Strategy&: Delivering Strategy through Execution

The story behind the acquisition of Booz & Company

Booz & Company is a global strategy consulting firm established in 1914. Up until 2014, Booz & Company’s value proposition was limited to only delivering strategy advisory services to large clients spanning several industries such as Energy & Gas, Telecommunications & Technology, Public Sector, etc. In 2014, following its acquisition by the audit and consulting giant PricewaterhouseCoopers (PwC), Booz & Company changed its name to Strategy& and promised the market a new “Strategy through Execution” value proposition: Advise clients and help them build the needed operational capabilities to deliver on the strategy”.

“We are delighted to be joining PwC, the leading professional services network in the world, as it enables us to offer both our clients and our people a bigger, broader, and better opportunity to connect strategy to impact”

Cesare R. Mainardi, Former CEO of Strategy&

The management consulting industry is witnessing a disruptive pattern. Clients are no longer only asking for strategy and management advisory services, they are however looking for a broader range of services (such as Business Process Reengineering, IT Consulting and Integration, Human Capital Development, Market Research, Project Management, etc.). Recent executive client interviews conducted by Strategy& partners confirmed this pattern. Clients expressed excitement and saw huge benefits from the combination.

Defining a new Business Model

Through this combination, the PwC entity will go to market with a compelling value proposition of designing a practical strategy (phase 1) and following up with implementation projects (phase 2, 3, 4 etc.). This business model allows PWC and Strategy& to cross-sell client engagements up and down the professional services value chain, increasing the firm’s revenues from one side and improving outcomes for clients from another side. The success of the new business model will be driven by two important factors:

  • Accountability: The new value proposition requires the service provider to assume full responsibility of the success/failure of the proposed strategy and recommendations. Clients nowadays are changing their views on consulting firms. In the past, consulting engagements were considered as one-off projects where the consulting firm comes in, deliver the work, and gets out. The consulting industry dynamics have changed. Clients are demanding continuous involvement and that consulting firms along with the management team help create value for clients.
  • Practicality of Recommendations: The new business model enforces the consulting firm to design practical strategies. The possibility of granting follow-on implementation work to PwC forces the combination, specifically Strategy&, to focus on formulating implementable recommendations.

What does it mean in terms of operations?

Implementing the new business model is not as easy as it would seem. Several factors hinder this implementation, including but not limited to cultural differences, go-to-market and biding processes, talent acquisition and retention, client management, career progression, type of projects, etc. For these reasons, PwC decided to keep both companies separate, however several processes and practices were developed to ensure that the combination is capturing synergies and delivering on the target business model.

Strategy&, with the support of PwC, doubled down on its recruiting efforts. The firm is heavily investing in recruiting MBAs from top US and international business schools. Top talents will ensure premium quality work and will also justify the high rates commanded by premium strategy consulting firms. Strategy& employees will also have the option to transfer from Strategy& to PwC if they prefer a more stable career. This option helped in the retention of top talents and ensured that subject-matter experts are retained within the wider organization.

On the client management side, PwC and Strategy& decided to assign a single partner per client to manage the relationship. The newly assigned partner will act as the single point of contact for both firms and will help the client in identifying its most prominent issues (strategic and operational). The partner will assign team members from both firms who will jointly work to submit a response on the client’s RFP. This practice helps both companies consolidate the efforts and simultaneously approach clients, emphasizing the new strategy to execution value proposition.

In addition, Strategy& also developed processes for easier access to specialized talent currently existent only within PwC. Strategy& (~3,000 employees) is relatively a small firm compared to PwC (~200,000 employees). Although Strategy& has a very diversified talent base, the breadth of expertise in PwC is by far wider than what Strategy& can offer. Institutionalizing such processes made it easier for Strategy&, while working on a strategy engagement, to source specialized expertise from PwC’s talent pool.

Strategy& now has a well designed operating model to compete in this new space and redefine the consulting industry. They are heavily investing in the differentiation of the brand. Will customers positively respond to this new model and structure? Will this model work? The strategy consulting market is expected to grow at 3.7% annually. Is Strategy& well positioned to outperform the market?


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Student comments on Strategy&: Delivering Strategy through Execution

  1. As someone who is recruiting for consulting, I found this post very insightful! In an industry where your brand means everything, I feel as if Strategy& has quite a feat ahead. Being able to compete with the best firms will require years of great performance, which all comes back to talent. Offering the incentive of working at PwC may not cut it. I wonder what other types of incentives Strategy& can offer its employees to lure away the best talent from searching elsewhere.

  2. Ditto on the usefulness of the post for recruiting! You mentioned that Strategy& and PwC will work together to submit a response for client’s RFP. How would that actually work? Wouldn’t the execution/operational aspect of the work from PwC depend on the recommendations from Strategy&? Wouldn’t you need Strategy& to perform the work first before PwC can submit a response back to client?

    1. I totally agree with you, you can’t submit a strategy and implementation proposals at the same time. The first proposal that gets submitted do not included the specifics of the implementation work. It mainly shows the capabilities that the PWC network has on the implementation side. Should the recommendations require such type of services, a detailed proposal focusing on a specific implementation area will follow the strategy project. hope this answers your question

  3. Having worked at Booz & Company before it became Strategy&, I have seen first hand the amount of value we will be able to bring to the client now that we have our own implementation team too. The synergy of cross selling is also a huge benefit. Given the recent trend of consolidation in the consulting industry with Monitor Deloitte and others, I think Strategy& is well positioned in the market place. I do worry about talent because there was significant attrition in the India offices post the acquisition but I think it’s more location specific and places like Middle East etc. have been able to retain their top talent like you 🙂

  4. Very interesting! Agreed, yet another consulting-bound recruit here. It is amazing to see how the “Big Three” consulting firms have been incredibly successful in building brand equity that is difficult to compete against in the industry. I’m glad to see some of the other players (Deeps, Monitor Deloitte is a great example) start to make moves to disrupt that leadership in the market. I am very interested to see how the landscape changes in the next few years. Strategy& may have a unique value proposition in their business and operational models in the short-term, but I feel that the competition has been quick to react to the increased demand for implementation capabilities. You are absolutely right, are they sufficiently differentiated to make an actual difference in their stance in the long-run is the real question.

  5. I find this very interesting! Strategy& is the latest of the large consulting firms to have merged with an audit firm. What is interesting is that while they are (currently) last to the game, they were also one of the biggest firms prior to the consolidation. Talent will always be a consideration, but I have experienced firsthand at how aggressive their recruitment efforts have been.

    Another interesting point you brought up is that their merger will allow them to offer the full service – strategy + implementation. While this is in line with the disruptive trend how would they differentiate themselves from similar partnerships (e.g. Monitor + Deloitte, Parthenon + Ernst & Young)? Do you think that these bundled offering will eventually force the big players (BCG, Bain) to follow suit?

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