Staying ahead in the digital age
Traditionally, the role of the Chief Strategy Officer (CSO) has been to facilitate a top-down vision, which supports CEOs to shape strategies that flow down to the business units. However, in order to achieve success in today’s ever-changing business and technology landscape, the role of the CSO needs to evolve.
According to recent Accenture Strategy research, although most business leaders have aspirations for their organisation to become a digital leader, 55 per cent say they do not have an enterprise level digital strategy to support their corporate strategy.
In the face of widespread digital transformation and disruption, CSOs now need to implement forward-thinking strategies built on innovation, transformation and digitalisation.
Beyond this, organisations need to support the evolution of the role in order to target opportunities presented by digital disruption, reinvigorate business models and mobilise employees to deliver results.
Australia slow to evolve CSOs
Australia is among the most progressive adopters of digital means, with organisations offering attractive opportunities to innovate and transform traditional strategies. Yet, unlike global frontrunners, most Australian organisations are yet to fully accept the changing role of the CSO. In order to succeed in this difficult landscape, digital CSOs need to execute strategies at multiple speeds, establish new governance mechanisms to manage multiple growth bets, and use experimentation to verify and refine ideas in the face of constantly changing demands.
While strategies were once based on orchestrating organisation-wide transformation, digital CSOs now need to implement multi-speed strategies, where each part of the organisation moves in the same direction, but at a different pace. To keep up with the changing pace of digital disruption, organisations need to define strategies and capabilities, and proactively engage with start-ups and other companies.
The role of start-ups and fintechs
As technology capabilities and customer expectations change, the effectiveness of multi-year investment is reduced. CSOs in the digital age need to look towards creating strategies based on sequencing multiple bets. For instance, BMW set up BMW iVentures to identify and grow start-ups in the area of mobility services. Investments from BMW iVentures range from electric vehicle charging solutions to car park sharing apps. Similarly, Spanish banking group BBVA established an organisation called BBVA Ventures, which has invested in several start-ups, including SumUp (mobile payment), Radius (customer relationship management), and Taulia (supply chain finance). As start-ups and other innovators enter the marketplace, they create opportunities that can be exploited by incumbents. It is then up to the CSO to utilise opportunities offered by the digital ecosystem and manage the growth bets in various new disruptive organisations.
Don’t fear failure
Finally, experimentation is a key aspect of strategy in the digital era. Executing effective digital strategies is characterised by quick cycles between setting the direction of the company and implementing direct action. For this reason, it is important to execute strategies through intelligent experimentation. More than trial and error, CSOs need to develop a strategic hypothesis and manage the development of prototypes, advancing what works and learning from what does not.
CSOs who fall behind the leaders tend to focus on fixing short-term issues and refuse to participate in digital ecosystems. To remain competitive in the digital world, CSOs need to proactively engage with customers and start-ups and develop digital strategies focused on speed and adaptability.