Strategy Consulting

Companies face a multitude of challenges when designing and executing corporate strategies. Many fail to distinguish a strategic review from the annual budgeting process, or lack adequate processes for strategic planning. We have a set of core capabilities and tools that can help clients strengthen their strategies at the enterprise level.

Senior managers today face an extremely dynamic environment that requires vigilant scrutiny and nimble management practices. Senior strategy executives, in particular, have pointed to the need to better manage uncertainty in strategy development through flexible and adaptive strategic management practices. This requires on-going dialogue on strategic issues, as well as the ability to execute a new strategic plan. Highly effective organizations have few barriers to reallocating resources and implementing their corporate strategies. However, most organizations struggle to implement their plans, with one year's budget allocation being, by far, the largest predictor of the next year's allocation.

Strategic portfolio management requires companies to generate growth through investment in existing businesses, developing or acquiring new businesses, and exiting unprofitable ones. Doing so effectively requires taking a comprehensive approach to resource allocation. We help clients define an optimal portfolio mix by looking closely at their current mix of assets, their capabilities, and their aspirations in light of the evolving marketplace.

Companies often struggle with their strategic management and planning processes. They might find it challenging to reconcile short-term tactical moves with long-term strategic goals, or have difficulty building the capabilities needed to execute their strategies. McKinsey helps companies strengthen their strategy development processes, enhance overall strategic decision-making, and improve execution. We can support clients in designing tailored solutions to specific issues or in fully redesigning their approach to strategic management and planning.

A critical part of enhancing the planning process is improving overall strategic decision-making capabilities. Left unchecked, subconscious biases such as excessive optimism, groupthink, and loss aversion will undermine strategic decision-making. Our own recent quantitative survey of more than 2,000 executives, as well as our candid conversations with corporate leaders, confirms the significant body of research indicating that cognitive biases affect critical strategic decisions made by even the most experienced managers in the best companies. Behavioral strategy provides a perspective on—and a way to mitigate the impact of—the biases that are often inherent in clients’ decision-making processes.

We also help clients determine who should be managing the strategic planning process. Although CEOs remain ultimately responsible for strategic decisions, in many organizations they are turning more and more to the Chief Strategy Officer to craft and implement successful strategies. But the role’s relative novelty raises critical questions about its function and the degree of ownership it carries. We can provide guidance on the issues unique to CSOs, including the functions CSOs generally perform, processes for successful strategic planning, and working with the executive team and Board.

Using our “Nine timeless tests of strategy”, we are able to ensure that our clients’ strategies can withstand and beat the ever-strengthening forces of change and competition. More than a plan for how to achieve best practices, our approach to strategy development focuses on putting together a formula for our client to win over time.

Recent innovations in our methodology include:

War gaming, which uses role play and modeling to simulate different competitive scenarios, essentially having clients “step into the shoes” of their competitors

Strategy as a journey, where we develop ongoing arrangements with our clients to allow a more variable and long-term engagement on strategy that can evolve over time—an approach that is in sync with how most companies actually make strategic decisions

Strategy walk through, an up-front three-to-four day expert-guided strategy diagnostic that uses our ten tests to pinpoint opportunities.

Strategy academy, a format designed not only to increase the capabilities of the client’s strategy team but also to learn by applying the tools and techniques to a real strategy problem the client is facing, either in a half-day or full-day format.

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