The Agility-Creating Chief Strategy Officer: Bringing Speed to Change

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Today’s environment of speed and complexity demands an agile organization. Yet many CSOs admit to struggling with their ability to create agility in their organizations. What can CSOs learn from each other about how best to accelerate change and make their organization more agile? While there’s no perfect solution, through research and discussions involving more than 60 strategy leaders, Accenture identified a set of activities that CSOs can undertake to help create agility, from promoting change and making change happen to building new skills for long-term success.

Recent Accenture research identifies potential ways CSOs can help to create the agility needed in their organizations to make rapid course changes in today’s volatile environment.

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What’s a CSO to do? The role of the CSO has become an organizational staple in today’s swiftly changing business environment. What exactly does the CSO do? To be sure, CSOs must lead efforts to execute strategy. But beyond this broadly defined mandate the requirements for the role often remain only loosely articulated.

The urgency of defining the role and identifying best practices and the optimal skill set seems to have increased in recent years as industries in many regions have been called upon to address levels of volatility that were previously unknown. Gone are the days in which strategic execution meant setting the course for a three- to five-year plan and tracking the results. Today, organizations often must make strategic agility part of their corporate fabric if they are to respond swiftly and effectively to the ever-present threats and uncertainty in their operating environment. For CSOs, this may mean finding ways to create agility, so that their ocean liner-like organizations can maneuver through rapid course changes. To do so, CSOs must draw upon skills to develop and sell ideas, quickly translate them into action, and maintain momentum.

This year, Accenture launched its second effort to explore how the CSO’s role manifests itself across a broad spectrum of organizations and to better understand how the role is evolving. This research seeks to build upon Accenture’s pioneering 2007 study of CSOs as a top management role. The results of that research were presented in “The Chief Strategy Officer,” published in Harvard Business Review.1 Our second effort began with a brief exploratory survey as the first step of a broader five-year status assessment of the role (see “About the Survey”).

A set of best practices has emerged from our research that should provide some clarity to CSOs in their quest to identify effective approaches for the range of responsibilities from ideation to execution. However, our research also revealed an emerging disconnect between the skill set organizations currently seek when hiring a CSO and the role’s evolving requirements—we found that the skills of persuasion are gaining in importance over analytical and problem-solving skills.

About the SurveyTo identify topics to examine in the survey, we initiated the 2012 research by conducting exploratory conversations with a small number of Accenture CSO Circle members. This helped us identify new aspects of the role which are becoming increasingly critical to success. We then conducted an online survey of 67 participants to assess the relative importance of these new aspects of the CSO role—with 10 CSO Circle members and 57 senior strategy executives of large companies (two-thirds having revenues of more than $5 billion) participating. The executives came from companies in Consumer Goods and Retail, Telecommunications, Electronics, Industrial Equipment, Financial Services, Energy, Transportation, Life Sciences and Hospitality. The participants from the wider constituency all focused on strategy implementation, although not all had CSO job titles. The wider constituency’s opinions tended to mirror those of CSO Circle members.

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Chart shows average ranking as a percentage where all ranking a factor first out of five choices would be 100% and none including the factor in five choices would be 0%.

Hiring profile Future learning

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Analytical approach

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Persuasion

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Are CSOs ready to create agility? The role of the CSO emerged just as the global economy was entering a period of dramatic, if not unprecedented, upheaval. During the past five years, large long-established corporations have found themselves in the midst of a maelstrom of volatility resulting from economic uncertainty, the arrival of more nimble competitors, and the emergence of newly empowered consumers. In response, many organizations have sought to become more agile, enhancing their capabilities to respond rapidly and effectively to the changing business landscape.

One objective of agility is to respond to market shifts faster than competitors do.2 This can include rapid decision making, testing responses on a pilot basis, and then scaling for a broader response. It may also include pre-set “plays” where management teams have agreed ahead of time how they will respond to certain situations—for instance a price drop by a competitor or the merger of two companies in an industry. Once

initial market changes have been identified, organizations often find that they need to adapt by reworking some of their business processes. Some may tailor their organizational structures to better handle ongoing changes in their markets.

