Beyond Mandate Building High Performing Strategy Teams For Tomorrows Business Landscape

Beyond Mandate: Building High-Performing Strategy Teams For Tomorrow's Business Landscape

The Crisis in Corporate Strategy Functions

BCG's recent research on strategy teams delivers a sobering reality check: more than half of senior executives are dissatisfied with their strategy organizations, and perhaps more tellingly, nearly one-third of Chief Strategy Officers (CSOs) themselves believe their teams aren't succeeding. This should raise alarm bells in boardrooms worldwide. At a time when businesses face unprecedented disruption, having an ineffective strategy function isn't merely suboptimal—it’s potentially existential.

The BCG study, based on their Strategy Excellence Diagnostic database covering over 430 strategy organizations, identifies three critical factors that separate high-performing strategy teams from the rest: maintaining a clear mandate, mastering cross-organizational collaboration, and bringing strong value-oriented skills to the table. While these findings provide valuable insight, they deserve deeper examination in the context of today's rapidly evolving business environment.

The Power of Focus: Why Mandate Clarity Matters

BCG's data reveals a compelling insight: strategy teams with multiple mandates are 15% less likely to be top performers. In an era where corporate functions are often expected to be all things to all stakeholders, this finding advocates for strategic focus rather than diffusion.

The research identifies four distinct mandates for strategy teams:

1. CEO Office (30% of companies): Supporting top management in developing group strategy and setting strategic targets
2. Portfolio Manager (40%): Systematically evaluating the corporate business portfolio and shaping it
3. Strategy Orchestrator (21%): Facilitating strategy development and strategic decision-making by the leadership team
4. Strategy Service (10%): Actively shaping strategy and providing strategic business intelligence

Importantly, BCG found that 60% of strategy functions carry a secondary mandate as well. Yet the data suggests this dilution of focus may be counterproductive.

This finding aligns with broader organizational effectiveness principles. Strategy teams that attempt to serve multiple masters often end up serving none well. A McKinsey study on the evolving role of the CSO similarly found that clarity of purpose is essential for strategy function effectiveness, though they’ve observed CSOs increasingly becoming "strategic orchestrators" who coordinate across the business to drive execution rather than just strategy formulation.

However, BCG's framework doesn't fully account for how these mandates might need to evolve over time. As companies progress through different growth stages or navigate industry disruption, the optimal mandate for their strategy team may shift. Amazon provides an instructive example: its strategy function initially focused on portfolio management as the company expanded beyond books, but evolved toward a strategic orchestrator role as the organization grew more complex and diverse.

Strategy governance emerges as another critical factor. At 40% of companies in BCG's database, strategy governance hasn't been defined at all. By contrast, nearly all top performers have taken this step. This governance includes clear reporting lines (64% of CSOs report directly to the CEO) and defining how the strategy organization works with the business.

The Collaboration Imperative

BCG's second key finding—that mastering collaboration is vital for strategy team success—deserves particular attention. Only 22% of companies surveyed were deemed to "collaborate effectively with the business," compared to 56% of top performers. This collaboration gap represents both a significant challenge and opportunity.

The strategy function essentially serves two internal clients: the business units it supports and the corporate board. Effective strategy teams must navigate this dual relationship skillfully. A Harvard Business Review study on strategic planning processes found that strategic plans often fail not because of flawed strategy but because of disconnects between strategy and execution—precisely the gap that strong collaboration helps bridge.

Microsoft's transformation under Satya Nadella provides a compelling case study. When Nadella became CEO in 2014, he refocused Microsoft's strategy team on closer collaboration with business units. This shift helped accelerate Microsoft's successful pivot to cloud computing and subscription-based services. The strategy team moved from being perceived as a corporate oversight function to a valued partner in business growth.

BCG's findings on organizational structure further support this collaboration focus. Top-performing strategy organizations tend to be predominantly centralized (60-80% of resources) while maintaining some decentralized presence. This hybrid approach allows them to balance corporate-level strategic thinking with business unit engagement.

However, BCG's research doesn't fully explore how technology and digital tools are transforming collaboration capabilities. Digital collaboration platforms, data visualization tools, and strategy execution software are increasingly enabling strategy teams to collaborate more effectively across geographies and business units. According to PwC research, digitally mature strategy teams are significantly better positioned to drive value through improved collaboration and data-driven insights.

The Skills Imperative: Finance, M&A, and Beyond

The third distinguishing factor BCG identifies is the presence of value-oriented skills, particularly finance and M&A expertise. This finding challenges conventional wisdom that might prioritize strategic thinking or market knowledge as the most essential capabilities.

Underperforming strategy teams, according to BCG, fall short on fundamentals: they are 22% weaker in strategic thinking, 21% weaker in business know-how, and 19% weaker in communication skills. This suggests that while specialized value-oriented skills differentiate top performers, foundational capabilities remain table stakes.

Interestingly, BCG found that team diversity (in terms of gender, personal background, or culture) was not strongly correlated with performance. This finding merits scrutiny, as it appears to contradict substantial research showing diverse teams drive better decision-making and innovation. A 2019 McKinsey study found companies in the top quartile for gender diversity were 25% more likely to achieve above-average profitability than their peers.

The apparent contradiction may be explained by how diversity is leveraged. Simply having diverse team members isn't sufficient—the team must effectively harness diverse perspectives in decision-making processes. This nuance isn't fully explored in BCG's analysis.

As for team size, BCG notes that high-performing strategy teams tend to be about 50% larger than average. However, they correctly caution against assuming larger teams automatically perform better. Rather, high-performing teams likely earn the resources to grow by demonstrating value.

What's Missing: The Digital Dimension

A significant limitation of BCG's analysis is its relative silence on how digital transformation is reshaping strategy functions. Strategy teams today operate in a data-rich environment that both complicates their work and offers new possibilities for insight.

