Imagine the meeting of senior leaders where the CEO announces, with great fanfare, the hiring or appointment of a Chief Strategy Officer. Someone who does the big-picture thinking. Someone who creates the plan that the CEO will evaluate, potentially green-light and delegate. Someone, in other words, who does what a lot of CFOs may want to do themselves.
A CSO would not arrive out of thin air, of course. In fact, it's only reasonable to suggest that having someone focus exclusively on strategy would only be the result of a long and detailed set of discussions that would include the CFO, the COO and possibly a board of directors. Still, if finance leaders have been diligently trying to automate routine processes and hone in on data analysis to provide greater value to the organization, they could be forgiven for feeling a little usurped.
However, that's not the right attitude. According to a recent article in the Harvard Business Review, rather than pit one against the other, the authors (a group of consultants from consulting firm McKinsey) suggest CFOs and CSOs are a natural complement to one another.
"Balancing a long-term growth strategy with the demands of increasingly vocal short-term investors is a big challenge for corporate leaders, one that strategy and finance executives can best meet as a team," the article states. "A strategist's deep knowledge of regulation, innovation, and trends complements a finance expert's understanding of cost and revenue, capital allocation, and stakeholder issues."
CSO Struggles
Further along the same lines, don't assume that someone with a CSO title has every aspect of your corporate strategy figured out. For example, the University of St. Gallen recently published a study based on a survey of 109 CSOs from European companies operating across a range of industry sectors. And some of the findings from Revealing The Chief Strategist's Hidden Value were eye-opening:
- 94%: of the companies surveyed that have a central strategy department at corporate headquarters
- 44%: of firms also have strategy teams in other divisions or national subsidiaries
- 54%: of firms where M&A departments contribute to strategic planning
- 70%: of firms call in outside support on special strategy projects
This was the takeaway:
What the job of chief strategist is principally about, therefore, is bringing together and coordinating the individual strategies pursued in different parts of the company and translating them into one overarching strategy.
In other words, CFOs shouldn't fear the influence CSOs have. More than likely, the CFO and other finance leaders will have the opportunity to be important partners of the CSO. What's more, financial and corporate performance data coming out of the finance department will most definitely provide the key insights that influence and even drive decisions in the office of the CSO.
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