Filippo Ciarletti Executive Vice President and CTO at Mars&Co: "A strategy consultant must develop his architectural skills, i.e. the ability to put together science, creativity and the human dimension."

Could you first tell us how you see the fit between your personal story and the requirements of your trade?

I believe there are three rules that should guide the successful (or should I rather say impactful, hence possibly useful) consultant. In some way, they appear to be connected to my personal story. You could therefore argue that I couldn't escape my fate!

• Rule #1: Keep your mind open

Being brought up in different languages and exposed to different perspectives (although within similar European contexts) does open your mind.
 

• Rule#2: Make sense of a maze of often conflicting data, facts and opinions.

Here, the scientific mould of ECP and MIT played a big role. First-of-all, because Science teaches you (sometimes the hard way) humility versus facts and figures: you can't talk yourself out of a wrong mathematical statement. In consulting, humility helps to prevent preconceptions or so-called common wisdoms from blurring what should be a dispassionate diagnosis. Humility also comes in quite handy when your job implies interfacing with people that know their business much better than you, being able to leverage their knowledge to understand what's going on and, eventually, testing the solutions you've come up with.

Science also consists in finding explanations to a stream of events and to formalize those explanations into laws that can be used to predict the outcome of this or that action. In business, I'd rather use the term "rules of the game", but it boils down to a very similar process. The resulting ability to predict the outcome of a given set of actions is indeed at the core of the strategist's value added.
 

• Rule #3: Ensure active contribution to and support for findings and recommendations.

This requires a set of quite different skills than the ones provided by the scientific mould. I'd argue that my personal values and interest for History and Literature created a favourable environment. That was compounded by full-immersion work experiences in places as culturally diverse as Japan, Malaysia, South Africa, the US (both coasts plus Ohio), as well as various European countries. Such experiences do teach some lessons about how to create trust and be accepted as part of a team. To that end, respect the people you're working with, their experience and culture; and be yourself. No need to mimic them or to pretend you belong to some kind of above-the-herd world elite.

 
I also gather that you have developed a deep knowledge of rather diverse industries, such as aerospace, consumer goods, retail, infrastructure management, and even government policy… Despite this diversity, did you find common points in the challenges facing your clients?

Just a quick remark to put things in context. At Mars&Co, we don't work for competing clients. This exclusivity stance fosters long term relationships and allows the seniors of the firm to serve clients in different industries over relatively long time-spans. I therefore experienced first-hand that, although market contexts, strategic issues and company cultures do vary widely, the challenges facing top managers are broadly the same. They boil down to three key challenges. For each one of them, the strategy consultant has a role to play, as summarized hereafter:
 

• The Technical challenge - Here, the consultant helps to build the strategic Vision and provides the analytical foundations to it.
• The Decision-Making challenge - In that case, the consultant's role is to reduce the uncertainties intrinsic to any major decision and to help determine the right timing to make them.
• The Leadership challenge - In that case, the consultant focuses on securing what I already called the active contribution of the main stakeholders throughout the process, from the preparatory to the execution phase.

 
That is quite a classical view of management tasks… Is there more about it? I've heard of an approach you developed at Mars&Co called the Strategic Virtuous Circle (SVC). Any relationship with the three challenges?

Classical view… I totally agree with you. One could even contend that the three challenges listed above have been the lot of leaders across History. First-of-all, we must not forget that, beyond fancy words and smart theories, business rests on common sense, hence a framework appears obvious can prove very effective. In this case, it helps indesigning your project, for example by reminding the client that a "leadership assistance" aimed at selling internally an initiative that's not supported by solid technical foundations would very likely lead to failure.

As a matter of fact, to deliver its full potential, the challenge grid requires excellence at both ends of its deployment: the detailed/nitty-gritty end, and the holistic/overall consistency one. On the nitty-gritty side, lays what I call the "relentless pealing of the analytic onion" that allows to uncover, among other basics, the roots of competitiveness in your industry and how you fare vs your competitors, how to create a premium for your products, or the way a new market will unfold…. Without this patient and sometimes fastidious work (you don't peel onions without consequences), you simply won't make sense of all those conflicting data and facts out there! For each one of the three challenges, there are "onions to peel", and the consultant should not be shy to pick the right ones, even when they are difficult to access.

