Strategy Consulting

Whenever I told folks I worked in strategy consulting, folks unfamiliar McKinsey, Bain, BCG, and also the alternative companies would generally provide Pine Tree State associate degree odd look. “What will that mean, exactly?” they’d generally raise. To clear up this question once and for all, this text provides:

•  A definition of strategy consulting
•  Why firms rent strategy consulting companies
•  an summary of key strategy consulting companies
•  problems strategy consulting companies tackle

1) A definition of strategy consulting:

At its core, business strategy is all regarding earning superior profits and beating the competition. Strategy consulting is that the trade and follow of aiding businesses with high-level choices that change them to try to to this. Strategy is distinct from operations therein strategy addresses the question “What will we do?”, whereas operations addresses the question “How will we do it?”.

A strategic question would possibly be: “What ought to we have a tendency to do to differentiate ourselves from the competition?”, whereas associate degree operational question would possibly be: “How will we have a tendency to operate this plant most cost-effectively?” Operational queries cowl several siloes of the organization, from producing to that to human resources to finance. Strategic queries operate at a better level, prioritizing resources among the competitive  demands to maximise investor wealth.

2) Why firms rent strategy consulting firms:

A common question that strategy consultants face is, “Why don’t these firms try this themselves?” so, if the queries ar thus crucial and strategic, it would appear that they shouldn’t be outsourced. Clearly, executives at shopper companies don't renounce their decision-making responsibility to consultants.  Rather, they incorporate the extra input into their decision-making method.

Some queries ar thus vital that they merit an additional dose of talent and mental capacity to make sure that they’re answered properly. obtaining the solution wrong might devastate the corporate or mean the corporate misses nice opportunities to their competition, thus it’s price payment one or two million greenbacks making certain that they catch on right.

Executives ar usually tied-up within the regular choices of the corporate and easily can’t dedicate the time and mental resources needed to urge to the correct answer. Executives’ days ar occupied with conferences, operational crises, personnel problems, client relations, and dozens of alternative obligations. a technique consulting team, however, will devote sixty hours (or more) every week targeted on respondent one vital question.

Another advantage of mistreatment strategy consulting companies is that they'll have a deep experience during a given trade or topic space. whereas a corporation would possibly fold producing plants one or two times a decade, a technique business firm might need worked with dozens of firms who’ve been through that method. By having this experience obtainable, shopper companies will feel higher regarding obtaining the work well done.

Sometimes it’s merely prohibited for a corporation to figure on the queries a technique consulting team tackles. as an example, once 2 competitors conform to merge, however haven't however completed the group action, it’s prohibited to share info between the businesses. Sharing info regarding rating or alternative sensitive problems will violate anti-trust legislation. Technically, these firms ar still competitors and ought to not be colluding.

Any variety of things might sink the deal, however the businesses wish to urge a mount their post-merger integration. So, strategy consultants will are available in and operate during a “clean room” surroundings, wherever they'll receive the information from each parties, determine activity opportunities, and acquire a mount seizing these opportunities once the merger is complete.

The cynic would possibly say that strategy consulting companies ar brought in once associate degree govt desires to “wash his hands” of a moot call or prove that he’s right. (e.g. “It’s not my fault the strategy didn’t work; the fellows at BCG aforesaid this might create United States a billion dollars!”) whereas bound executives will have associate degree agenda, esteemed companies confirm what the information recommend is best for the corporate and artfully navigate the underlying politics. Indeed, generally the sensitivity of a problem may be a supply of the strategy consulting team’s value-addition. Having an outdoor perspective may be priceless to chop through  politics and produce the foremost relevant facts to lightweight.

If all companies operated dead — and every one their information clearly light-emitting diode to conversant choices — the strategy consultant’s job would be uncalled-for. but within the universe, businesses operate sub-optimally, and their information ar usually all mussy or not without delay usable sure enough choices. raise any strategy consulting analyst regarding the standard of their client’s information, associate degreed you’ll get an earful! In many ways company underperformance is that the bed for strategy consulting engagement opportunities.

3) an summary of key strategy consulting firms:

McKinsey & Company. McKinsey is essentially thought to be the godfather of the strategy consulting trade. Headquartered in ny with seventeen,000 staff unfold across nearly one hundred offices worldwide, they’ve got the status that produces them the envy of each alternative firm. The alleged misconduct of its former Chairman, Rajat Gupta, could tarnish the firm’s name, however their bequest is probably going to endure.

The Bean Town Consulting cluster. BCG encompasses a status slightly below McKinsey & Company, and will similar work with senior executives. Headquartered in (you guessed it) Bean Town, with over seventy offices and four,500 staff, they’re noted for having a rather additional tutorial approach, and emphasize thought leadership.

Bain & Company. Bain encompasses a status similar to BCG and fights for constant add boardrooms across the globe. Headquartered in Bean Town, with 5,000 staff, they emphasize shopper results fanatically. Recently Bain has gotten plenty of press with presidential candidate Mitt Romney, UN agency worked at each Bain & Company and Bain Capital — a totally separate entity that’s a non-public equity, as opposition consulting, firm.

Booz & Company. Booz & Company accustomed be called Booz Allen Hamilton, however engraved out its us government practices in 2008. The U.S. government business firm retains the name Booz Allen Hamilton, whereas Booz & Co focuses totally on businesses. Booz is headquartered in ny with three,300 staff unfold across sixty one offices.

Deloitte Consulting. Deloitte consults in 3 key areas: human capital, strategy & operations, and technology. They’re headquartered in ny with fifty offices worldwide.

Monitor cluster. supported by Michael Porter (of Porter’s 5 Forces fame) and company in 1983, Monitor has full-grown its Cambridge, MA-based practice to one,500 staff across twenty nine offices.(Note: Monitor was noninheritable  by Deloitte in Nov, 2012.)

 jazz musician Wyman. a region of Marsh & McLennan firms, jazz musician Wyman operates in over fifty cities with three,000 staff. They draw on the experience from their sister firms at intervals the Marsh & McLennan portfolio and ar noted for his or her money acumen.

Roland Berger. supported in Munich in 1967, Roland Berger is happy with its European heritage. they supply strategy consulting through over a pair of,000 staff in forty six offices.

L.E.K. supported in London in 1983, L.E.K. tackles queries of strategy with 900 staff in twenty offices.

4) problems strategy consulting companies tackle:
Strategy consulting companies address a good sort of problems across each trade. Indeed, several companies ar loosely organized into matrices. On one  dimension, Partners have deep experience during a specific kind of business question. On the opposite axis, Partners have a broad understanding of all the key problems facing a selected trade.

For example, on the trade axis, a firm would possibly divide itself by:

    Airlines
    client merchandise
    money services
    Healthcare
    Industrial merchandise
    Media
    Nonprofit
    Oil & gas
    Public Sector
    Retail
    Technology
    Telecommunications
    Utilities & energy

While on the problem axis, the firm would possibly divide itself by:

    finance
    Mergers & acquisitions
    Operations
    Organization
    Performance improvement
    Risk
    Sales & selling
    Strategy
    property
    Technology

Pick associate degree intersection (e.g. risk and airlines), and you’ve got the place to begin for forming a consulting team and engagement.

Because of this big selection of problems and industries, “strategy consulting” can seemingly invariably sound alittle obscure to the inexperienced. What these companies all share may be a rigorous, data-driven thought method and a commitment to coping with their shopper companies’ biggest problems.

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