Given their position as the leader of strategic execution, CSOs should be playing a critical role in their organization’s efforts to create and institutionalize agility. But are they ready? Our research suggests that many CSOs are not yet sure how best to fulfill their responsibilities in accelerating the speed of change in an organization. One key issue that emerged from our initial round of interviews was a desire to understand the skills and tools required for a CSO to succeed in today’s market conditions. Approaches for embedding innovation strategies in an organization were also a key concern, as was understanding the execution techniques that work for “insiders” and overall CSO best practices.

In the midst of this uncertainty, the CSOs we talked to acknowledge that the emphasis within their skill set is

Figure 1: CSO Skills—hiring profile and future learningCommunications and consensus building remain paramount, but other relationship building skills will be needed more than analytical skills.

changing. Comparing the skills CSOs say they were hired for with the skills they seek to improve on now reveals that while communication and consensus building will remain paramount, analytical skills will become relatively less important going forward, replaced by interpersonal sales skills (see Figure 1). Conflict management and persuasion take the third- and fourth-place slots, respectively, in the future skill set, replacing problem-solving abilities and an analytical approach in the hiring skill set. This suggests that analytical skills and industry experience may be necessary but insufficient when seeking out a CSO. The power of persuasion will become increasingly important in a CSO as organizations seek to become more agile.

What’s more, CSOs’ efforts to help organizations become more agile may be impeded by limitations imposed on their role. Most CSOs who responded to our survey (57 percent) told us that their “room for maneuver” was somewhat limited. On the positive side, 42 percent of those CSOs consider themselves to have complete or substantial room for maneuver.

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Practical capabilities for accelerating changeTo clarify the practical capabilities for accelerating change, we’ve organized our survey findings into a framework of three primary activities for CSOs: thinking about change; making change happen; and building skills for long-term success.

Promoting Change: Seeding—and Selling—Ideas To begin the process of creating change, CSOs need to plant ideas for business change effectively, and persuade business leaders to adopt them. Our research revealed best practices for fostering engagement with business leaders in thinking about change, including appropriate forums, participants and information.

1. Select the right forum.To engage business leaders in discussions, one-on-one meetings can be extremely effective, but small groups can play a role too, especially when the company faces a serious external threat. Eighty-five percent of survey respondents told us that the one-on-one meetings they request with business leaders are very or extremely effective. A similar percentage (67 percent) said small-group gatherings were very or extremely effective, although a much smaller percentage (16 percent) said these were extremely effective. However, small-group gatherings were considered to be more effective as perceived threats to the company increased, suggesting that greater collaboration and consensus building are required in high-threat scenarios. Getting a time slot at regularly scheduled management meetings was considered the least effective approach—only one-third of respondents said this approach was very or extremely effective (see Figure 2).

2. Target the most crucial ears. Whom should CSOs include in meetings? Involving other senior executives, such as business heads, was considered very or extremely beneficial by 78 percent of respondents. However, involving more senior executives, such as the CEO, also ranked high. It was considered very or extremely beneficial by 69 percent of the CSOs we surveyed. The participation of the most senior executives was considered more beneficial as perceived threats to the company increased, suggesting that CEO involvement in small-group meetings under such circumstances may be critical. Our findings suggest that CSOs should be cautious about inviting an expert, consultant or “guru” to attend a meeting—only 37 percent of respondents judged their participation to be very or extremely beneficial.

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Figure 2: Techniques for engaging business leaders in discussionsOne-on-one meetings most likely to be effective, but small group gatherings that the CSO initiates can play a key role, too.

3. Provide the right information.We also asked respondents what kind of information CSOs should use to engage business leaders in strategy discussions. We found that presenting new data, particularly on disrupters, carries the most weight—82 percent of respondents said it is very or extremely useful to introduce data on trends that could threaten or disrupt the business. Respondents also said it was very or extremely useful to present new data and insights they have discovered about the business (78 percent) and to ask executives leading questions about their concerns (75 percent).

