Research - 10.12.2013 - 00:00
12 December 2013. For the 2013 CSO Survey, the IfB-HSG and Roland Berger Strategy Consultants interviewed 150 chief strategy officers (CSOs) of the biggest European companies. The results reveal that the significance of CSOs is increasing further and that they have to make a growing number of decisions which require sound judgement.
Experience and networks inspire success
Most of the CSOs interviewed hold an academic degree, and many attended international top universities. Six out of ten have already worked in a strategy department or in general management and thus acquired an important measure of experience. “Successful firms more often have experienced CSOs who have been working for the company for a long time,” says Academic Director Prof. Dr. Markus Menz from the Institute of Management of the University of St.Gallen.
27 per cent of the chief strategy officers interviewed have worked in their respective companies for more than ten years. They are familiar with all the processes and possible weak points, and they have a strong network inside the firm. This creates trust among staff and makes frequently difficult questions easier. CSOs thus increasingly become mediators between individual departments and the executive board.
Profitable growth is the top priority
Driving the company's strategic development is top of the CSO's agenda. But a new trend is emerging: Companies are making strategic decisions first and foremost to enable profitable growth. Gaining market share at the expense of profitability is passé. Whereas before the financial crisis there were typical cycles of growth followed by phases of consolidation, now CSOs need to rethink their approach and sustainably improve earnings by means of efficient growth.
Using long-term planning
Although time pressure on companies will continue to increase along with a greater degree of economic uncertainty, successful companies have one thing in common: their corporate strategy is designed for the long term. They act more cautiously and do not chase every fleeting trend, but instead plan their business model for the next two to three years. 75% of the companies surveyed take at least three months to make important strategic decisions. And they need over ten months on average for strategic implementation.
Companies need to become more flexible
Regarding the future, the CSOs surveyed agree that going forward it will be even more important to build up skills, processes and structures in the company to enable the organization to adapt flexibly to new market conditions. What is especially important is innovation management, the type of business model and quick implementation of this model. Topics such as big data and corporate social responsibility are (still) less relevant to CSOs.
Although flexibility is becoming more important to companies, most avoid taking overly high risks and plan cautiously. "It is more about formulating a strategy that makes the company more flexible but avoids unnecessary risks," Menz summarizes. The challenge for CSOs is to find the right balance.
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