Companies Are Rethinking Strategy-Development Approaches to Better Adapt to Today's Competitive Environment, Says Report by The Boston Consulting Group

PARIS--(Marketwire - October 29, 2008) - Executives -- unhappy with strategic-planning processes that they feel have become ossified and bureaucratic -- are reinventing the ways in which they develop strategies, according to a new report by The Boston Consulting Group (BCG). The report, "Does Your Strategy Need Stretching? Adapting Your Strategy-Development Approach to Fit Today's Rapidly Changing Competitive Environment," is being released today.

Based on interviews with nearly 100 executives at twenty leading companies -- including Lafarge, ING Groep, Nokia, Shell, Toyota, and United Parcel Service -- the report finds that organizations are stretching their strategy-development approaches along three mutually reinforcing dimensions:

-- Stretching their time horizons to give the short, medium, and long term each its due

-- Stretching their thinking with new techniques that boost creativity and insight

-- Stretching their engagement model to foster dialogue, capabilities, and alignment across the organization

According to coauthor Nicolas Kachaner, a senior partner in BCG's Paris office, "Faced with increasingly changeable markets, executives are not abandoning strategy and long-term thinking. On the contrary, they are embracing new strategy-development approaches that help them not only to see new opportunities sooner but also to seize them more decisively."

Stretching Their Time Horizons

The report finds that more and more, companies are taking distinctly different approaches to strategizing for the long, medium, and short terms. When thinking long term (five or more years out), a broadly shared strategic vision of possible "futures" and the company's ideal position in each is the goal. In the medium term (three to five years out), the goal is a business plan that describes the investments and moves required to realize and create value from the strategic vision. And in the short term, the objective is to ensure consistency and make smart tradeoffs between the business plan and budgetary realities.

Stretching Their Thinking

BCG's study found that companies are expanding their thinking repertoires in three different ways:

-- Investing in the art of questioning to foster discussion on the most critical issues and to strengthen the organization's capacity for strategic thinking

-- Multiplying perspectives on the company's situation to fight inertia and groupthink

-- Building scenarios to prepare the organization to compete in any number of plausible futures

Whether new methods are permanent additions or one-time experiments, the goal is to shake things up lest routine become the enemy of creativity and insight.

Stretching Their Engagement Model

The report also details ways in which companies are retooling their strategy-development approaches to generate enthusiasm for, ownership of, and alignment around a strategy. In so doing, the processes start to yield not just good strategies but also good strategists. This engagement is achieved by changing the tone from static presentation to freewheeling dialogue, accelerating the rhythm with more frequent and focused discussions of strategy, creating new forums for strategic debate, and redefining the role of the corporate center as agenda setting, coaching, and orchestration of the process.

According to coauthor Michael S. Deimler, a senior partner in BCG's Atlanta office, and global leader of BCG's Strategy practice, "Stretching empowers the organization to shape its destiny through shared strategic aspirations, to enhance its preparedness and agility in turbulent times, and to foster enthusiasm and engagement. While few companies are stretching on all three dimensions today, all would benefit from reviewing and reinvigorating their strategy-development approaches."

To receive a copy of the report or arrange an interview with one of the authors, please contact Eric Gregoire at +1 617 850 3783 or gregoire.eric@bcg.com.

About The Boston Consulting Group

The Boston Consulting Group (BCG) is a global management consulting firm and the world's leading advisor on business strategy. We partner with clients in all sectors and regions to identify their highest-value opportunities, address their most critical challenges, and transform their businesses. Our customized approach combines deep insight into the dynamics of companies and markets with close collaboration at all levels of the client organization. This ensures that our clients achieve sustainable competitive advantage, build more capable organizations, and secure lasting results. Founded in 1963, BCG is a private company with 66 offices in 38 countries. For more information, please visit www.bcg.com.