies (up from 47 percent in the 2021 survey), and 88 percent of respondents would like to play an even more central role in this process. The survey found that CSOs believe they can make the biggest impact in their organizations’ advanced technology strategies in a few key areas: explicitly linking technology and business strategy (84 percent); estimating and tracking value creation (67 percent); directing and managing investments (66 percent); and defining priority use cases (64 percent).
Key challenges in leveraging technology as a strategic enabler
Corporate strategy with purpose
Corporate purpose is becoming an integral part of the CSO mandate, and 73 percent of CSOs agree that purpose is a priority for the C-suite. Companies are making strides in defining and advancing their purpose strategies and integrating them with business strategy. The survey found that 77 percent of CSOs agree that their organizations have a clearly defined purpose strategy; 77 percent agree that the primary focus of their purpose strategy is to create value; and 78 percent agree that their purpose strategy is well integrated with their core enterprise strategy.
However, there is room for improvement when it comes to measuring the impact of purpose efforts and communicating the value to stakeholders. Only 20 percent of CSOs strongly believe that their companies make it a priority to collect and report on purpose-related data, and only one-third of respondents strongly believe that their companies clearly and consistently articulate their purpose strategy internally and externally.
Purpose strategy importance
To navigate the future with confidence, CSOs should ensure their decisions are clear, timely, tech-inspired and purpose-driven to deliver growth in a dynamic, disrupted world. Monitor Deloitte’s strategy practitioners combine deep industry insights with cutting edge methods to help leaders resolve their most critical decisions, drive value, and achieve transformational success.
To better understand how chief strategy officers (CSOs) have been helping their organizations address near-term challenges while positioning their businesses for long-term success, Monitor Deloitte, the strategy practice of Deloitte Consulting, surveyed 230 senior strategy executives from 35 countries globally, representing organizations of different sizes and ownership structures across various industries. The report offers insights into how CSOs have been the most effective in driving tangible impact.