Strategy consulting did not help companies
predict the Brexit vote outcome, the winner of
the U.S. Presidential elections or the U.S. equity
markets’ surge on Nov. 12. But that’s not what
strategy consulting is designed to deliver, notes
ALM Intelligence Director, Lead for Strategy &
Operations Consulting Research Nathan Simon.
That said, strategy consulting is evolving to help
make clients better prepared for contingencies
when unexpected events arise.
CONSULTING: Has political uncertainty—along with
unexpected outcomes, like Brexit and the 2016 U.S.
Presidential elections —highlighted any strategy-consulting
strengths or weaknesses?
SIMON: Although strategy consulting generally has gotten
much better at helping companies deal with contingencies
in a general way, strategy consulting isn’t very useful in
addressing the problem of how to respond when major
uncertainty is actually happening. Strategy is more of a
process. When a company wants to know on June 24 what
the implications of Brexit are—well, first of all, nobody knows
at that moment. Second, I don’t think strategy consulting is
the right tool to use for navigating uncertainty as it unfolds.
Strategy consulting is a highly useful tool, it just has a
different function, which is also evolving.
CONSULTING: How is strategy consulting evolving?
SIMON: It has gotten much better helping companies
deal with contingencies. Strategy consultants are building
contingency planning processes into strategic planning so
that companies develop much more systematic ways of
responding to changes. Strategy as a discipline has become
more of a risk-adjusted tool. Strategy consulting traditionally
favored a very deterministic outlook: You’re at Point A and
you want to get to Point Z, so we’ll define with you what Point
Z is and then we’ll map out the other letters of the alphabet
to get you there. That’s changed as the discipline has
evolved to help companies think about multiple futures. And
when an event occurs, strategy consulting helps leadership
teams: 1) assess and categorize the event; 2) determine the
ways in which the event might affect their strategy; and 3)
have responses in place to adjust for this kind of an event.
CONSULTING: If a company received this type of strategy
consulting prior to a major change event, then, it should be
better prepared to respond?
SIMON: Yes, exactly.
CONSULTING: How else is the discipline changing?
SIMON: The old-school, strategy-on-its-own project is gone.
There’s been a reinvention that has created a number of
interfaces between strategy and things like investor relations,
operations and operational assets, the customer, and
technology. For example, the activist-investor response has
become more tightly bound up with strategy. Historically, this
response was a PR/communications function activity that
was completely divorced from strategic planning activities.
Today, more strategy consultants spend a lot of time helping
clients think about how their strategy is contingent on being
able to access financial resources, the value proposition they
put forward to access those funds, what would occur if they
could not access those funds, and how they would articulate
their case if their access to those funds were at risk. This
type of strategy consulting uses very compelling connections
to tie financial strategy to business strategy. It also includes
highly practical event-response work.
CONSULTING: What are the best opportunities for strategy
firms and practices in 2017 and beyond?
SIMON: When I look across the strategy and operation space
I cover—the kind of work that gets done for CEOs, CMOs,
and COOs—I see two core opportunities. One is that clients
still want to know something about the world outside of
their four walls that they don’t know and feel they should
