During volatile times like these, when the economy is shaky and recession looks more and more likely, brands and businesses worldwide amp up the priority of innovative strategy to better ensure the bottom doesn’t fall out if a seismic event occurs that can take down those who are unprepared. And that emphasis puts the spotlight on the Chief Strategy Officer.
But todays’ business landscape is much different than it was in 2008, the last major recession spurred by financial-industry activity, and even during the short recession when the pandemic caused a worldwide shutdown. So has today’s CSO role changed accordingly?
New research from Deloitte provides unique insights into how the strategy function and the chief strategy officer role have evolved and the proactive steps organizations are taking to keep pace with the shifting markets.
The firm’s fourth annual Global Chief Strategy Officer Survey, sponsored by Monitor Deloitte, the strategy practice of Deloitte Consulting, reveals three key themes:
The strategy function and CSO role are modernizing and evolving
CSOs play a key role in guiding organization growth, profitability and in building resiliency. As organizations continue to adapt to the evolving environment, survey respondents noted structural and fundamental changes in their strategy functions. Specifically, they are more formalized (74 percent of respondents report a formal strategy function and personnel), larger in size (35 percent of organizations report having more than 10 dedicated personnel), and more agile.
The word for CSOs in 2023 is “intersection”
CSOs are increasingly convening conversations at intersections both within and beyond their organizations. To drive actionable change and growth within their organization, CSOs have moved away from a centralized operating model and are increasingly operating at the enterprise level as well as the business unit and functional level. This federated structure, which increased in prevalence by 15 percent from 2021 to 2023, enables CSOs to work at the intersection of strategy and execution to drive business success and talent development.
Outside of their organization, CSOs are active in determining their organization’s role and participation in the business ecosystems that their organizations participate in. The benefits of ecosystem involvement are increasing, and the survey data shows a strong correlation between organization performance and ecosystem participation—top performing organizations are more likely to adopt an ecosystem mindset, with 81 percent of CSOs at top-quartile organizations noting an active role in a business ecosystem.
CSOs at top-quartile and below-industry-average organizations operate differently
CSOs at top-quartile organizations tend to be more focused on forward-looking topics, while below-industry-average organizations are more inwardly focused on turning their businesses around. CSOs at top-quartile organizations spend more time in their roles as the adviser and special project leader, while those in below-industry-average organizations focus more on their role as the engineer, driving the implementation of strategy.
Despite the differences, they similarly desire to shift some (12 percent) of their investment away from core and into growth areas to better prepare their organizations for the future. However, survey data shows that core investment has remained steady at 66 percent each year, likely due to the challenge of striking a delicate balance between innovation and stability as well as navigating the trade-off between long-term and short-term horizons.
“CSOs and their strategy teams are indispensable to the success of their organizations, bringing a cross-functional mindset and ability to drive growth that enables them to tackle today’s unpredictable environment and tomorrow’s challenges,” said Gagan Chawla, principal, Deloitte Consulting LLP, and business strategy leader for Monitor Deloitte, in a news release. “This year’s survey shows that they are transforming and evolving the strategy function to best operate in today’s ever-changing climate, becoming more nimble, interconnected and innovative.”
For the fourth edition of the CSO survey, Deloitte surveyed 117 respondents from 20 countries with a balanced representation across geographic locations and industries, coupled with interviews conducted with a varied set of CSOs.