The holistic end ensures consistency within each challenge and, more importantly, across the three of them. Too often this overall consistency is overlooked. Too often one looks for "change" without really knowing the "whys" and only concentrating on the process; too often are decisions made without a proper compass to ensure they are consistent with the Vison and its foundations…
 
What about the strategic virtuous circle then?

For on-going businesses, I reckon that the SVC approach guarantees to meet both the nitty-gritty and the holistic requirements for a successful project.
Basically, this approach, developed and continuously improved over twenty years and around fifty projects, brings an operational answer to a recurring strategic question: "What to do in order for resources invested in a business to result in lasting above-market growth and in sustainable profit (or cash generation) boost?" Another issue the SVC addresses very effectively in the "savings evaporation mystery". Everybody has witnessed millions of much trumpeted (and hard won) cost cuts losing their way to the bottom line, let alone triggering market share gains. The SVC effectively addresses those questions precisely because it covers the three challenges at once as:

 

• It rests on rock-solid analytics (the Technical challenge) to build the strategic Vision that would deliver the full economic potential of the business under review,
• It provides a detailed and carefully timed action plan, complete with the strategic compass allowing to make the right decisions at the right moment and to smartly adapt to new news,
• It operates in a fully transparent, bottom-up fashion, so that those who will eventually participate in its implementation fully understand and contribute in building the plan.

In complex organizations where matrixes of all sorts proliferate, very few of the key contributors to the success of a given strategy do report to the P&L owner. In those cases, the SVC helps a lot, by providing a common language and by describing very precisely the contribution of each bit of the organization to the common goal, thereby goading each one into the right behaviour. At the corporate level of companies made of dozens of profit centres (such as most FMCG ones), the SVC supplies a very effective tool to manage unwieldy business portfolios. No wonder that a major client is using the SVC in that way and has created SVC Awards for its best line managers.
 

You talked about "on-going businesses"… Looking into the future, what are the main changes you believe will impact the way the three challenges are defined and met?

There are indeed many changes under way. Personally, I see three main upheavals of which we've only seen the first impacts: (i) the digital revolution; (ii) globalization ups and downs and its switching form Season 1 to Season 2, and (iii) the new valuation paradigm (should I say craze?) and the vagaries of the financial markets. You can also talk about climate change and its sometime irrational consequences, or about the shifting tastes and expectations of millennials, but I think those belong more to the "big changes" that to the"disruptions" category.
I’m sure you don’t want me to expand too much on each of those upheavals. The points I’d like to make here, based on some observations I made during the last five years, are that:
 

• Less and less can be taken for granted. Inertia or the sheer market power of your company, coupled with some energic show of authority from the top won’t fix most issues as it used to be the case.
• Welcome to the era of “cliffs” (or of the sudden collapse of an individual business financial performance) and of wholechunksof your value added (oryour birth-right) being stolen by outsiders such as suppliers, service providers or newcomers in the industry.
• It will be more and more difficult to buy yourself out of troubles through acquisitions or other easy fixes such as pure cost cutting.
• Merely imitating what's your competitor is doing won't do the trick, as the competitor in question often plays by different financial rules of the game (think about Wal Mart vs Amazon and of their respective market valuations multiples). The quest for asymmetric warfare will therefore be more and more necessary.

All this is good news for strategy consultants,and also for managers fearing to get bored.
In terms of the challenges we talked about earlier:
 

• It makes the first one (Technical) more complex with new tools to master and more creative strategies to design
• It makes the second one (Decisions) much more demanding as decisions must be quicker and as their stakes increase while they are made within a much more uncertain context.

 
But the more profound consequence is that the (r-)evolutions under way make the three challenges more interrelated, that is dependent on each other. For the strategy consultant, it means developing more than ever what I would call his architectural skills, i.e. the ability to put together science, creativity and the human dimension. This is our challenge for the future.