Best of LinkedIn: Strategy & Consulting CW 34/ 35

00:00:00: Provided by Thomas Allgaier and Frennus, based on the most relevant posts on LinkedIn about strategy and consulting.

00:00:05: in CW-three-four-three-five, Frennus is a B-to-B market research company working with enterprises to optimize their campaigns with account and executive insights far beyond AI.

00:00:16: Welcome.

00:00:17: We're diving deep today into the most compelling strategy and consulting trends that really shaped LinkedIn discussions during calendar weeks thirty-four and thirty-five.

00:00:26: This is all specifically curated for you, whether you're in M&A, private equity, venture capital, or consulting.

00:00:32: Our mission today is to cut through the noise, you know, distilling those critical shifts and insights that are truly shaping the strategic landscape.

00:00:39: Think of it as your express lane to being exceptionally well-informed.

00:00:42: giving you that high impact knowledge without the information overload.

00:00:45: We're here to help you understand what's important and, crucially, why it matters for your work.

00:00:50: Alright, let's jump right into our first major theme then.

00:00:53: AI and digital transformation.

00:00:55: Moving from hype to strategic execution.

00:00:58: It feels like AI is absolutely everywhere, yet the real challenge remains translating those, well, exciting pilots into actual, quantifiable business value.

00:01:08: So what's truly standing out as we analyze these sources?

00:01:11: Well, one of the most compelling insights I thought comes from Saul Rashidi.

00:01:15: She uses this fantastic analogy, strategic jenga.

00:01:19: She observes that many companies are constantly stacking new initiatives like digital transformation, cloud migration, and now AI, without ever retiring older ones.

00:01:27: Piling them up and this endless stacking often leads to failure.

00:01:31: right a high percentage of AI and gen AI projects fall short not because the technology itself is flawed But because organizations simply don't finish what they start.

00:01:40: her recommendation.

00:01:41: It's basically strategic spring cleaning

00:01:44: strategic spring cleaning.

00:01:45: I like that

00:01:46: for every new initiative you proactively decommission an old one.

00:01:49: Strategic Jenga is such a powerful visual.

00:01:51: It really highlights that accumulated complexity.

00:01:54: But if that's the problem, what does it practically mean for us to actually get tangible results from AI?

00:02:00: Well, Rajiv Rajagopalan, who's actually launching a new series on AI and operations, really emphasizes that a clear focus strategy tightly aligned to measurable value is absolutely key, moving beyond just scattered pilot projects, you know.

00:02:13: And Reshmaram Chandra echoes this.

00:02:16: She makes it crystal clear.

00:02:17: that AI only unlocks true value when it's built upon a solid business strategy, a clean operating model, and crucially, well-aligned processes and governance.

00:02:27: He even cautions against setting up a separate AI strategy team.

00:02:31: Instead, she advocates integrating AI thinking directly into the core business strategy.

00:02:36: Okay, so it's about deep integration and clear objectives, not just layering AI on top.

00:02:40: And who's leading that charge?

00:02:41: Is it like a new role or an existing one?

00:02:44: Exactly.

00:02:45: While both Kristen Stewart, referencing Deloitte Research and Sam Ganga from KPMG point towards the Chief Strategy Officer, the CSO is being central here.

00:02:54: Stewart highlights that CSOs are pivotal in driving AI investments that genuinely align with enterprise goals, delivering real ROI, managing risks effectively, and importantly, proving impact much faster.

00:03:07: Proving impact faster, yeah.

00:03:08: And Ganga, on the other hand, stresses that quantifiable value, and he means measurable improvements in margin, revenue, cost savings, is not just a nice to have.

00:03:18: It's essential for AI success.

00:03:20: For them, AI is fundamentally a business strategy, not just another tech trend.

00:03:24: That distinction feels really crucial, but how deeply should we be thinking about this business strategy, whom Cartier Aglou from BCG?

00:03:31: He challenges CEOs to go beyond just automating existing tasks with AI.

00:03:36: He frames it as an electricity moment.

00:03:37: You know, much like how electricity didn't just automate candle making, but powered entirely new industries.

00:03:42: He argues we need to redesign entire workflows, maybe even invent new products and services, not just aimed for incremental improvements.

00:03:50: The biggest barrier he suggests is often an imagination gap.

00:03:54: Hmm.

00:03:55: The imagination gap.

00:03:57: Yet Alan Andy offers a really thought-provoking counterpoint.

00:04:00: While he acknowledges AI will transform economies, he suggests its very ubiquity means that sustainable competitive advantage will still fundamentally stem from human creativity, drive, and passion.

