Rise of the Chief Strategy Officer

Philip Betbeze, for HealthLeaders Media , November 25, 2013

The CSO most often reports directly to the CEO, but in some larger organizations, he or she might report to the COO, Willig says.

From nice to have to critical

Strategy is a small piece of what the CEO does on a daily basis, so adding a CSO should be a critical priority for helping the organization step out of the day-to-day margin issues and tight battles with operational efficiencies and instead look ahead. What's unusual, says Willig, is that salaries for CSOs, despite their range of responsibilities, still aren't commensurate with traditional C-suite salaries.

"That's a generality," she says, "but think back to about five years ago when the market started tanking, this then-new position was one of the first few to be let go."

After all, you can't focus on strategy, marketing, and clinical integration when you need to make the weekly payroll, but since the financial crisis and recession, Willig thinks CSOs are becoming more valued than ever. In most organizations where the CSO title still exists, it's not a glorified marketing position. Those jobs got washed away.

"Organizations are coming around to the fact that this is a need-to-have role now," she says. "It's the fact that we're operating in a competitive marketplace with much thinner margins than before. That's forcing everyone to take a much more aggressive and progressive view of what businesses they're in and what businesses they need to be in. You can't be everything to everyone; the market is changing so fast that organizations are realizing they need someone whose job is to focus on the future."

That future focus is one reason Julie Carmichael is aboard as the CSO at St. Vincent Health in Indianapolis. Part of Ascension Health, St. Vincent has 22 hospitals in Indiana, including several joint ventures. The organization's fourth CSO in 12 years, Carmichael has a 25-year background in healthcare, starting at the state hospital association in policy and moving on to run an organization that represented 20 suburban health organizations before joining St. Vincent about a year ago. She laughs as she notes that she has never worked in a hospital. That may be a positive, as a big part of her role is helping the organization grow beyond hospital care.

"We're really trying to figure out what our business model of the future needs to look like," she says. "We're trying to evolve our business into a more sustainable model for the long term, so we're moving toward a population health model."

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2 comments on "Rise of the Chief Strategy Officer"

Dike Drummond MD (11/29/2013 at 2:32 PM)
Chief strategy officer from outside of healthcare ... that is just one more member of the C-suite that has no concept of the stresses of the front line providers. With physician burnout rates at an average of 1 in 3 on any given office day regardless of specialty ... and the CSO clueless about what it takes to see patients ... my fear is they will recommend profit goosing moves that simply add to the stress on the doctors and nurses ... then scratch their head and wonder what is wrong with those people. If the CSO brings the mantra that exists in so many other industries - you know, this one: "We hire the best people we can find and take really good care of them" ... they might do some good. If they are just another clueless business mind that thinks healthcare is identical to running a manufacturing business [INVALID]- let's just make sure the current C-suite actually does some strategic planning twice a year. My two cents, Dike Dike Drummond MD TheHappyMD (dot) com

Donald G. Bellefeuille (11/25/2013 at 1:29 PM)
We've all been seeing more and more positions posted for Chief Strategy Officers. On the face of it I should welcome this recognition of the importance of our discipline in healthcare. But I just can't bring myself to do it. I argue in my blog,The StratEx Crossroad: Where Healthcare Strategy and Execution Meet, that our profession has to become more involved in the execution side of the equation. And that's what I don't see in a Chief Strategy Officer. By placing strategy at the center of the title and assigning chief to it you have essentially eliminated any possibility of getting involved in execution. Because any person in this role will want to maximize the amount of strategy they do, right? It's only natural because they are the Chief. And doing a lot of strategy means you are doing next to no execution. Then there is the problem of all the other chiefs popping up: operating, marketing, technology/information, medical, development, etc. How's that cliché go? Too many chiefs spoil something or other. So what is a poor Chief Executive Officer supposed to do? He is a Chief and, presumably, the head chief and execution is part of his title. So who is the Chief Strategic Execution Officer then? The CEO, the CSO, the COO? Who is the chief if everyone is a chief? I said in a previous post (Reorganization Is the Last Thing You Should Do) that the work should determine how you organize. And it's still good advice. The plethora of CSO postings sounds like just the opposite: That organizations are re-organizing themselves before they even know what the work in the new era of health reform entails. So be careful what you wish for as a Chief Strategy Officer. You may find yourself wanting more control over execution because when execution goes badly strategy gets blamed.




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