Strategy Consulting
Strategy consulting has enjoyed decades of prestige as the highest managerial art form. An offshoot of management consulting, it is also referred to strategic advisory or strategy consultancy. Strategy consultants employ practical tools and a hard-nosed assessment of the facts to translate the aspirations of the CEO and boardroom into reality. Strong analytical skills are vital as strategy consultants work closely with a firm’s senior leadership to develop realistic and long term goals.
Private sector clients hire strategy consultants to help them make high-stakes corporate decisions. Questions of strategy function at a higher level and typically ask ‘What do we do?’, rather than ‘How do we do it?’ Such make-or-break decisions are so crucial to the firm’s success and survival that the deep expertise and analytical rigor consultants bring to the table often proves invaluable. In the public sector, strategy consulting is largely geared towards helping organizations develop economic policies. These are subject to a complex matrix of demands, oversight, lobbying, and competing political interests, that can be unravelled only with the help of an objective, analytical eye.
What does a strategy consultant do?
Pure strategy, whereby a consultant is drafted in to help devise a concrete business plan from scratch, is relatively rare. In a sense strategy consultants have become a victim of their own success as the need for strategic planning has been imprinted in the DNA of corporate America since the 1970s. Rather than helping redefine a commercial giant’s corporate goals, strategy consultants are more likely to be hired for their input on a specific strategic decision, at a precise intersection between industry and function.
In the example of a business emerging from a major crisis, or which is under new leadership, strategy consultants may help leaders define a new corporate mission. Companies expanding into new markets might hire strategy consultants to help ensure their overseas adventure is effective, profitable and grounded in favorable analytics. A firm in the midst of a merger or acquisition might seek strategic advice in executing commercial due diligence or drafting a business case for the move that will please both shareholders and regulatory bodies.
Strategic decision making should be present at every stage of the full value chain. A consultant might be deployed to manage commercial sales and marketing strategies. Working on support activities, advisors might develop human capital strategies that zero in on talent management in the HR domain.
Digital strategy has evolved into a vast service area within the strategy consulting domain. Here consultants not only create IT strategies, but comprise the vital link between technological capacity and broader business strategy, devising plans to ensure the client’s business framework can handle the adoption of game-changing new technology.
Strategy consulting services
Given strategy’s ubiquitous presence across every dimension of the corporate decision-making framework, it is often perceived as something nestled within separate, more concrete initiatives. Within the strategy consulting framework these can be divided into eight key disciplines.
These strategy consulting services are Corporate Strategy, Business Model Transformation, Economic Policy, Mergers & Acquisitions, Organizational Strategy, Functional Strategy, Strategy & Operations and Digital Strategy.
Corporate Strategy - Formulating broad, business-wide strategies and end-goals. These might include mission statements and implementation roadmaps. Example: Devising a market entry strategy.
Business Model Transformation (BMI) - Designing a future-proof business model. This rests on strategic transformations of the firm’s internal structures which generate resilience to external change. Example: Shielding client from impact of disruptive technology.
Economic Policy - Advising governments, institutions and public organizations on fiscal and monetary policy. Taxation, interest rates, inflation, and government intervention in labor or housing fall under this umbrella. Example: Impact assessment study for antitrust cases.
Mergers & Acquisitions (M&A) - Strategic advisory in pre-deal phase and managing post-merger integration. Consultants active alongside lawyers and corporate finance advisors. Example: Supporting clients with due diligence work on potential targets.
Organizational Strategy - Designing organizational structures and corporate governance to ensure optimal delivery of broader strategic mission. Involves thorough diagnostics across all structures. Example: Developing human capital strategies.
Functional Strategy - Strategic development for specific functional areas — sales, HR, procurement, finance and others. Example: Developing a roadmap to help realize specific R&D objective.
Strategy & Operations - Interplay between strategic consultants with focus on operational execution, and operations specialists with strategic vision. Example: Plan to rewire organization in order to realize specific strategic ambition.
Digital Strategy - Exploiting digital technology to enable business ambitions. Field has experienced immense growth and covers corporate IT, digital operations and online strategies among others. Example: Developing strategy for cloud transition.
Strategy consulting market
Strategy consulting, in its narrowest definition, accounts for roughly 12% of the revenue generated by the global consulting industry. Big name strategy consulting firms are, however, devoting a decreasing proportion of their output to pure strategy. Firms might present themselves as strategy specialists because the concept still sells, but the big money is now in the huge projects that have their genesis in a strategic decision. This might be a root-and-branch overhaul of IT systems that itself will still necessitate a myriad of strategic decisions in different functional realms.
Strategy is alive and well but defined more by its pervasiveness than as the distinct and prestigious speciality it once was. Consequently the health of the strategic consultancy market is coupled with the strength of the wider economy, with growth spurred by periods of prosperity and hobbled during downturns. In this respect strategy differs from management consulting, which has traditionally thrived even during tough times as clients scramble to get back on the path to success
Strategy consultancy firms
Given the broad overlap between management and strategy, it should come as no surprise that the Big Three management consultancies - McKinsey, BCG, and Bain - also rank as the planet’s premier strategy consultancies. This global elite includes Deloitte Consulting, Roland Berger, Booz Allen Hamilton, and Oliver Wyman among others. Throughout the US there are thousands of smaller and independent consultancies offering strategic advice.
Pure strategy consulting firms focus exclusively on strategy and operations, while most major generalist consultancies will have a distinct strategy practice. Giants like McKinsey still occupy a pure-play strategy niche in the eyes of many clients but in reality offer a deep solution shop that goes far beyond the scope of traditional management or strategy consulting. Examples of generalist consultancies with well-reputed strategy practices include Accenture, Capgemini and LEK Consulting.