00:04:13: That's interesting.

00:04:13: So that tension between radical technological transformation and enduring human ingenuity, how do organizations navigate that effectively?

00:04:21: That's the million dollar question, isn't it?

00:04:23: If human creativity remains so central, how do we best support and augment it with AI?

00:04:29: James O'Dowd argues that the true value isn't found in hiring a single chief AI officer, though that role can be helpful, sure, but in deeply embedding AI capability within specific industry teams.

00:04:38: That way, technical depth truly meets sector expertise to deliver sector-specific outcomes.

00:04:45: In Hughes-Havrin, drawing from an Oliver Wyman Forum report, strongly underlines that organizations must prioritize developing their employees' AI skills.

00:04:55: Without this internal capability fostered from within, they risk falling significantly behind competitors who are actively leveraging in a powered workforce.

00:05:04: It really sounds like getting our own house in order strategically, structurally, and culturally is absolutely paramount if we want to leverage the full transformative potential of AI.

00:05:13: Definitely.

00:05:14: Okay, shall we shift gears?

00:05:15: Our next critical area for businesses.

00:05:18: Risk, compliance and cybersecurity navigating a tighter landscape.

00:05:21: It's pretty clear that regulations are tightening across the board and the stakes for proactive risk management are definitely rising.

00:05:27: What caught your eye first here?

00:05:29: Well,

00:05:29: a couple of legal updates immediately jumped out at me.

00:05:31: Melanie Taussman highlighted new UK failure to prevent fraud legislation.

00:05:37: And this is significant because it cannot apply beyond the UK's borders, meaning companies even say Swiss ones, for example, now need to proactively review and strengthen their fraud prevention measures to mitigate entirely new liabilities.

00:05:51: Well, beyond borders.

00:05:52: OK.

00:05:53: And James Taylor reported on a landmark HMRC prosecution that's the UK tax authority of an accountancy firm under corporate criminal offense or CCO provisions.

00:06:03: This was the first of its kind, sending a really clear signal of strong intent to enforce these failure to prevent offenses.

00:06:10: It's not just theory anymore.

00:06:11: It's tangible and demands robust CCO frameworks.

00:06:14: That certainly makes the consequences very real for businesses, doesn't it?

00:06:18: It moves beyond just, you know, avoiding bad outcomes to actively embracing and managing the process itself.

00:06:23: Exactly.

00:06:24: And Omar Ahmad, drawing from his risk advisory work, reflected on how often risk assessments or internal audits are met with hesitation, perceived as fault finding or even a blame game, right?

00:06:33: Ah, seen that.

00:06:34: But he strongly argues that they are actually powerful tools for transformation.

00:06:38: They uncover bottlenecks, highlight control gaps before they become costly issues, and ultimately lead to smarter, streamlined processes.

00:06:46: Processes that drive efficiency, compliance, and growth.

00:06:49: His advice is for process owners not to fear the audit, but to partner with

00:06:53: it.

00:06:54: partnering with the audit, I like that framing.

00:06:56: It shifts the perspective entirely.

00:06:57: But in reality, what are some of the biggest organizational hurdles to truly embedding that mindset, especially for CISOs and financial leaders who are often under immense pressure?

00:07:07: That's a great question.

00:07:08: For CISOs and financial leaders, it seems to be a lot about communication.

00:07:12: Christian Schwene-Honson, citing EY, discusses how CISOs need to shift, shift from merely providing static dashboards and technical jargon to delivering risk-informed,

00:07:24: value-centric.

00:07:25: Yeah, reporting that genuinely aligns with board oversight and the broader business strategy, reflecting the organization's risk, appetite, and resilience goals.

00:07:33: And on a different but related note, Irene Ragnoni, part of a BCG team, observes that forward-looking financial institutions are reframing compliance.

00:07:43: Specifically around risk data aggregation, think BCBS two thirty nine, the basal committee's principles and the ECB's agenda.

00:07:51: They're seeing it not as a burden, but as a competitive advantage.

00:07:55: Interesting.

00:07:55: How so?

00:07:56: Well, they're even using Gen AI to streamline tooling and embed accountability for data quality throughout the process.

00:08:02: turning compliance into an efficiency driver.

00:08:04: Okay,

00:08:05: so compliance becomes a lever for competitive edge.

00:08:07: Yeah.

00:08:08: But what about the evolving risks themselves, especially now with AI in the mix?

00:08:12: Right, with AI, the risks absolutely evolve.

