Updated: Mar 17, 2021
Today’s business landscape is increasingly complex and dynamic, as digital transformation, the geopolitical climate and consumer demand have intersected for radical disruption in many industries—including some of Canada's most established and largest GDP contributors.
The financial services industry, for example, is caught in a period of rapid change with the emergence of fintech companies that can provide services at a lower price by bypassing financial intermediaries. While the energy industry is facing continued disruption, accelerated by the oil price decline, regulatory change and obstacles to tidewater access. These growing pains are having a real financial impact on Canadian businesses, and pushing foreign direct investment in the Canadian economy down to some of the lowest levels we’ve seen since 2010.
Where we go from here is up to Canadian companies. There’s no shortage of opportunities for businesses to embrace innovation and reprioritize areas for strategic development. To do so, businesses need to have a senior leader – the Chief Strategy Officer (CSO) – to help the organization understand the changing business landscape so that they know where to steer their strategy in the short and long term. That journey begins with these five steps:
Strategy development (outside-in). Know where the market is headed by examining the external forces at play that will impact the organization and its strategy. For intensely competitive industries – like automotive, financial services and retail – this stage is necessary to ensure the organization is differentiated in some way.
Strategy development (inside-out). Take stock of the organization’s internal tools and capabilities to consider its strengths and weaknesses. Remember that not all companies rank internal capabilities the same. Energy companies, for example, may take a deeper review of portfolio management, acquiring assets for inorganic growth while disposing of underperforming and misaligned assets to maintain strong balance sheets.
Define the roadmap for success. This includes: performance management, initiative prioritization, capital allocation, capability and talent development, and operating models.
Strategic planning. Develop the strategy and prepare for execution. This includes the strategic plan itself, which aids in integrating various components of the strategy together. This will come naturally to organizations that are traditionally process and planning centric. While companies that face rapid change in their industries, such as health and life sciences organizations, may find this stage a little less certain.
Strategy execution. Put all the development, planning and preparation into action. This is where strategy leaders tend to take a step back, but it’s important that they maintain alignment and line of sight with those responsible for day-to-day execution. After all, they know the strategy and desired outcome best.
Having a senior strategy executive dedicated to navigating the changing landscape is like having side mirrors on your car. They help you see your blind spots, predict what’s coming next and optimally position you to make effective changes with strategic foresight.
The decision of whether the CSO will play a more independent or integrated role in the business, and whether it will be focused on strategy formulation or implementation, are considerations that will require careful thought by the executive team, in terms of what makes sense in the organization's unique context. But regardless of the structure, the CSO will play a critical role in helping to build competitiveness in local and global markets
I’ll be sitting down with senior strategy leaders across various industries to explore examples of successful strategy development, planning and execution—and why it’s important for all organizations to follow suit. First up is Court Ellingson, VP Strategy & Research with Calgary Economic Development. View our discussion on ey.com/ca/strategy/dna-of-the-cso and watch out for more in the coming weeks.