Businesses or companies, in this modern age and at these critical times, are doing everything to stay afloat; in growing their businesses for increased profits and for expansion; as no established business was, in most times, created for free services. It is as a result of this that companies, be they micro, small, medium or large find ways and means to stay in business.
Global StanChart (Standard Chartered Plc), being hit by reduction in profits has caused about 15,000 of its employees to be declared redundant; Ghana’s share of it which runs into about a hundred and over. This is also true of so many international or global companies including Yahoo Inc.
Here in Ghana, for some years now, so many companies have had to lay-off their workers for so many reasons including the ravaging pandemic which has affected all aspects of life, thus leading to businesses making heavy or great losses and not making profits, which is the ultimate aim of any established setup. Even, the so-called NGOs here and worldwide, have got to put strategies in place to stay in business.
It is because of these reasons that businesses – large and small, have researched into how strategic management and the position of the Strategic Officer or Manager is very critical in modern-day business setups for their survival.
Some years ago, strategy was the Chief Executive Officer’s (CEO) job. Since then, as the composition of top executive teams has changed, responsibility for leading strategy development has been shared by more members of the corporation’s most important senior executives or corporate officers and directors. The 1990s saw the rise of the strategic CFO, and more recently many companies have created a chief strategy officer (CSO) position. For chief executives, developing a good strategy is a management challenge that, at its best, involves maximizing the unique contributions of very different executives and, at its worst, requires managing counterproductive tension and turf wars between CFOs, CSOs and, quite often, business unit or departmental heads.
Such friction is destructive – and a huge missed opportunity, because the CFO and the strategy head are far more effective when they collaborate. Together, they have the stature to challenge and influence how the company makes decisions.
In experiences in some companies, creating this ideal partnership usually requires the CFO to become more directly and deeply involved in strategy development. There are two reasons for this. First, the Finance Chief is often first among equals on the board of directors and can help engage the board more productively on strategy. And second, the hard data and empirical mindset that the CFO brings to the table can be invaluable in setting and executing the company’s game plan, especially when it comes to forecasting trends or managing government and regulatory relationships. CEOs understand this: A recent study in some company showed that the best way for CFOs to help their companies succeed is to spend more time on strategy.
Studies have seen three particular areas where cultivating this partnership can have major impact on performance.
1. Ensuring that strategy has money behind it
Companies tend to be timid capital reallocators. On average, they put ninety percent or more of their resources toward the same activities year after year, even though shifting resources as the business environment and company strategies change tends to deliver better, less volatile returns — particularly during down times.
Working together, finance and strategy executives can forge better links between resource allocation and strategic goals. This means, among other things:
• creating a distinct corporate- or portfolio-strategy process, rather than just combining business-unit plans
• encouraging regular conversations among small groups of senior leaders rather than reserving those for annual (or less frequent) encounters around big tables
• ensuring that strategy, budgeting, and capital allocation are fully integrated — a view you can only get if finance and strategy executives collaborate
In another case study, the CSO of a company set up a planning committee that included the CFO to discuss strategic issues, growth opportunities, and funding needs. For each of the promising opportunities — which carried the imprimatur of both the CFO and the CSO — the committee appointed a strategic leader. Each leader was charged with creating a deliberate dialogue with existing business leaders and cultivating their support for more than a dozen related initiatives well in advance of the annual allocation process. As a result, the committee was able to aggressively challenge the expenses attributed to running the business and set aside a defined amount for growing the business instead. Clearly, this result was achieved due to the foresight and trusted collaboration of the CFO, the CSO, and their teams.
2. Tapping the most promising growth spots
Growth is often a function of being in the right place at the right time. A research shows that more than sixty percent of growth comes from riding on favorable tailwinds — that is, doing business in markets that are growing well and where your company enjoys a competitive advantage. Yet fewer than fifteen percent of executives consider such macroeconomic trends in making strategy decisions, and less than a quarter even look at their own financial projections and portfolio performance.
It is a big oversight, and strategy heads, working with finance chiefs, can help correct it. CSOs are usually in charge of their organizations’ trend forecasting, which can point to growth opportunities and looming disruptions. Similarly, they are often the go-to individuals on competitor analysis. These insights are more powerful when combined with CFOs’ traditional strengths in managing the portfolio and the M&A strategy.