00:08:14: Evan Benjamin brings up capability elicitation, a really critical practice apparently endorsed by the UK AI Security Institute.

00:08:21: This is about unlocking and understanding an AI model's hidden abilities after training, which is crucial both for maximizing its potential and importantly for identifying hidden security risks.

00:08:32: Okay, that makes sense.

00:08:33: And separately, but equally impactful in the financial risk space, Dr.

00:08:37: Ralph U. Bronegal from PWC shared news about Germany's new anti-hybrid tax decree.

00:08:43: This provides both clarity and, well, complexity for multinational companies, demanding much tighter oversight of intricate cross-border structures to prevent tax avoidance.

00:08:54: clarity and complexity often goes hand in hand with tax law.

00:08:58: So whether it's fraud, cyber risks amplified by AI or these complex international tax structures, a proactive strategic approach to risk is definitely not just a check the box exercise anymore, is it?

00:09:10: It's clearly a critical driver of business performance and resilience.

00:09:13: Absolutely.

00:09:14: And building on that idea of strategic integration, let's turn our attention now to sustainability and ESG integrating for value creation.

00:09:21: This isn't just about compliance anymore.

00:09:22: As you said, it's firmly embedded in core business strategy.

00:09:25: What are we seeing there?

00:09:27: Well, one of the most striking observations, I think, is how chief sustainability officers, the CSOs, are being challenged and really elevated.

00:09:34: Mark Schmidt highlights that CSOs can significantly enhance sustainability's role.

00:09:39: How?

00:09:40: by strategically integrating it into core operations and clearly demonstrating its return on investment, especially amidst shifting geopolitics and, you know, economic headwinds.

00:09:50: Demonstrating the ROI.

00:09:52: Yeah, that's key.

00:09:53: It is.

00:09:53: And Shazia Hassan takes this even further.

00:09:56: She explains that concepts like extended producer responsibility, EPR, where companies are responsible for their product's lifecycle impacts and packaging sustainability.

00:10:05: Reporting, PSR, aren't just compliance tasks anymore.

00:10:09: They're actually powerful levers.

00:10:11: Levers to drive sustainable product life cycles, foster innovation right from the design stage, and build trust with both customers and regulators.

00:10:18: That's a really significant mindset shift, moving from viewing these as mere obligations to seeing them as powerful opportunities and drivers for competitive advantage.

00:10:27: Absolutely.

00:10:27: Yeah.

00:10:28: And this leads us neatly into Tyap Shafiq's breakdown of double materiality.

00:10:32: which is a crucial concept for organizations now.

00:10:35: It basically means assessing two things.

00:10:36: First, impact materiality, how the business affects people and the planet.

00:10:40: That's the inside-out view.

00:10:42: Okay.

00:10:42: And second, financial materiality, how environmental and social issues affect the company's bottom line, the outside-in view.

00:10:49: This concept is now deeply embedded in major global standards like GRI, ISSB, and the European ESRS, shaping how companies report sustainability impacts.

00:11:00: and it demands cross-functional involvement way beyond just the sustainability team to truly grasp an organization's role in this changing

00:11:08: world.

00:11:08: That's a really comprehensive view, isn't it, how businesses interact with the world both outwards and inwards.

00:11:14: If we step back, what does this imply for long-term strategic planning, especially thinking about climate?

00:11:19: Yeah, broadening our perspective, Bastion Giro.

00:11:22: referencing a Deloitte report underscores the vital importance of scenario planning for energy futures.

00:11:27: These features are shaped by different climate responses and levels of economic collaboration versus, say, regional independence.

00:11:34: It's all aimed at building resilience and avoiding being locked in to suboptimal paths.

00:11:39: Right.

00:11:39: Avoiding lock-in.

00:11:40: He notes the TCFD scenario analysis.

00:11:43: that's a task force on climate-related financial disclosures framework offers a fantastic opportunity for CFOs and leaders to explore future risks and potential investments.

00:11:51: And Kristachelas from PWC points out something quite stark.

00:11:55: Climate change isn't just affecting specific industries, it's fundamentally reshaping insurability itself.

00:12:00: Wow,

00:12:01: reshaping insurability.

00:12:02: Yes.

00:12:03: He urges insurers and businesses to adapt.

00:12:06: With, get this, only twenty-six percent of extreme weather losses in Europe currently insured, there's a huge growing protection gap.

00:12:13: It highlights an urgent need for climate risk integration into core strategies just to ensure the future insurability of critical sectors.

00:12:20: So it's really about seeing climate and sustainability not just as external pressures we react to, but as fundamental internal drivers for innovation, resilience, and ultimately long-term value creation.

