Our solutions

 

  • Growth
    strategy
    Growth
    strategy
    Growth strategy
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  • Portfolio
    and M&A
    strategy
    Portfolio
    and M&A
    strategy
    Portfolio and M&A strategy
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  • Operating
    model
    Operating
    model
    Operating model
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  • Functional
    strategy
    Functional
    strategy
    Functional strategy
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  • Capability
    identification
    and building
    Capability
    identification
    and building
    Capabilities identification and building
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“The most powerful growth engines are made up of a handful of capabilities providing real differentiation in the market.”

The problem: Chasing growth

Too many companies are chasing growth wherever it presents itself and end up pursuing many growth opportunities in parallel. As a result they spread their resources thin and leave potentially viable growth paths under-resourced. They may experience a temporary revenue boost, but the gains are almost never sustainable.

Years of chasing growth at all cost leaves those companies okay at many things, but great at nothing. They don’t build the fundamental advantage that leads to long-term growth.

Our solution: Don’t chase growth — focus on building your company’s growth engine

Consistent growth, in our view, is the result of building a powerful growth engine — a system of a handful of capabilities that provides real differentiation in the market. From there, growth becomes the result of leveraging that advantage again and again, by pursuing paths that are in line with what the company does — or could do — uniquely well.

Companies that want to grow in a way that fits their capabilities system and way to play can pursue one of four avenues.

We present the four types of growth as a bull’s eye. The approach that tends to generate the most value is the one at the center. Options get more expensive and riskier as you move toward the periphery.

 

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1. They can grow the core of their business, getting more from their existing customers within the "headroom" of their current products and services.
2. They can look for capability adjacencies, typically products and services that they haven't offered before, that allow them to apply their existing way to play and capabilities system in new market domains, in ways that complement their existing offerings.
3. They can expand their geographic footprint, extending their existing capabilities system and offerings to new places and new customers.
4. Most exceptionally, they can build new capabilities that expand (or replace) their existing way to play, potentially giving themselves a completely new platform for growth. This is by far the riskiest growth approach.

More on growth strategy

The Grass Isn’t Greener
Harvard Business Review
Our analysis of shareholder returns of more than 6,000 companies globally, however, shows that the idea that some industries are superior does not hold true.
read more
Strategy& viewpoint
Growing numbers of companies based in emerging markets are going abroad to claim their share of international trade. The journeys of seven Brazilian multinationals offer a framework for companies new to globalization.
Where to Find Growth Opportunities Within Your Company
chiefexecutive.net
How will businesses create value for shareholders three or five years from now, once the financial leaning-out of corporate America has run its course? Most companies expect to continue growing faster than the overall economy, but our recent research suggests otherwise.
How Companies Can Use Coherence to Drive Growth
chiefexecutive.net
Most companies can manage only three to six capabilities into a reinforcing, winning system. It’s another case of the old saying: quality over quantity. A concrete focus is the most important ingredient for growth.
Prioritizing Your Growth Options
chiefexecutive.net
Your capabilities — what you do better than anyone else — should drive your decision — making as the economy recovers.
Grow from Your Strengths
strategy+business
The only sustainable way to capture new opportunities is to remain true to what your company does best.

“True advantage comes from having a steady stream of offerings that only distinctive capabilities can deliver.”

The problem: Having a product and service portfolio that is not set up for success

A company’s products and services are its most visible activities, to its customers and the outside world. However, too few companies create a product and service portfolio that truly aligns with their strategy. Instead, most companies compose portfolios based on short-term financial performance and shoehorn a strategy to fit around that portfolio.

Mergers and acquisitions are a powerful way to modify a company’s portfolio. But too many companies do deals to become bigger, rather than focusing on becoming better.

