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?
Previous experience working at Strategy& during the acquisition phase