What Is Strategy Consulting & How Does It Relate To Your Business?
As companies worldwide become more competitive in a globalized ecosystem, it has become increasingly important and critical for enterprises of all sizes to adopt pragmatic principles, along with industry best practices and robust tactical & strategic plans to scale, grow their consumer base, reach the overarching goals, and to increase profit margins. When companies begin their journey into a market, they typically begin by writing out a business model, which includes statements defining the company overall and what goals (including target financial goals) the company seeks to reach. The goals can be thought of as an end-destination, while the business model defines what the company is at its core. Finally, a business also needs an overarching and comprehensive strategic plan - the business map or blueprint - that defines the direction that the company will take to concisely express all critical goals.
A business strategy is thus a statement that summarizes how a company will fulfill its business objectives over the long-term, which typically comprises several tactical projects and foundational tasks that must be intricately interwoven with daily workflows. Creating a business strategy steers the enterprise toward what directions to take, what objectives to reach, how to deal with obstacles and issues along the way, and exactly how to go about fulfilling its overall goals. While the process of creating a robust business strategy is important, the manner of managing the strategy and ensuring that all projects and workflows are tactically fulfilled includes addressing operational management and strategy management practices, among other things.
If a company is to fully and feasibly create a robust strategy, manage its operations, and ensure the tactical directing of daily workflows/projects that align with the strategy, a strategy consultant may be needed.
A strategy consultant is a specialist with a copious amount of industry knowledge and hands-on experience (associated with business, management, and strategic planning), who works with top-level executives - those responsible for ensuring that a business strategic plan is created and followed - and assists a company with the three goals noted beforehand:
Writing an overarching Business Strategy (also known as a business strategic plan). This is largely associated with the Chief Executive Officer (CEO), who would consult with a strategic planner (i.e. a strategy consultant), along with the Chief Finance Officer (CFO) of an enterprise.
Managing operations so that the strategic plan is followed on a term-by-term basis (i.e. that all time-based terms within a business, like the fiscal year, still utilize the strategic plan as the core blueprint of the business). This is largely associated with the Chief Operating Officer (COO), who might consult with a strategy consultant on how best to manage department directors and project managers so they align with the company’s overall strategy and goals.
Ensuring that all projects and workflows align with the overall company strategy, which would be associated with management, including project managers and department directors.
Think of a company strategy as being like the GPS of a map that can be used to conceptually visualize the direction that a company must take to reach its goals. Without a strategy, companies - especially scaling ones - often get lost in a sea of issues, including financial issues, budgeting, and timeframe issues, IT issues, and more. Such companies often do not reach their destination or fulfill their goals due to a lack of a strategy that the company adheres to. With a strategy in mind, a company will often still need assistance with ironing out the details of the company's strategic plan and with helping executives understand exactly how to stick to the strategic plan. This is where a strategy consultant comes in - he/she helps to shine a light on the strategy “map,” and to calibrate the company operations (GPS) to ensure that the enterprise is on the right track.
As noted by Statista, the strategy Consulting market is worth $31 billion globally, a bit less than 25 percent of the overall, global management consulting market (of $133 billion). Strategy consulting, as can be seen, is a critical aspect of the consulting ecosystem that can benefit a company of any size, in helping it scale, remain competitive, and to reach all of its goals.
A Top Level Approach to an Engagement
One of the most critical and important factors when hiring an external expert (a strategy consultant) is that he/she provides a comprehensive, robust, objective, unbiased, top-level view of an organization’s issues and pain points, while also being able to offer solutions on the macro-scale that can minimize overhead and help to optimize micro-scale, departmental workflows.
Strategy consultants view a company's problems from a variety of external angles, while offering their expertise on even deeper aspects of an issue, such as IT strategic planning (working with a Chief Information Officer), or finance strategic planning (which is typically associated with the CFO). Their first strategy is to understand the big picture of the company’s inner workings, along with the projects and workflows associated with its internal teams, so they can steer the enterprise in the right direction. Such a top-down approach requires grasping the overall business vision in order to craft - and help the business follow - the strategic plan.
Bright Network notes that there are specific instances where a strategy consultant operates as a legal liaison between two merging companies, where, during the merger, regulations dictate that information cannot be shared between the two companies. In such an instance, a strategy consultant helps a critical business process occur according to the strategy of one (or both) companies.
Generally Consulting Direct to the C Suite
A strategy consultant helps a company steer itself in the right direction to reach its overall destination. This requires an understanding of the enterprise’s financial systems, IT infrastructure, projects, daily workflows, internal teams, management style, structure, all to ensure that the company can scale and maintain its operations and profits over the long-term. All of these tasks require working with the top executives, including:
Finance Executives: Developing a strategic plan that is aligned with a company’s financial goals and resources, and ensuring that the company can financially undertake all needed projects while maximizing their ROI, strategy consultants often work with the CFO.
Information Technology Executives: Crafting the IT strategic plan often requires the help of a strategy consultant, who typically works with the CIO to help align all components of the company IT infrastructure with the company strategy and company goals.
Operations Executives: Strategy consultants often work with the COO in order to ensure that all projects and long-term operations are in line with the business vision/model and the overarching company strategy (the strategic plan).
Other Executives: Strategy consultants often work with a variety of other C-suite executives as well, including Chief Marketing Officers, who help craft and manage a marketing strategic plan, Chief Data Officers (associated with crafting and managing a data/analytics strategic plan), and more.
While strategy consultants are hired for their deep insights and experience associated with company strategy and management, they are often brought in to complement or augment existing internal personnel. At the same time they offer executives the assistance they need to apply robust solutions to complex situations - that is, plans of action - to help enterprises reach their goals.