On a cautionary note, only 55 percent of respondents said that presenting their own analysis of recent performance was very or extremely useful—which suggests that a data-intensive presentation on disrupters and competitive threats will be more effective than vivisecting the business’s current performance (see Figure 3).

A particular type of data was found to be especially useful with respect to the high-threat scenario: In general, 69 percent said that it was very or extremely useful to engage business leaders by revealing the gap between the company’s practices and competitors’ best practices. But that figure jumped to 91 percent when the company faced a high threat. Indeed, demonstrating that competitive threats are increasing ranked first when we asked respondents the best way to create a sense of urgency when engaging business leaders. Ranked second was making clear the significance of declines in business performance, or the inability to sustain current successes. Distant runners-up were articulating a “burning platform” and alerting colleagues to a disrupter on the horizon.

Our discussions with CSOs brought to light another critical issue with respect to providing the right information to promote change. Data may support determining when and where to compete, such as the

right time to enter a new market. But the research suggests that why and for who are often the more decisive issues. For example, executives may want to know how a growth initiative will benefit customers, shareholders or employees, and how it furthers the organization’s mission and reflects its heritage. CSOs may find it beneficial to promote change initiatives within the context of the organization’s broader goals and traditions. If they do not, efforts to create agility may be regarded as a threat to the company’s core values.

The research also suggests that CSOs should be prepared to respond to concerns that agility will make it harder for the organization to achieve its growth commitments. Indeed, participants told us that resistance to change can often be linked to fears that the resulting instability will impede the attainment of growth goals. Persuading the organization to establish more flexible growth goals can be a critical factor in creating receptiveness to agility.

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Figure 3: Ways of engaging business leaders in strategy conversationsPresenting new data, particularly on disruptors, carries most weight.

4. Measure results and make leaders accountable.In our discussions with survey participants about engaging business leaders, measurement and accountability emerged as key themes. One participant emphasized the importance of “using a dashboard of data to show how gaps and trends” are affecting strategic objectives. Another cited the value of mandatory participation in monthly meetings by executives from each business function, so that they could “review results, re-confirm strategic initiatives, fine-tune practices, and discuss potential activities that could lead to changes in the initiatives.” One benefit of such meetings can be sharing “approaches from other regions” that executives were not aware of.

To promote accountability, one large multinational company (annual revenues exceeding $10 billion) conducts an annual “Strategy Blueprint” review with each business leader in the presence of the CEO and other top executives. The organization uses the review to “track performance attainment against the strategy metrics” and conduct performance dialogues. “Less people – more ownership” was the theme for promoting effective meetings articulated by one participant. Many CSOs we talked to also stressed the importance of creating “an open learning environment and culture” to avoid the perils of group thinking.

Making change happen: moving from ideas to actionThe research found that the transition from abstract ideas to concrete actions is often propelled largely by CEO commitment, as well as the commitment of resources from the organization. To maintain momentum, CSOs should seek to embed change actions into the organization’s normal work and promote an environment in which CEOs reinforce their initial commitment to the strategic plan.

1. Lay the foundation through CEO support and resource commitments. In generating action from a strategic plan, one factor emerged in our survey as most critical: the CEO’s commitment to change.

Clearly, it is often beneficial for CSOs to facilitate the public endorsement of strategy initiatives by CEOs and make the best use of their support. Resources alone often won’t make things happen, although they are, of course, important. The commitment of resources (that is, money and people) from the organization ranked second in our survey as a way to generate action. Early in the process, CSOs should consider making the case for support of strategy initiatives through commitments of people’s support and time as well as company funding. The support of top management is so important, it appears it can trump history. We found that many of the CSOs we talked to do not consider building on previous successes to be an effective way to generate action (see Figure 4).

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Figure 4: Generating action from a strategic planThe critical factor in generating action is CEO commitment to change.

