How CEOs are rethinking strategy development

6 minute read 15 Feb 2021
Authors
Juan Uro

EY-Parthenon Principal, Strategy and Transactions, Ernst & Young LLP

Experienced strategy, transaction and transformation advisor and operator. Board member. Husband, father of two.

Jeff Wray

Global EY-Parthenon Leader

Passionate leader focusing on large scale opportunities in retail and consumer products. Fascinated about how products get to market. Excited about the breadth and depth of knowledge within EY.

6 minute read 15 Feb 2021

Strategy formulation is changing. Competition is coming from new places and the needs of multiple stakeholders, not just shareholders, should be addressed.

CEOs are driving corporate strategy amid unprecedented changes in customer behavior and a significant increase in digitization. Competition is coming from companies they had not previously considered.  

Everything about strategy is changing. It used to be primarily about driving shareholder value — not anymore. Now it's about driving long-term stakeholder value.

Corporate strategy should also address the changing nature of competition. Recent EY-Parthenon research reveals that two-thirds of CEOs and C-suite executives believe the biggest competitive threat is coming from a company they don't know about.

Companies should consider increasing their capabilities, and areas like digital are critical. Executives need to bring this experience into the strategy formulation process. Many of these capabilities are not within the company but in the ecosystem — via alliances, joint ventures or even minority equity stakes in startups.

Overall, CEOs are focusing on:

  • Injecting new ways of working, operational agility and programs that allow talent to be deployed across the enterprise in a much fluid or rapid way
  • Pursuing inorganic changes to their portfolio as they look to buy versus to build capabilities
  • Redesigning their capital allocation process to better focus on growth areas

These changes may necessitate a culture of innovation that can accelerate the path to growth from both internal sources and across a company’s entire ecosystem. When developing strategy across a wider range of employees, across trusted partners externally, across the board, it’s critical to not just refine the strategy, but also win the hearts and minds and drive the cultural change that's so critical to actually actioning a new strategy.

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Summary

CEOs are rethinking strategy development, considering the needs of a wide group of stakeholders — not just shareholders. A digital strategy may be key to making the overall strategy work. CEOs should understand their company’s place in the ecosystem: where does it have broad capabilities and where it needs to partner to succeed.

About this article

Authors
Juan Uro

EY-Parthenon Principal, Strategy and Transactions, Ernst & Young LLP

Experienced strategy, transaction and transformation advisor and operator. Board member. Husband, father of two.

Jeff Wray

Global EY-Parthenon Leader

Passionate leader focusing on large scale opportunities in retail and consumer products. Fascinated about how products get to market. Excited about the breadth and depth of knowledge within EY.