Strategy Consulting Needs To Change. Here’s How.
Strategy is a competitive advantage and the organizations that embrace it will survive, while those that do not will find their organizations facing possible acquisition. A firm’s strategy primarily develops plans to restructure unclear and vague situations to enhance competitive advantage. This article is set in place to inspire consultants to effectively develop and implement a corporate strategy to meet the challenges of today’s business world. It adds to a relatively small body of literature and develops our understanding of the direct contribution of management consulting in formulating and executing strategy in organizations.
This article also offers practical contributions for consultants from a broad-based, industry-wide concentration. It highlights the potential of the application of management consulting through illuminating how consultants can contribute to the company’s strategy development and execution. Scholars may also find that this article contributes to research on an organization’s internal resources, through articulating the impact of management consulting on corporate strategy.
The 4 Pillars of Corporate Strategy
Consultants can take a look at six aspects of strategic formulation based upon a prominent scholar by the name of Venkat Venkatraman:
Consultants are aware that a few scholars, such as Francois Bergeron, Louis Raymond, and Suzanne Rivard, found that two strategic dimensions—-aggressiveness and riskiness, were separate and did not fall under the same strategic dimension as the other four. These scholars concluded that strategy mainly encompasses four aspects: analysis, pro-activeness, defensiveness, and futurity. Thus, riskiness and aggressiveness, or what I would prefer to call assertiveness, fall under the operational risk category and must be managed but also monitored due to fluctuations in the dynamic economic environment of today.
So how can you as a consultant use these four dimensions? Venkat Venkatraman provides a blueprint to follow:
-Analysis refers to the degree to which the roots of problems are analyzed to provide the best solutions, which ultimately results in a more efficient allocation of resources to solve problems and also achieve organizational goals.
-Pro-activeness is defined as the extent to which a firm continuously searches for emerging opportunities in its business environment, and then actively participates in these opportunities by responding to changing trends.
-Defensiveness, which recommends undertaking defensive behaviors that manifest themselves in enhancing efficiency and in cutting costs while maintaining continuous budget-analysis and break-even points.
-Futurity is reflected in the degree to which the strategic decision-making process takes a two-way approach—-an emphasis on both long-term effectiveness and shorter-term efficiency concurrently.
Consultants need to know how they can help in managerial decision making and planning and executing strategy. To help consultants narrow the gaps, this next section provides a formalized application that can be implemented by consultants when implementing corporate strategy in companies.
Leveraging the Power of a Strategic Approach in Companies
When consultants analyze strategy, they aim to create more knowledge and find the best solution using a problematic search of various options. The type of strategy stimulates organizations to apply information systems in their decision-making processes in order to investigate various alternatives and options. It is also important for consultants to provide a high degree of freedom for employees to explore their own new ideas and solutions to organizational opportunities while solving problems. They can analyze strategic milestones to meet the goals of the employee’s intellectual stimulation and personal development. This provides new and more innovative solutions for organizational problems as they arise. Furthermore, consultants can inculcate human capital into social capital to exert change at the organizational level. To develop this strategy, consultants can particularly contribute to the development of a workplace in which there is/are:
1. Emphasis on effective coordination among different functional areas.
2. Extensive use of information systems to support decision making.
3. Comprehensive analysis undertaken when confronted with an important decision.
4. Use of planning techniques.
5. Effective deployment of management information and control systems.
6. Use of manpower planning and performance appraisal of senior managers.
Consultants can also develop a futurity strategy to implement a series of basic research aimed at developing a more comprehensive vision for the future by incorporating upcoming trends in the business environment. They use futurity to expand the growth opportunities available to organizations that may be challenging but important to close the gap between success and failure. To create a futurity strategy, consultants can contribute to the development of a workplace in which there is/are:
1. Specific criteria used for resource allocation which generally reflect short-term considerations.
2. Emphasis on basic research to provide us with a competitive edge for the future.
3. Key indicators of operations forecasted.
4. Formal tracking of significant and general trends.
5. Regular analyses of critical issues.
Furthermore, consultants can develop relationships and interactions to provide valuable resources for the organization as a whole. They must also take an offensive approach at times and in this case, they employ a defensive strategy. A defensive strategy utilizes modifications in order to efficiently and effectively use organizational resources, decrease costs, and control operational risk. To foster this strategy, consultants can particularly contribute to the development of a workplace in which there is/are:
1. Regular modifications to the manufacturing/service technology.
2. Use cost control systems for monitoring performance.
3. Use of current management techniques to ensure that we move smoothly at the required level.
4. Emphasis on product/service quality through the use of work improvement teams.
Pro-activeness is a strategy element used by consultants who take a proactive approach to search for better positions in the business environment. In this case, consultants can inspire employees to find better opportunities and solutions to problems. Thus, consultants positively contribute to pro-activeness strategy by setting highly desired expectations and providing a suitable situation for employees to identify new opportunities. To cultivate a pro-activeness strategy, consultants can contribute to the development of a workplace in which there is/are:
1. Constant search for new opportunities.
2. Attempt to introduce new brands or products in the market.
3. Constant search for businesses that can be acquired.
4. More effective expansion of capacities when compared to our competitors.
5. Strategic elimination of those operations that are no longer profitable in later stages of life cycles.
This article raises vital questions as to how consultants can successfully develop and implement a corporate strategy in companies. Therefore, I suggest that consultants can positively affect the company’s strategy formulation and execution. This managerial implementation improves both competitive advantages and enhances the time and efficiency of task significance leading to satisfied followers who take better care of stakeholders. This finding indicates that consultants can build a suitable workplace for better implementing corporate strategy through facilitating the four strategic aspects of analysis, pro-activeness, defensiveness, and futurity. Consultants can now see how they can cultivate an effective corporate strategy, which will enable superior performance for companies.
Mostafa Sayyadi works with senior business leaders to effectively develop innovation in companies and helps companies—from start-ups to the Fortune 100—succeed by improving the effectiveness of their leaders. He is a business book author and a long-time contributor to business publications and his work has been featured in top-flight business publications.
Bergeron, F., Raymond, L., & Rivard, S. (2004). Ideal patterns of strategic alignment and business performance. Information & management, vol. 41, no. 8, pp. 1003-1020.
Venkatraman, N. (1989). Strategic orientation of business enterprises: the construct, dimensionality, and measurement. Management Science, vol. 35, no. 8, pp. 942-962.
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