Our solution: Determine the optimal portfolio and deals based on fit with your differentiating capabilities

Companies should manage their portfolio in a way that allows them to become more coherent. This may entail divesting profitable products and services that don’t fit your capabilities system and finding ways to better integrate those that do fit into your capabilities system. By applying the same capabilities across your entire portfolio, you will get better at the few things that matter most and can give your smaller businesses that would otherwise not warrant the build-up of such distinctive capabilities a great competitive advantage. It’s all about building relevant scale behind your differentiating capabilities system.

Companies should consider mergers and acquisitions to become more coherent. In our research, we have found strong evidence that capabilities-driven deals — those that leverage the buyer’s key capabilities onto new products or help it acquire new capabilities that round off its capabilities system — produce significantly better results, on average, than deals with limited capabilities fit. The pay-off of a capabilities-driven view on portfolio and M&A is immediately visible.

Companies that follow this capabilities-driven approach to portfolio and M&A strategy become better every day at what matters most to their customers. They grow bigger and more coherent and can invest their higher returns in further building out their competitive advantage. They become what we call supercompetitiors that dominate the part of the market they have chosen to focus on and seem almost unstoppable.

Portfolio and M&A strategy

Portfolio and M&A strategy

More on portfolio and M&A strategy

The New Supercompetitors
strategy+business
Companies that realize the power of their capabilities can shape how industries evolve.
Deals That Win
strategy+business
Twelve years of data shows that mergers and acquisitions that apply or enhance capabilities produce superior returns.
The Capabilities Premium in M&A
strategy+business
A study of inorganic growth shows that deals made to enhance or leverage the things that companies do well consistently outperform others.
Making the Most of M&A
strategy+business
Mergers and acquisitions are becoming more critical — and more perilous — than ever. You can build your capabilities, even in the midst of turmoil.
The Secret to a Successful Divestiture
strategy+business
When you are selling part of your company, don’t just offer buyers a potential asset; give them the capabilities to gain value from it.

“A company with a strong alignment between its strategy and its operating model is like an engine firing on all cylinders.”

The problem: Having an operating model misaligned

Building a strategically aligned, “fit for purpose” operating model continues to be an elusive goal. Many companies are struggling with the symptoms of having an underperforming operating model, including business units and functions that protect their own domain’s priorities to the detriment of the overall business, hoarded or wasted resources, strategic goals without follow-through, and a culture that dismisses or ignores accountability.

These problems exist because of the breadth of an operating model’s impact. An operating model determines, among other things: behavior, workflow and process design, IT decisions, and investment decisions. When a company’s operating model is inconsistent with the broader objectives of the business, that misalignment affects the day-to-day actions of individual employees and ultimately creates an insurmountable gap between strategy and execution.

Our solution: Build a strategically aligned operating model

Companies with a Capabilities-Driven Strategy have a great starting point for developing their operating model because they have clarity about the “what” (the way the company creates value through its differentiating capabilities) and can therefore define the “how” (the way to organize to create value).

We work with our clients to develop an operating model that brings their strategy to life. We start by determining the organizational imperatives for:

  • delivering the value proposition
  • building the company’s differentiating capabilities, and
  • executing its strategic priorities

We then develop an operating model blueprint that puts differentiating capabilities at the heart of key organizational elements and develop a roadmap for change.

Operating model

More on operating model

The Essential Advantage
Based on extensive research, The Essential Advantage helps you construct a strategically coherent company in which the pieces reinforce one another instead of working at cross-purposes.
The Secrets to Successful Strategy Execution
hbr.org
A brilliant strategy, blockbuster product, or breakthrough technology can put you on the competitive map, but only solid execution can keep you there. You have to be able to deliver on your intent.

“The main purpose of functional strategies is to enable the company’s strategy – not to achieve functional excellence.”

The problem: Striving for functional excellence

The role of the functional leader is becoming increasingly challenging: Automation, outsourcing, increased competition, and process improvement have raised expectations for efficiency gains. More severely, functions are often the first ones to suffer from the incoherence of the company they’re in: With every part of the business having different capability priorities, functions face too many conflicting requests and end up stretched thin, unable to help the company build the type of advantage it needs in order to succeed. And, with little guidance from the company as to what truly matters for success, many functions resort to benchmarking their activities against what other companies do and strive to build functional excellence – falling short of the strategic role they are often asked to play.