3. Embracing the long-term view
Balancing a long-term growth strategy with the demands of increasingly vocal short-term investors is a big challenge for corporate leaders, one that strategy and finance executives can best meet as a team. A strategist’s deep knowledge of regulation, innovation, and trends complements a finance expert’s understanding of cost and revenue, capital allocation, and stakeholder issues. Together, they can propose options that improve the short-term earnings and the longer-term prospects in a way that is compelling to management, boards, and investors.
Now, let us find out what sort of person the typical CSO is made of.
The CSO should have the following Core Required Skills:
Communication Skills Very High
Flexible and Adaptable Very High
Energy Level High
Ability to Synthesize Very High
Work Ethic High
Honesty and Integrity High
Business Judgement High
Self Confidence Very High
Analytical Skills Exceptional
Leadership Ability Very High
Decisiveness Very High
Listening Skills Very High
Research Skills Very High
Writing Ability High
Problem Solving Ability Very High
Ability to See the Big Picture.
One of the most important skills or abilities needed in a strategic function is to see how decisions and choices affect the long-term viability and the overall effectiveness of the organization. The CSO needs to understand the big picture and vision. If he cannot do this he will not be successful in this job.
Not only do people in a strategic role need to see the big picture, they must understand the world from multiple functional perspectives. In order to solve strategic problems and effectively pursue strategic opportunities these people must understand how each function contributes to the grand plan.
Listening and More Listening.
While strategic planners, managers, and consultants sell solutions they must also be able to get to the root problem. Their solutions will only be as good as their understanding of the underlying causes of the problem. Their research efforts will not be complete if they just rely on financial and annual reports. They need to be able to listen to what clients, employees in the firm, and customers are telling them.
Categories and skills of other people in Strategic Roles in the Organization
• Strategic planners are internal advisors while strategic consultants are external advisors. As advisors their roles are fairly unique relative to other managerial career. Only strategic managers have the authority to make and execute strategic decisions.
• Strategic Planner — must be comfortable with numbers, but not obsessed with them, creative, good synthesis and integration skills, excellent communication skills, excellent political savvy, able to dialogue with people from all ranks in the organization.
• Strategic Manager — excellent leadership skills, ability to see the big picture, a visionary, ability to see how the parts relate to each other and the big picture, ability to sell the vision.
. Strategic Consultant — positive self-image, excellent communication skills–especially presentation skills, ability to work in teams, strong professional interests, independent,
So how can CFOs, CSOs, and CEOs foster this partnership? Discussions about expectations and the division of roles are an important start, but they are not enough. One company, for example, encourages collaboration by rotating strategy and finance professionals between the two teams. That enables both sides to see how resources fit with the long- and short-term strategies, and it ensures that the two teams serve one unified goal. The CEO and the board can further encourage collaboration — and deter competition — between the CFO and CSO by working more closely on strategy with both them, forging a team dynamic. In the end, a successful partnership between the two executives will help the CEO, the board, and the rest of the executive team face the challenges of creating growth over the long term and to enhance the profitability of the company.
One organization in Ghana which made very good use of this Chief Strategy Officer position in recent times is the GCB Bank (Ghana Commercial Bank Ltd.), which appointed its present Chief Operating Officer (COO) – Samuel Sarpong – as the Chief Transformation Officer, a position of similar value and importance; during its rebranding in 2013/2014. The institution of this position paid off for this very important exercise of the Bank.
In the light of all these, let me state that the time has come for all sorts of business setups, especially the large corporate ones in Ghana, to institute this very important position of CHIEF STRATEGY OFFICER or to a lesser extent, the Strategy Officer, in order to put their businesses in strategic positions for growth and for profitability for it is because of these that the companies were set up. And, in so doing the country and the nation will benefit in terms of creating employment/job creation and for contributing into the government’s consolidated fund, by way tax payments (a result of profit-making).
Sam Bediako-Asante is the CEO of Sambed Consult, a Business/Investment Advisory firm. He is also a former Banker, a Professional Administrator, and also presently, an accredited SA Specialist of the South African Tourism in Ghana.
Can be reached on 0277518634 or email: [email protected]