00:12:32: Exactly.

00:12:33: Okay, let's shift gears one more time.

00:12:35: to finance and performance and strategic alignment.

00:12:38: We've uncovered some interesting insights here about how organizations are managing their financials, their investments, and their overall strategic direction in this complex shifting global economy.

00:12:49: What caught your attention first in this domain?

00:12:52: Well, to take us off, Antoine Renoux, citing EY, emphasizes the critical role of strategic fit when selecting financial planning and analysis tools.

00:13:00: FPNA tools.

00:13:02: It's not just about the features, you know.

00:13:03: It's about ensuring the planning tool truly aligns with an organization's financial planning philosophy, its operating model, and its decision-making rhythm.

00:13:10: Cadence.

00:13:11: Failing to do this can lead to fragmented planning, misaligned forecasts, low user adoption, and ultimately, strategic drift, which is incredibly costly.

00:13:20: That really highlights the importance of matching our tools to actual business needs, doesn't it?

00:13:24: Not just chasing the next shiny object.

00:13:26: It's about genuine alignment with the overarching strategy.

00:13:29: Exactly.

00:13:30: And speaking of strategy, Catherine Kaminski from PWC notes that the one big beautiful bill act that's a significant piece of US legislation is far more than just a tax update.

00:13:41: She sees it as a major moment for business strategy.

00:13:44: It offers new incentives, including immediate expensing for certain assets and R&D.

00:13:49: This could fundamentally reshape how companies plan for innovation, for growth, and even where they choose to operate.

00:13:55: Her advice, act early to fully leverage these opportunities and create value.

00:13:59: Acting early makes sense.

00:14:00: This naturally leads us to ask about the global impacts of these policy shifts.

00:14:05: Eric DuVoisen, referencing EY, discusses how new U.S.

00:14:08: tariffs on Swiss exports, some as high as thirty-nine percent, mark a significant turning point.

00:14:13: Thirty-nine percent.

00:14:14: Wow.

00:14:15: Yeah.

00:14:16: This demands swift and strategic responses from Swiss businesses, things like diversifying export markets or perhaps adjusting local operations.

00:14:24: And similarly, Pierre Bagel from PWC points out that broader U.S.

00:14:27: trade policy shifts, including a new deal with the EU and reciprocal tariffs, are sending ripples through the pharma industry specifically.

00:14:35: Prompting adjustments in pricing strategies, supply chains and market access right across the board.

00:14:40: Okay, here's where the conversation I think truly defends.

00:14:43: Leon Rupp from Strategy in PwC, Deutschland, highlights a pretty stark reality.

00:14:49: German manufacturing is under immense pressure.

00:14:51: It's seeing a declining share of GDP and a widening profitability gap, driven by rising labor costs and stagnating

00:15:00: productivity.

00:15:00: He argues for nothing less than a radical reset of the cost base and a sharpened focus on core strengths to regain global competitiveness.

00:15:07: He stresses that structural change and bold execution are urgently needed.

00:15:18: While Europe has defied expectations to some extent, he states that the real test lies in its productivity compared to the US.

00:15:25: In the US, capital rapidly reallocates into technology, and tight labor markets tend to spark innovation.

00:15:32: The critical question for us is whether Europe can close this productivity gap, and if Germany, as a traditional economic engine, can truly reclaim its growth role.

00:15:42: It really sounds like strategic foresight.

00:15:44: from optimizing internal financial tools all the way to navigating global trade complexities and bolstering national economic competitiveness is more critical than ever for maintaining financial health and achieving long-term success.

00:15:56: Couldn't agree more.

00:15:57: Okay, our final theme, leadership, organization and change, cultivating resilience and adaptability.

00:16:04: This theme focuses on the human and organizational aspects that really underpin all these successful strategies in today's dynamic environment.

00:16:10: What insights did we find on fostering effective leadership and ensuring operational excellence?

00:16:15: Well,

00:16:15: one compelling insight is the intense focus on the internal human environment.

00:16:20: Olga Patapseva emphasizes that employee burnout costs businesses far more than they often realize.

00:16:26: Disengagement alone, she says, drains nearly nine percent of global GDP.

00:16:31: Nine percent?

00:16:31: That's staggering.

00:16:32: It is.

00:16:33: She powerfully argues that humanity drives efficiency, advocating for human-centric leadership, leveraging coaching to unlock potential, and truly seeing employee well-being as a core business strategy, not just some HR initiative.

00:16:47: And complimenting this, Jan Herholz observes that deep-seated mistrust runs through many areas of business and society significantly hindering progress.

