Strategic questions can seem deceptively simple: what’s our value proposition? How do we differentiate ourselves in the market, and are we investing in the areas that will keep us ahead of the competition? Behind each business strategy are hundreds of alternatives—and many more data points, insights, and analyses.
What’s more, a lot is at stake. Only one in nine companies has sustained profitable growth in the last decade. The strategic failures of companies like Apple, Blockbuster, and Coke are still widely discussed. So it’s not surprising that many executives seek help as they attempt to address these issues. And the first place most of them look is to strategy consulting firms.
These firms, dominated by the Big Three trio of McKinsey, Bain, and BCG, pioneered many of the frameworks that companies use to develop corporate strategies. But while they loom large in the strategy consulting market, they’ve got new competition, from expert networks and internal consulting groups to the independent strategy consultants that Business Talent Group works with.
So how do you know when you need strategic support and what the best option is for your business? In this guide, we’ll unpack what exactly strategy consultants do—and help you navigate an increasingly cluttered landscape.
Table of Contents
- What is strategy consulting?
- What services do strategy consultants offer?
- What firms offer strategy consulting?
What is Strategy Consulting?
Strategy consultants are problem solvers, trained to answer big questions by applying rigorous analytical frameworks. They bring an objective eye and, in many cases, cross-industry experience to issues like:
Growth in existing markets
- Can we make our current customers more profitable by raising prices or persuading them to buy more?
- Should we work harder to retain our current customers?
- How can we attract new customers to our existing products?
Entering new markets
- Should we enter a new market or develop a new business?
- Should we acquire a new business, and if so, how will it integrate with our current operations?
Over the past decade, strategy execution—the actions companies take to translate their business strategies from PowerPoint to reality—has captured a disproportionate share of the spotlight. And with good reason: compelling strategies are unlikely to succeed without the discipline, incentives, and accountability that come with thoughtful strategy deployment and execution.
However, it’s worth noting that what UCLA professor Richard Rumelt called bad strategy carries even bigger risks. If you don’t properly define your business challenge, you won’t be able to address it. If you can’t focus your strategic priorities, your team will be pulled in too many different directions to succeed—or worse, strike a muddled compromise that addresses everything without solving anything. You might set aggressive growth goals, but you’ll also need to clearly delineate what business strengths you’ll leverage in order to accomplish them.
Why is it so hard for executives to address these issues on their own? Internal politics often get in the way, while internal blind spots prevent leaders from seeing solutions that seem so clear to outsiders. In many cases, assessing new opportunities takes companies out of their comfort zones and into areas that require deep expertise in another field. Strategy consultants make it easier to bridge these gaps, speaking truth to power and helping executives understand how new ventures might fit with existing offerings—and how they’ll impact operations.
Strategy Consulting Services
If strategy consultants help clients solve problems, what types of problems are they solving? The answers, unsurprisingly, are as varied as the types of challenges that businesses might encounter, from identifying opportunities to refining performance metrics—and more.
Typical strategy consulting services include:
Business intelligence, data science & analytics
Business plan development
Commercial strategy & operations
Corporate & business unit strategy
Ecommerce, digital & omnichannel strategy
Emerging technologies strategy
Financial risk management
Innovation & R&D
Joint ventures & partnership development
Market access strategy
Mergers & acquisitions
New market entry
Product lifecycle management
In short, any time companies need help with the substance or the process of deciding where to focus their time, resources, and investments, strategy consultants can offer valuable insights and expertise.
Of course, expert insights aren’t inexpensive. Consulting firms and clients may argue about whether strategy consulting is advice by the hour or profits at a discount, but one thing is clear: to get the most value from the process, it helps to be savvy when selecting your options, which is a subject that we’ll turn to in our next section.
Strategy Consulting firms
Strategy consulting is the service that launched the multi-billion-dollar management consulting market, and it’s still the most prestigious. Hire a Big Three management consulting firm for your engagement, and you’ll get smart consultants, established problem-solving frameworks, and a brand name that looks good before the board.
However, strategy consulting represents just a fraction of the market, even at traditional firms. Why?
First, the digital economy has made market research and data easier than ever to access. Once-proprietary methodologies are also widely available online. Many companies have formed specialized internal consulting groups staffed with big consulting firm alums, while other big-firm alums have struck out on their own to become freelance strategy consultants.
All of this makes it harder and harder to justify the big consulting costs that most Big Three engagements entail. When you need C-suite credibility and dozens of resources working on your problem, the big firms shine. When you need more targeted and flexible help, independent strategists are often a better answer. Here are a few of the reasons:
- Scope: It’s easier to address problems that are too “small” for big firms to tackle.
- Expertise: A wide variety of skills and experiences are available in the independent market—often highly specialized. What’s more, independents are also more likely to have hands-on executive experience in different industries.
- Flexibility: You can deploy one partner-level consultant without engaging his or her entire team. You can adjust the number of people you engage as needs evolve. You can buy exactly what you need, and select whom you want to work with.
- Fit: Because they come without a big brand name, independent consultants often integrate with internal teams better than big firms can.
- Cost: Costs are often substantially lower with independents. In fact, our rate card analysis showed that using high-end independent consulting talent instead of a traditional firm could save companies an average of 35-49% on strategy projects.
When it comes to answering difficult questions, identifying blind spots, and assessing strategic options, an external perspective is almost always helpful. Combine it with consultants who have broad experience and rigorous strategic methodologies, and you’ve got a (market) winning combination.
About the AuthorMore Content by Leah Hoffmann