Our solution: Translate the company’s strategy into functional priorities

Instead of striving to be “best in class” in everything, functions need to focus on helping their functional organization become coherent and “fit for purpose” by changing their portfolio of activities to focus primarily on those that are strategically important to the company and help drive its distinctive value proposition.

We help functional leaders or units take on a more strategic role while still fulfilling their day-to-day transactional and expertise tasks. We do so by working with them on three interconnected elements:

  • establishing priorities in line with the company’s overall strategy and its differentiating capabilities
  • aligning the operating model to deliver value in line with those critical priorities
  • allocating resources accordingly

For functional leaders, this “new functional agenda” requires a real understanding of the company’s strategy, deep comprehension of functional capabilities and the ability to match them to the strategy, and even higher level of interpersonal skill to work across the organization. This approach can be a primary source of success not just for the function, but for the enterprise as a whole.

Functional strategy

More on functional strategy

watch video
Video
Find out how functions like HR, IT, and finance can balance a new strategic role with still managing their own house.
read more
Strategy& viewpoint
There is a golden opportunity today for the leaders of HR, IT, finance, operations, R&D, marketing, sales, sourcing, and other corporate functions and share services.
Beyond Functions
strategy+business
Conventional organizational structures may be obsolete. How about a model based on capabilities instead?
The capable supply chain
Profiler
Strategy& has developed a profiler that lets companies test the coherence of their supply chain capabilities against their defined “way to play” to ensure sufficient alignment for premium returns.

“The engine of value creation is a system of capabilities that together allow a company to compete in a differentiated way.”

The problem: Trying to excel at everything and ending up being great at nothing

Too many companies don’t identify which are the few cross-functional capabilities they need to excel at in order to deliver on their value proposition. Not being clear about those capabilities, functions often decide to pursue functional excellence. They strive to be world-class at everything they do, often treating benchmarking as the path to success. The consequence: they spread their resources thin and therefore don’t excel at anything; and worse: their actions are disconnected from the strategy.

Many companies struggle to build distinctive cross-functional capabilities. The biggest challenges often are breaking down functional silos, scaling capabilities throughout the organization, freeing up the required investment.

Our solution: Identifying and building the few distinctive capabilities that are at the heart of your company’s identity and success

We help companies identify their unique areas of strengths and the capabilities that are required to win with their strategy. And we then help them build those capabilities following a three-step approach.

Capability identification

More on capability identification and building

Strategy That Works
Winning companies don’t follow conventional wisdom. They apply five acts of unconventional leadership that allow them to close the strategy-to-execution gap.
The Coherence Premium
Harvard Business Review
Sustainable, superior returns accrue to companies that focus on what they do best. Companies that align their differentiating capabilities with the right external market position enjoy a coherence premium.
The Essential Advantage
Based on extensive research, The Essential Advantage helps you construct a strategically coherent company in which the pieces reinforce one another instead of working at cross-purposes.
The New Supercompetitors
strategy+business
Companies that realize the power of their capabilities can shape how industries evolve.

SoundBite: The secret to strategy that works

  • Part 1: Why strategy matters
    In turbulent times, your strategy matters more than ever. The world's greatest companies weather adversity and uncertainty much more adeptly by operating from their core strengths. A strategy built on these differentiating capabilities helps you outpace the competition, achieve faster growth, and earn the right to win.
  • Take your strategy from paper to pavement
    Far too many strategies fail when it comes time to bring them to life. In fact, more than two-thirds of executives say they don’t have what they need to execute their strategy. Find out how your company can avoid falling into the strategy-through-execution gap by asking 3 questions.
  • Transform your company and your industry
    Supercompetitors have a special recipe for success. It’s fueled by capabilities and it makes these iconic companies so powerful that they’re actually influencing and reshaping entire industries. Find out how you can use smart strategy to transform your future.