Our discussions with CSOs revealed additional insights regarding resources. CSOs observed that enabling agility often requires uncovering stranded or buried resources, which if freed up can allow the organization to respond faster and more flexibly to challenges. Persuading business leaders to identify and release these resources can be critical to the CSO’s success. But CSOs should not regard obtaining resource commitments as a signal to expand their portfolio of initiatives too aggressively. It can be important to avoid spreading these resources among too many initiatives—“splitting the penny 17 ways” as one participant put it. CSOs should maintain their focus on critical initiatives in applying resources, to avoid over-committing the organization and underfunding other important projects. This may mean ending some existing projects to provide adequate resources for higher priorities. Knowing “what to stop” is as important as knowing “what to start,” said one participant.

2. Embed execution into the organization.Our research shows that integrating change actions into the organization’s regular activities is the most effective way to build and maintain momentum in the right direction. We asked participants to rank techniques for reducing management distraction and maintaining forward momentum in executing a plan. Integrating execution measures with normal business performance monitoring and measures was considered most effective overall (49 percent very effective; 30 percent extremely effective) (see Figure 5). Execution measures should be embedded in the organization, rather than being an overlay on its activities. As one participant put it, CSOs should “target milestones that synchronize with corporate growth objectives.” Another participant recommended creating a dedicated unit to “help project manage and drive high impact strategies with the business leaders.”

Creating the right tempo for change was cited by participants in our discussions as a critical success factor for embedding execution. Many organizations have an inherent tempo at which they can change, and CSOs must take care not to pursue change at a pace that may be faster than the organization can accommodate. The ability of the organization’s extended network of sales and distribution channels to keep pace, for example, may need to be considered when identifying dependencies and determining an appropriate sequence for initiatives. Over time, CSOs may be able to gauge the organization’s ability to accelerate the tempo of change, and ramp up the pace accordingly. In addition to finding an appropriate pace, CSOs should also try to determine the right amount of change to pursue, breaking change into “digestible portions,” as one participant put it. Ultimately, this may mean balancing the pace of change and the number of initiatives pursued against the organization’s ability to change.

3. Reinforce messages.It can be critical for the CEO to maintain their support of the strategic plan throughout the execution phase. Respondents considered regular reinforcement messages from the CEO to be valuable for maintaining momentum (58 percent very effective; 21 percent, extremely effective)—and this was especially true in the face of extreme threats. In communicating why changes need to be made, “the chain begins with the CEO and ends with the people on the shop floor,” one participant told us. CSOs should be cautious about relying on regular meetings with the CEO. These ranked lowest in our survey (57 percent very or extremely effective) as a way to drive action.

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Figure 5: Techniques for reducing management distraction and maintaining forward momentumIntegrating execution measures with normal metrics and regular reinforcement messages from the CEO are most effective.

Building skills for long-term success: perfecting the power of persuasionMany CSOs’ skills today are well matched with the current hiring-profile skill set, but our survey suggests that, as the role evolves, CSOs’ skills will need to evolve along with it. Specifically, conflict management and persuasion are becoming increasingly important relative to analytical skills (see Figure 1).

What skills do potential CSOs need to get hired today? The top reasons cited by our respondents were clear and effective communications, consensus building, problem-solving abilities, and an analytical approach (see Figure 6).

Looking ahead, however, we found that consensus building and conflict management are key skills that need to be developed further—these ranked higher when we asked respondents what skills would need to be acquired in the future. However, it appears the ability to communicate clearly and effectively will continue to be an essential skill (see Figure 7).

The research suggests that persuasion skills are among the CSO’s skills that are proving most valuable—and this won’t change in the near future. CSOs need the ability to gain “consensus throughout the organization, but also the courage to take a stand,” one participant told us. They also need “the ability to motivate,” said another.

Given the suggested need to improve certain skills, what’s the most effective resource for learning about CSO best practices? Fifty-seven percent of respondents told us that one-on-one conversations with other CSOs were very or extremely useful. “Identifying peers through networking,” as one respondent told us, is essential. Reflecting this need, CSO conference roundtables were considered very or extremely useful by 43 percent of respondents.

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Figure 7: CSO Skills—to be strengthened in futureConsensus building and conflict management and persuasion are key skills that need to be developed further for the future.