Answering the Bigger Picture Questions
While internal executives of a company often focus on the proverbial “tree,” strategy consultants often see the “forest,” and thus often see the big picture. Seeing the big picture means that strategy consultants can offer long-term solutions to current problems, and can answer big-picture questions, such as:
How can we increase profit margins?
How can the company reach larger demographics and enter new markets?
How can we maintain a competitive edge?
What is the greatest weakness that our company has that may hinder our scalability in the future?
How can we optimize our IT systems in order to stay secure and ahead of other companies in the market?
Can we utilize a new marketing and sales pipeline to sell more products?
How can Artificial Intelligence, the Blockchain, the Internet of Things, Cloud technology, Big Data, and other advanced technology help our company reach our long-term goals?
The ability of strategy consultants to answer such questions is due to their vast amounts of experience and industry knowledge that qualifies them to be consultants, giving them long-term vision associated with understanding what a company needs.
When Do You Need Strategy Consulting?
One of the most important questions that a company can ask is when they need a strategy consultant. Perhaps the best answer requires ruling out other consultants that are similar to strategy consultants, such as management consultants, corporate consultants, IT consultants, and finance consultants.
Remember that strategy consultancy work often overlaps with the quasi-strategizing workflows of other consultants like those mentioned. However, strategy consultants focus solely on strategy (for the most part), and typically have a deep sub-set of skills associated with business and management, which often includes:
Strategizing entry into new markets.
Strategizing business merging.
Strategizing marketing/sales pipelines.
Strategizing IT alignment with the business vision.
Strategizing structuring (including restructuring) of a company.
When a strategy consultant is needed, other consultants will be unable to fully assist. For instance, IT consultants may seem similar to strategy IT consultants, however, while an IT consultant may focus on the technical (e.g. securing hardware and software systems, migrating to the cloud, etc.), strategy IT consultants might focus more on aligning IT systems with the company goals. Or while a finance consultant may work in a similar manner to a strategy consultant, a finance specialist would focus more on how a company spends money and earns income/profits, while a strategy consultant would look more at how the company can align its spending habits with its long-term goals in a sustainable fashion.
When Facing Large Internal Instability
Your company may find that strategy consultants are necessary during several scenarios, such as when a company has internal chaos and a lack of internal stability. Without stability, there can be no fulfillment of company strategy. A strategy consultant can help a business stay on track while management works to optimize the internal work environment.
When Facing Large External Instability
Like internal instability, external instability creates an environment where aligning all projects and workflows with long term company goals is difficult. Augmenting internal teams with a skilled, external strategy consultant is a critical way for a company to ensure that their business can attenuate factors creating external instability in order to stay on track and fulfill its goals.
When Considering A Pivot
When a company is changing direction, change management requires a very skilled hand at the helm so the company does not get off track and/or go outside of its original vision. Essentially, a strategy consultant would help to recalibrate the company’s “GPS” in order to not only help the change occur, but ensuring that the change does not negatively alter the overall, long-term direction that the company takes. For instance, if an IT company that sells smartphones and laptops wanted to drop one of its signature products to optimize its brand as a company that sells only smartphones, a strategy consultant would be needed to go over the financial strategies, marketing strategies, brand strategies, and management strategies to make the change (or “pivot”) go smoothly and seamlessly.
When Making Any Large Or Complex Decision
Strategy consultants are pivotal when a company is making a large decision that may be outside of the purview of internal teams, or when said decision may benefit from an outside, external expert’s objective and unbiased opinion. Consultants can offer new perspectives on an enterprise’s strategic plan and business model that can help change the course of a company in a more favorable direction.
Why Is Hiring Consultants Instead Of In-House Beneficial?
External, outsourced consultants have the capacity to represent revenue generators for a company, as opposed to expensive cost-centers. External consultants offer several key advantages over in-house strategists, like being brought in for specific projects and tasks that require very deep knowledge and experience associated with the issue - knowledge that many internal staff would lack.
1. Consultants are Specialists
While consultants are able to work in general terms, most consultants are specialists who have very specific areas where they excel as experts. A company that needs a temporary aid with a very specific problem would benefit from the services of a consultant. Expert consultants are able to augment internal teams while management can focus on executive duties.
2. Consultants Are Objective
Consultants offer an unbiased perspective because they are external members who are not salaried employees. This allows a consultant to offer a novel solution to an issue, where such a solution would be outside of the scope and experience of an internal team member.
3. The Outsider Perspective
External consultants can offer objectivity on internal business issues, and can thus offer unique solutions to problems that can help drive a company forward in unexpected and positive ways. For instance, for a company dealing with an internal IT issue, an internal IT team member may want to solve a legacy data center issue by using the internal maintenance team, while a consultant may offer a cloud migration solution instead.
4. Complete Devotion to the Single Issue
Consultants often work on a specific issue, leaving other personnel to continue to work effectively on other projects, tasks, and workflows. Due to being specialists, consultants are often hired to solve specific problems and can operate in a completely devoted manner, focusing all attention on the problem at hand until the solution has been found and implemented. Essentially, consultants are dedicated, focused problem-solvers.
Expanding Your Horizon By Using Consultants
Consultants are valuable in that they offer novel ways of solving problems and can help a business scale and grow in the most optimal way possible. Strategy consultants are able to help a business make things happen by helping executives discover the best way to fulfill company goals, utilize assets optimally, improve the bottom line, minimize overhead, and increase profit margins by taking the right steps.
In the end, the choice still lies with enterprises whether to hire an outside agency or to hire in-house for strategic planning. But strategy consultancy agencies will expand a company’s horizons by offering unbiased ideas, novel plans, and unique solutions that can aid a company with its tactical and strategic projects.