Deloitte and Kellogg School of Management Chief Strategy Officer Study: Strategy Evolves to Drive Digital Transformation Efforts has been saved
Deloitte and Kellogg School of Management Chief Strategy Officer Study: Strategy Evolves to Drive Digital Transformation Efforts
Second annual study sponsored by Monitor Deloitte provides insights into the state of the strategy function, the evolving role of the CSO, and the strategic skill sets required to thrive in the post-pandemic world
NEW YORK, April 27, 2021—Deloitte and the Kellogg School of Management today announced the results of the second annual “Chief Strategy Officer Survey,” a study that provides unique insights into the role of the CSO and the evolution of the strategy function. The survey, sponsored by Monitor Deloitte, the strategy practice of Deloitte Consulting LLP, found that 58% of CSOs reported playing a large or very large role in stewarding their companies’ digital transformation efforts. The vast majority (90%) of executives surveyed agreed or strongly agreed that advanced technologies have become important strategic enablers. Yet, only 34% of strategy executives reported that their company is mature or very mature in leveraging advanced technologies and capabilities, such as artificial intelligence (AI), data analytics, machine learning and intelligent automation.
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, Deloitte Consulting LLP, and member of the strategic growth transformation leadership team, Monitor Deloitte.
“The CSO Survey findings show how the strategy leaders of today and tomorrow can enhance their capabilities in non-traditional domains such as technology fluency, digital transformation, and corporate purpose to lead their companies into the next era.”
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 personnel 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 strategy to play a more central role in areas such as structural cost reduction, digital transformation and the assessment and development of new businesses. 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. Strategy executives recognize that technology is fundamentally reshaping market dynamics and creating new strategic possibilities for their businesses, and the CSOs surveyed desire to play a greater role in architecting and orchestrating their companies’ advanced technology strategy. Additionally, 63% of CSOs agreed that advanced technologies will reshape their role, and the capabilities needed to succeed as a strategy executive.
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, clinical professor of strategy and associate chair of the strategy department, Kellogg School of Management at Northwestern University.
“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.”
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 company, while 48% of CSOs said that 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, principal, Deloitte Consulting LLP, and leader of the strategic growth transformation market offering, Monitor Deloitte.
“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
The COVID-19 pandemic changed the demands of the CSO role over the past year, amplifying their contributions to short-term problem solving across operations, the workforce and cost control.
A full 60% of CSOs surveyed reported making their strategic planning cycles more dynamic since the onset of COVID-19, with another 50% of CSOs starting to use scenario planning to prepare for the unknown. As a result, strategy executives are driving outsize revenue and profitability growth for their companies in the face of business volatility and economic uncertainty.
As organizations embark on a phased return to normal, strategy executives are pivoting quickly once again. 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.
To better understand the evolving role of the strategy function, the “2021 CSO Survey” — released in conjunction with Monitor Deloitte, the strategy practice of Deloitte Consulting LLP, and the Kellogg School of Management — surveyed 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.
To navigate the future with confidence, organizations should make the right choices: clear, timely and inspirational choices that deliver growth in a dynamic, disrupted world. Monitor Deloitte’s strategy practitioners combine deep industry insights with cutting edge methods to help leaders resolve their most critical decisions, drive value, and achieve transformational success.
For more information about Deloitte’s strategy practice and the CSO study, please visit our website.
Deloitte provides industry-leading audit, consulting, tax and advisory services to many of the world’s most admired brands, including nearly 90% of the Fortune 500® and more than 7,000 private companies. Our people come together for the greater good and work across the industry sectors that drive and shape today’s marketplace — delivering measurable and lasting results that help reinforce public trust in our capital markets, inspire clients to see challenges as opportunities to transform and thrive, and help lead the way toward a stronger economy and a healthier society. Deloitte is proud to be part of the largest global professional services network serving our clients in the markets that are most important to them. Building on more than 175 years of service, our network of member firms spans more than 150 countries and territories. Learn how Deloitte’s more than 330,000 people worldwide connect for impact at www.deloitte.com.
About the Kellogg School of Management
The Kellogg School of Management at Northwestern University is a premier global business school committed to its mission to educate, equip and inspire leaders who build strong organizations and wisely leverage the power of markets. Based just outside of Chicago, our vibrant, global community of faculty, staff, students and alumni shapes the practice of business and organizations around the world. Kellogg offers an innovative portfolio of programs: five Full-Time MBA programs including the accelerated One-Year MBA and Two-Year MBA options, and joint degree programs with the engineering, medical and law schools; an Evening & Weekend Program; the Executive MBA global network; a Master of Science in Management Studies; and extensive non-degree Executive Education programs.
Early adopter competitive advantage may be fading as artificial intelligence (AI) implementation flourishes
Five new realities chief strategy officers need to embrace