It is hardly surprising that many of the CSOs at software and services companies are veterans of high-level strategy consulting firms, such as Bain, Boston Consulting Group, Index (now the management consulting arm of Computer Sciences) and McKinsey.
Typical of this career path is Steven Hoffman, a former Bain and CSC Index consultant who took the newly created CSO post at Sapient last January. His major task: to help co-CEO Jerry Greenberg manage more effectively in a skittish market.
Hoffman sees his role as twofold: help Sapient think through its own internal strategy, and make sure that every piece of work the company does for its clients reflects that "strategic competency."
Put another way, Hoffman wants Sapient to avoid the dreaded "cobbler's children" syndrome that has doomed many a technology consultancy. Why should any customer, particularly in this grim economic environment, take advice from a consulting firm that can't articulate its own business strategy? "I'm responsible for making sure that we are as data-driven in how we think through our own strategic issues as we advise our clients to be," Hoffman explains.
Jim Champy, VP of strategy at Perot Systems and one of the architects of the corporate "reengineering" movement of the early 1990s, says another factor driving the surge of interest in the CSO is rapid technological innovation. "I think companies and senior executives are having a difficult time figuring out where technology is going, and there is a revived interest in strategy from a futures perspective," says Champy, who unofficially wears the CSO title at Perot Systems. "The job of the CEO is getting more intense, and the CEOs can't spend as much time as they would like to looking ahead."
However, cautions Champy, as valuable as the CSO may be to the well-being of a technology company, the role should not overshadow the CEO, who remains the principal corporate strategist. "The CSO role is to support the CEO and the board," concludes Champy.
Michael Treacy, a co-founder of consulting firm Gen3 Partners, believes the CSO is such a crucial job that he assumed that title himself. His reason: Markets are so much more volatile that it requires a separate individual to make sure strategy keeps pace with rapid change.
At Gen 3 Partners, which specialises in helping established companies create new spin-offs, Treacy, in his role as CSO, maintains a clear boundary between himself and fellow founder and CEO Jim Sims.
"Jim is the emotional leader, the kind of entrepreneur people want to work for. He is driv ing the thinking of what we might, or might not, do in the system integration field," says Treacy. While Sims rallies the troops, Treacy sees himself taking on a shifting set of responsibilitiesâ€""master influencer" of client expectations, internal company seer, whatever is required at the time.
Within large, established tech companies, the CSO is viewed as a sort of corporate linebacker, tackling threats from emerging companies or disruptive technologies. That is the role Cisco Systems has in mind for Michaelangelo Volpi, its mergers and acquisitions practice leader who recently added the CSO title to his job responsibilities.
Similarly, distributor Ingram Micro recently added CSO responsibilities to the CIO job. Guy Abramo, the recipient of the joint title, says Ingram believed that with the proliferation of marketplaces, "it just got so complicated that we needed to put a new focus on understanding the industry structure ... and take a more formal approach [by creating] the chief strategy officer job."
Abramo says he will guide Ingram in its adoption of a marketplace approach to doing business. "Most of what drove distribution in the past was based on how we brought the vendors' products to market. We didn't look at the source of the demand for the technology products," Abramo explains. "We want to really understand the market for products and services as it relates to the IT supply chain and [the] customer set, and look at the competencies they need rather than just pushing this or that to market." Abramo, unlike other CSOs, will have not only a strategic planning organisationâ€"which analyzes customer behaviors and market demandâ€"reporting to him, but also the company's worldwide marketing group.
No free lunch
Although the word "strategy" does conjure up images of pipe-smoking consultants in three-piece suits who live in a world free of accountability, sources say the CSO will not have the same luxury. "They will have to be accountable for the choices they make," says Champy.
Richard Putz, CSO and CFO at C-bridge Internet Solutions, says as CSO he expects to be very much on the front lines, working with the company's account execs when pending deals need to be escalated to the next level. Putz, who took on the CSO job nearly two years ago, says he is typically brought in early in the process to help the sales team build its business case for the solution sale. Secondarily, the CSO may be called in toward the end of the process to answer the client's detailed questions about the efficacy of the solution.
Some tech services companies, however, have struggled to implement the CSO post. Glenn Yeffeth, CSO of integrator Lante, says a company must get beyond "flirting" with the idea, and take corporate strategy to its heart.
For example, Yeffeth spends a relatively small amount of time advising CEO Rudy Puryear and the Lante board on how to shape the company's strategic direction. The bulk of Yeffeth's time is taken up with building Lante's ability to offer strategic services to clients, and getting the entire Lante organization to think strategically.
"We are helping clients make up their minds. It [strategy] requires long-term thinking and makes you a valuable partner," says Yeffeth. "Clients know they will get a business result and not just a technology solution."
Yeffeth, who was formerly with DiamondCluster International, says he spends three days a week with clients, helping to generate sales leads and advising those clients.
While there is a slow adoption of CSOs in the tech-services space, Perot's Champy sees more and more companies adding that role to their management roster. "IT services firms will be really challenged in the next six to 19 months," says Champy. "I think they will create strategy roles if they don't have them," he adds.
There is no question that the new breed of CSOs are an enthusiastic group with a clear and important task ahead of them. But like the CIOs before them, if they don't ultimately help make their companies' top and bottom lines shine, they'll end up marginalized, if not out on the bread line. In such a worst-case scenario, the CSO acronym could come to stand for "couldn't see opportunity."