00:16:55: Yeah,

00:16:56: trust is foundational.

00:16:57: He makes a compelling case that organizations succeeding in systematically cultivating trust through transparency, predictability, mutual respect, are inherently faster, more resilient, and more innovative.

00:17:08: So putting people first truly is good for business, and that foundational trust is clearly a key ingredient for any successful transformation.

00:17:15: But despite knowing this, Why do so many transformations still fall short?

00:17:19: That's the crucial question, isn't it?

00:17:21: Hugo Garnier, citing BCG, asks why a staggering seventy-five percent of transformations fall short.

00:17:28: He attributes this not to a lack of ambition or capital, but critically, to a lack of alignment among the C-suite trio.

00:17:35: the CTO, the CFO, and the CSO.

00:17:37: The

00:17:37: trio, okay.

00:17:38: Unified action among these key leaders is absolutely critical for success.

00:17:42: And Gideon Slifkin outlines the fundamental challenges of enterprise architecture, or EA, its broad scope, its intangible nature, and its tendency to sort of get in everybody else's business.

00:17:54: These inherent complexities are often root causes of many organizational issues, making it harder to demonstrate those short-term benefits directly.

00:18:01: Right.

00:18:02: EA can be tough to get right.

00:18:03: that really drives home the point about internal cohesion being foundational.

00:18:07: Stepping back a bit, how does this fit into a broader understanding of business strategy itself, especially for larger established companies?

00:18:13: Broadening our view, Martin Reeves, from the BCG Henderson Institute, frames business strategy not as a prescribed set of rigid frameworks, but more as a dynamic pattern of thought or action, one that increases the odds of competitive advantage.

00:18:28: He stresses how large companies often lose touch with shifting environments, and in doing so, their capability to adapt, imagine, and shape the future can atrophy.

00:18:37: Atrophy.

00:18:38: Strong word.

00:18:39: And for understanding how different parts of an organization work together to stay vital, Hussein Y. Al-Hajji reminds us of the Seven S model that well-established McKinsey tool.

00:18:48: It's for analyzing organizational performance and guiding strategic decisions or managing change by aligning key elements like structure, strategy, system style, staff, skills, and shared values.

00:18:59: The Seven S model, a classic for a reason.

00:19:01: What's one more essential piece of the puzzle then for building these resilient and adaptable organizations?

00:19:06: A truly critical piece seems to be understanding risk and technology integration.

00:19:11: Michael Harding stresses that business impact analysis, or BIA, is the bedrock of resilience alongside continuity risk assessment.

00:19:19: He argues it's essential for truly understanding what's most critical when those functions need to be back up and for prioritizing across the entire enterprise.

00:19:28: He dismisses the notion that a BIA isn't always necessary.

00:19:31: The you bedrock, got it.

00:19:32: And Tristan Mallett from BCG highlights that companies selling at integrating technology into their operations achieve unparalleled competitive advantages.

00:19:41: He suggests a hybrid build and buy strategy is typically the optimal pathway, combining the rapid benefits of proven commercial solutions with selectively developing proprietary capabilities tailored to their specific operational needs.

00:19:53: That hybrid approach makes sense.

00:19:55: So from cultivating leadership trust and addressing burnout to ensuring C-suite alignment and smart technology integration, it's clear that a cohesive, people-focused approach and a solid operational and technological foundation are absolutely critical for organizational resilience and maintaining that competitive edge.

00:20:13: Absolutely.

00:20:14: Well, if you enjoyed this deep dive, remember that new additions drop every two weeks.

00:20:17: We also have other additions focusing specifically on private equity, venture capital, and M&A.

00:20:23: Yeah, we've covered a tremendous amount of ground today, haven't we?

00:20:25: From leveraging AI as a strategic lever and navigating those complex tightening compliance landscapes to... embedding sustainability into financial performance and fostering human-centric leadership for resilience.

00:20:40: The common thread woven through all these insights from Thomas Allgaier and Fennis, based on weeks thirty-four and thirty-five, really seems to be this.

00:20:48: In this rapidly evolving environment, sustainable competitive advantage doesn't just come from adopting new technologies.

00:20:54: It truly emerges from the disciplined execution of integrated strategies, deep organizational alignment, and a constant proactive focus on adaptability and crucially human potential.

00:21:05: So, as you reflect on all this, what stands out to you is the single most important takeaway for applying these insights in your own work.

00:21:11: Thank you for joining us for this deep dive.

00:21:12: Make sure to subscribe so you don't miss our next edition.