Figure 6: CSO Skills—reasons for being hiredClear communications, consensus building, problem solving and analytical approach are top reasons for being hired.

The attributes of the agility-creating CSOBased on our findings, what are the attributes of the agile CSO? A set of key takeaways emerge. Agility-creating CSOs:

•Kick-starttheideationprocessbyconvening smaller meetings exclusively for that purpose—either one-to-one meetings with business executives or small-group meetings that include the right participants at each stage.

•Usedataoncompetitorsanddisruptivetrends in evidence-based presentations to demonstrate the nature of a challenge.

•Promotechangewithinthecontextofthe organization’s broader goals and traditions by presenting information to support “why and for whom” as well as “when and where” to grow.

•Seektoestablishflexiblegrowthgoals,so that the instability caused by change is not regarded as a threat to achieving rigid targets.

•Embedthestrategicprocessintotheorganization by integrating key change measures into regular management reporting and ensuring accountability among executives.

•Balancethepaceofchangeandthe number of initiatives pursued against the organization’s ability to absorb change.

•UseCEOsponsorshiptogiveauthorityto their initiatives, and ensure that the CEO reinforces support throughout the process to maintain momentum.

•Getvisiblecommitmentsofpeopleandmoney from the organization at an early stage.

•Maintainfocusonprioritytopicstoavoidspreading resources among too many initiatives.

•Developanduseconflict-managementand persuasion skills to keep things moving forward in the direction they’ve set.

•Connectthemeasurementandperformance reporting of initiatives with these processes in the rest of the organization to accelerate uptake and success.

Ultimately, and perhaps paradoxically, the CSO must project a sense of stability and certainty to create agility most effectively. If agility is perceived as purely a source of instability, business units, functions and employees may not embrace it, but instead retreat into their “silos” and stick to their established ways of doing business. The CSO must try to help the organization gain confidence in its ability to be agile by respecting the pace at which change can be absorbed and helping to support the organization’s aspirations and values by bringing speed to change.

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1 “The Chief Strategy Officer” by R. Timothy S. Breene, Paul F. Nunes, and Walter E. Shill, Harvard Business Review, October 2007.

2 For an in-depth discussion of agility, please see “Corporate agility: Six ways to make volatility your friend” by Walt Shill, John F. Engel, David Mann, and Olaf Schatteman, Outlook, 2012, No. 3.

http://www.accenture.com/us-en/outlook/Pages/outlook-journal-2012-corporate-agility-six-ways-to-

make-volatility-your-friend.aspx

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About AccentureAccenture is a global management consulting, technology services and outsourcing company, with approximately 259,000 people serving clients in more than 120 countries. Combining unparalleled experience, comprehensive capabilities across all industries and business functions, and extensive research on the world’s most successful companies, Accenture collaborates with clients to help them become high-performance businesses and governments. The company generated net revenues of US$27.9 billion for the fiscal year ended Aug. 31, 2012. Its home page is www.accenture.com.

For More InformationTo learn more about the Accenture CSO Circle, please e-mailCSO.Circle@accenture.com.

Copyright © 2013 Accenture All rights reserved.

Accenture, its logo, and High Performance Delivered are trademarks of Accenture.

About the Accenture CSO Circle and C-Suite NetworksChief strategy officers and equivalent strategy executives face considerable challenges as they strive to help their organizations compete in a dynamic and often volatile global business environment, yet there are few ways for CSOs to interact with their peers that can lead to a thought-provoking exchange of ideas. In 2009, Accenture founded the CSO Circle to provide a unique forum for select strategy executives in which small groups of members convene virtually and in person to determine the topics to share, issues to debate and the best ways to interact. Accenture hosts peer communities for other members of the C-Suite, including:

• COO Circle for chief operating officers and equivalent operating executives.

• CFO Circle for chief finance officers and equivalent finance executives.

• CHRO Circle for chief human resources officers and equivalent HR executives.

• CIO Council for chief information officers and equivalent IT executives.

• CPO Circle for chief procurement officers and equivalent procurement executives.

• CSCO Circle for chief supply chain officers and equivalent supply chain executives.