The Future of Strategy

I'm not a career strategist, but have had a number of jobs with some strategy content, including of course my present one. I've been lucky (or unlucky) enough also to see firms like McKinsey from the inside, both through some friendships and some projects where I've been "embedded" into a McKinsey team.

This has led me to a brave hypothesis.

The McKinsey type business model is in its death throes.

Instead, strategy is merging closely with disciplines like change management and communication.

On the old days, businesses were simple. Bosses made decisions, staff implemented them. Timelines were long. The communication lines were hierarchical and straightforward. And the business challenges were often about "things" - capital investments, processes etc, things solvable by analysis.

Nowadays, businesses are complex. Bosses struggle to do much more than steer, staff have massive scope for interpretation and reshaping. Timelines are rapid. Communication lines are all over the place (blogs, for goodness sake!). And business challenges are most often about people, specifically their motivation, development and leadership.

Classic business consultants still pander to the old world. Brainy people with fancy models do deals with big bosses. Staff come in with a sole focus on data gathering, problem solving, and enabling decisions by the bosses in set piece presentations, in a process lasting several months. For all they say, implementation is less sexy and someone else's problem - indeed so labour intensive that strategy consultant fees effective exclude them from the game. There is always a neat little slide at the end about the challenge of change management (and the skills of their own firm in further advising from a new project...).

Maybe there are still some situations where this is an appropriate model. M&A comes to mind. Perhaps real step change key moments of truth for companies, in a crisis or with a new CEO, maybe. Though even there the chance of the fancy snappily dressed young consultants deeply understanding the necessary cultural factors are pretty slim.

The alternative model recognises strategy as a core competence (another gripe of mine about Shell which I'll save for another day), and spreads its footprint as widely as can be achieved. The strategy team spends as much time working with the implementation levels of its organisation as with its leadership. Yes, they do stuff for the bosses too, but with less focus on problem solving and more around challenging dominant assumptions, finding some common principles and producing smart communication. Less secret, less analytical, more accessible, more sharing than asking, more coaching.

This feels to me a more powerful model than the traditional one. It can only be done by insiders, mainly up and coming insiders with strong networks across their business. It can be a powerful EVP as a posting for such folk, with high payoff in later jobs. It is fast, almost immediate. And is not expensive.

I guess I'm a bit biased, because this is precisely the model we follow in GS, and I'm convinced we are the better for it. Maybe as a knowledge business we are different to asset intensive businesses - though trends suggest more and more businesses will have knowledge characteristics in future. Maybe our approach leads less decisiveness and clarity from the leadership - but personally I doubt it.

And I salute our leaders for embracing this model. It is harder to share out responsibility than to hoard it. It is harder to be comfortable in ambiguity than to produce edicts. And it is harder to trust your own staff, who you produced, warts and all, and who might take your job one day, than to surround yourself with smart-suited (sycophantic, power-enhancing) advisors.

Enjoy Christmas, McKinsey guys, you need to cash in fast!