Strategic management is both an art and a science. It is a science because scientifically proven management techniques are documented and applied to everyday management practices, these scientific processes and practices are being taught to various cadres of managers. Strategic management is also an art based on the age-long practices passed down in folktales. The Seven Wonders of the World had an in-depth application of strategic management, the hanging coffins of Sagada in the Philippines, among others entrenches the age-long practices of strategic management. Organisational managers view strategic management as the identification and illustration of the strategies that management implements to attain superior financial results for their organisation, especially, in comparison to the competitors. This enormous role, however, resides with the Managing Director/Chief Executive Officer. Usually, the job description of the MD/CEO among others makes him responsible for leading the development and execution of the organisation’s strategy with a view to creating shareholders value. The CEO’s leadership role also entails being ultimately responsible for all day-to-day management decisions and for implementing the organisation’s plans. The CEO acts as a direct liaison between the Board and management of the Company. The CEO communicates to shareholders, employees, Government, other stakeholders, and the public. This is an enormous task and makes it impossible for him to really get into the details of all organisational activities.
The Cost of Executive Pressure
The increasing pace of changes as evidenced by corporate failures globally has put increasing pressure on most MD/CEOs. It is lonely at the top and the pressure can be intense. Most have increased their reliance on senior executives to fill the execution void based on the inability to carry out the supervision and detailed management of these processes. Unfortunately, these managers are also saddled with their own excruciating duties with timelines. They, in turn, saddle their subordinates with the duties from the CEO and the job is at best undone. These haphazard approaches to management take its toll on the MD/CEO, adding to the executive pressures, which crystalizes into poor organisational performance.
The chief strategy officer (CSO)
A relatively new but increasingly important role in many organisations that emerged in the past decade as an addition to senior executive management positions as exemplified by many Fortune 500 companies. Many CEO’s have less time to devote to executing strategy, as a result, chief strategy officers comes handy and they focus solely on strategy execution processes. Organisational strategy is what drives change, therefore it is the role of the CSO to understand what challenges lie in the horizon and where the shoes pinches make plans for the implementation of the actions and articulating the overall organisational strategy to various stakeholders with the approval of the MD/CEO. These involve but not limited to shaping organisational strategy through strategic foresight, strategic innovation, strategic communications, and knowledge sharing. Increasingly, CSO’s in various organisations are viewed in different contexts depending on the structure, business, and stakeholders expectations. Some of these contexts are discussed below:
- CSO as an Internal Consultant: This CSO’s carries out activities similar to the traditional external management consultants, but operates internally and are part of the system. While the execution of the strategies, ownership, and responsibility lies with the various business units, the CSO and his team work with these units in the formulation and execution of this business unit-specific objectives with an eye on the overall organisational goal. They particularly come handy wherever there are issues that need additional analytical backing, some objectivity, or a slightly more neutral perspective.
- CSO as a Coach: It is assumed that people appointed to these roles are vast in the organisational activities at the top and or has transverse the various departments of the organization or similar organization and therefore has what it takes to deliver on the role. As the eyes and ears of the MD/CEO, these CSOs must leverage their access to, and history with, the CEO and the board of directors to help the business units develop strategies they would approve. They also act as a kind of flexible, analytical resource to all business units of the organisation.
- CSO as a Change Agent: Change agents do focus on execution and that is the real essence of the appointment. The CSOs as change agents spend the majority of their time with business unit heads understanding their pains, feelings, and fears with a view to the implementation of the set targets and feeding these back to the MD/CEO. Usually there must be weekly if not daily meetings with the MD/CEO. Without these constant interactions, the MD/CEO most likely will lose sight of the implementation issues in the organization. Therefore, as change agents, their success depends on their knowledge and network within the organisation
Strategy formulation as simple as it sounds is an activity that draws heavily on the creativity of the human mind and there are no prescriptive formulae that give the right answer. In the current turbulent business environment, the changes to the business landscape exert enormous pressure on the CEO’s quest to innovate. The multiplicity of the CEO’s role makes it even more difficult to be on top of everything, even in areas as important as strategy execution. The COO or the CFO may seem like obvious resources to tap, but there are risks in delegating the oversight of strategy to either considering the enormity of their own roles. Chief Strategy Officers are usually responsible for identifying major changes in the environment, customer base or competition, and defining adjustments required. The strategic management process is more than just a set of rules to follow. It is a philosophical approach to business. Upper management must think strategically first, then apply that thought to a process. The strategic management process is best implemented when everyone within the business understands the strategy. The five stages of the process are goal-setting, analysis, strategy formation, strategy implementation, and strategy monitoring, the Chief Strategy Officer best fits in this regard.
Strategy formulation as simple as it sounds is an activity that draws heavily on the creativity of the human mind.