In a post-pandemic world, technology is changing how CSOs perform their actual work, a new study finds.
While 90% of chief strategy officers agreed that advanced technologies have become important strategic enablers, only 34% reported that their company is mature in leveraging advanced technologies and capabilities such as artificial intelligence, machine learning and data analytics, a new study finds. Meanwhile, 58% of CSOs reported playing a large or very large role in stewarding their companies' digital transformation efforts, according to the second annual survey by Deloitte and the Kellogg School of Management at Northwestern University.
The pandemic also forced CSOs to amplify their contributions to short-term problem-solving across operations and make more dynamic strategic planning cycles, the study found.
"Emerging from the unprecedented disruption of 2020, expectations for CSOs have expanded even further as they have become change agents and stewards for organizational transformation," said Bernardo Silva, managing director of Deloitte Consulting, in a statement.
The evolving CSO role
In organizations around the world, a new generation of strategy groups is emerging, with 37% of respondents noting that their strategy functions were founded in the last five years. Despite the growth of new strategy groups and functions, strategy teams remain disproportionately lean in operations and scale, with one to five people per team on average globally (48%).
Even with small teams in place, 78% of CSOs are confident of their ability to make an impact within their organization. Additionally, the CSO remains the top strategic executive at companies with developed strategy functions, with 75% of survey respondents reporting directly to the CEO.
While strategy executives have traditionally gravitated to areas such as long-term strategic planning, market intelligence and M&A, organizations are increasingly looking for a strategy to play a more central role in areas. These include structural cost reduction, digital transformation and the assessment and development of new businesses, the report said. Strategy executives are eager to play a larger role in these areas, however, they don't always feel they have the resources and capabilities on their teams to support these topics successfully.
Technology and the strategist's toolkit
Technology is reshaping roles and expectations of the CSO—while changing how CSOs perform their actual work. Respondents said they recognize that technology is fundamentally reshaping market dynamics and creating new strategic possibilities for their businesses, according to the report. The CSOs surveyed said they desire to play a greater role in architecting and orchestrating their companies' advanced technology strategy.
Additionally, 63% of CSO respondents agreed that advanced technologies will reshape their roles, and the capabilities needed to succeed as a strategy executive, according to the study.
"Strategy executives recognize that advanced technologies can be leveraged to identify and target key growth areas, unlocking new possibilities to drive a step-change in business performance," said Sarit Markovich, a professor at the Kellogg School, in a statement. "While the vast majority consider advanced technology a key success factor for themselves and their companies, far fewer feel their organization is prepared to run with it."
Addressing this gap can be a critical competitive differentiator for strategy executives and their organizations, Markovich added.
Corporate strategy in the age of purpose
As companies increasingly embrace corporate purpose and social responsibility, strategy executives seek new ways to help their organizations embed purpose into their strategy and how the business operates.
Consistent with the significant emphasis on corporate and social responsibility, sustainability and "purpose orientation" that has been reported on widely over the past year, the survey found that 67% of CSOs said that "embracing corporate purpose and social responsibility" is a top priority for their companies, while 48% of CSOs said the strategy function's involvement in this area is high or very high.
"Corporate purpose has emerged as a priority and strategic imperative, as well as competitive differentiator," said Tom Schoenwaelder, a principal at Deloitte Consulting, in a statement. "The CSO and CEO are uniquely positioned to balance tradeoffs to find the intersection of purpose and profit with the greatest opportunity for outsized returns in both."
The CSO in a post-COVID-19 world
Like many roles, the COVID-19 pandemic has changed the demands of the CSO role, amplifying their contributions to short-term problem solving across operations, the workforce and cost control, the Deloitte/Kellogg report said.
A full 60% of CSOs surveyed reported making their strategic planning cycles more dynamic since the onset of COVID-19. Another 50% of CSO respondents are starting to use scenario planning to prepare for the unknown, according to the report. As a result, strategy executives are driving outsized revenue and profitability growth for their companies in the face of business volatility and economic uncertainty, the report said.
As organizations embark on a phased return to normal, strategy executives are pivoting quickly once more. Since the start of 2021, CSOs are now largely focused on repositioning their businesses for a post-pandemic landscape marked by deep and potentially long-term alterations in consumer behaviors and spending priorities.
The 2021 CSO Survey was based on responses from more than 250 CSOs and senior strategy executives from large and midsize companies across a wide range of industries in North America, Asia Pacific, EMEA and Latin America, Deloitte said.
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