Deloitte's research on strategy function effectiveness highlights how data analytics capabilities have become essential for modern strategy teams. Advanced analytics enable strategy functions to move beyond periodic strategic reviews to continuous strategy refinement based on real-time market signals.

AI and machine learning tools are increasingly augmenting strategy teams' capabilities—from competitive intelligence gathering to scenario planning to strategic option evaluation. For example, Unilever's strategy team leverages AI-powered market sensing tools to identify emerging consumer trends across global markets, enabling more responsive strategy development.

BCG's finding that digital skills are not a significant differentiator between top and average performers may reflect that such capabilities are still maturing within most strategy functions. As these technologies become more pervasive, digital fluency will likely emerge as a critical success factor.

The Execution Gap: Where Strategy Teams Often Stumble

While BCG focuses primarily on how strategy teams are structured and skilled, they give less attention to how these teams drive execution—a critical dimension of strategy effectiveness. A 2015 Harvard Business Review study found that companies typically deliver only 63% of their strategy's potential performance because of execution gaps.

Modern strategy teams must increasingly span both strategy formulation and execution support. Bain & Company research indicates that strategy teams that stay engaged through implementation achieve significantly better results than those that hand off execution responsibility entirely.

General Electric's experience under former CEO Jeff Immelt illustrates this challenge. Despite having a sophisticated strategy function and clear strategic plans for digital transformation, GE struggled with execution, ultimately leading to significant underperformance. The strategy team developed compelling visions but couldn't effectively translate these into operational reality across GE's diverse businesses.

By contrast, IBM's strategy function redesign under CEO Arvind Krishna explicitly bridged strategy and execution. The team was restructured to include not just traditional strategists but also implementation specialists who could help business units operationalize strategic initiatives around cloud computing and AI.

Building a High-Performing Strategy Team: A Practical Roadmap

Based on BCG's research and additional insights, here's a practical roadmap for CEOs and CSOs looking to build high-performing strategy teams:

1. Define a Clear Mandate

• Assess your company's most pressing strategic needs: strategic direction, resource allocation, execution discipline, or innovation
• Select a primary mandate that addresses these needs, resisting the temptation to assign multiple mandates
• Explicitly communicate this mandate to both the strategy team and the broader organization
• Review and potentially adjust the mandate as the business evolves

2. Establish Clear Governance

• Define reporting lines (ideally with the CSO reporting directly to the CEO)
• Establish clear decision rights for the strategy team versus business units
• Implement formal processes for strategy development, resource allocation, and performance monitoring
• Create explicit feedback mechanisms to assess strategy effectiveness

3. Foster Effective Collaboration

• Implement a hybrid organizational structure with 60-80% centralized resources
• Embed strategy team members within key business units to build relationships and understanding
• Create formal collaboration mechanisms (joint planning sessions, regular touchpoints)
• Deploy digital collaboration tools to enable seamless interaction
• Measure and reward collaborative behaviors

4. Build Value-Oriented Skills

• Ensure the strategy team has strong finance and M&A capabilities
• Develop a mix of industry experts and functional specialists
• Consider rotating high-potential operational leaders through the strategy function
• Invest in data analytics and digital capabilities
• Build a diverse team and actively leverage different perspectives

5. Bridge Strategy and Execution

• Involve the strategy team in implementation planning, not just strategy formulation
• Create mechanisms to monitor strategy execution and identify roadblocks
• Establish clear metrics for measuring strategy implementation progress
• Implement regular strategy review sessions focused on execution challenges
• Build feedback loops to refine strategy based on implementation learnings

Case Study: Unilever's Strategy Function Transformation

Unilever provides an instructive example of strategy function evolution. Under CEO Alan Jope, Unilever transformed its strategy organization from a traditional planning function to a more dynamic capability supporting the company's purpose-led growth agenda.

The transformation included three key elements that align with BCG's findings:

1. Mandate Clarity: Unilever's strategy team was given a clear mandate as a portfolio manager, focused on evaluating and shaping the company's brand portfolio to align with its sustainability-driven purpose.
2. Enhanced Collaboration: The strategy function was restructured to include both centralized resources and embedded strategy partners within key business divisions. This hybrid approach improved collaboration between corporate strategy and business units.
3. Value-Oriented Skills: Unilever strengthened its strategy team's financial modeling and M&A capabilities to support portfolio transformation, while also building new skills in digital analytics and sustainability assessment.

The results have been impressive. Unilever has successfully pivoted its portfolio toward higher-growth, purpose-led brands while maintaining strong financial performance. The strategy function played a central role in identifying acquisition targets that accelerated this transformation.

The Future of Strategy Teams

Looking ahead, several trends will likely reshape the role and structure of corporate strategy teams:

1. Increased Agility: Strategy teams will need to operate with greater speed and adaptability, shifting from annual planning cycles to more continuous strategy formulation and refinement.
2. Enhanced Data Capabilities: Advanced analytics, AI, and machine learning will become core capabilities for strategy teams, enabling more sophisticated market sensing and scenario planning.
3. Ecosystem Focus: Strategy teams will increasingly look beyond company boundaries to orchestrate broader ecosystems of partners, suppliers, and customers.
4. Talent Diversification: Successful strategy teams will bring together more diverse skill sets, including not just traditional strategy backgrounds but also design thinking, behavioral science, and technology expertise.
5. Execution Integration: The distinction between strategy formulation and execution will continue to blur, with strategy teams taking more active roles in implementation.

Conclusion: The CEO's Strategy Lever

BCG's research provides valuable insight into what makes strategy teams effective, highlighting the importance of clear mandate, strong collaboration, and value-oriented skills. These findings offer a useful starting point for CEOs and CSOs looking to enhance their strategy functions.

However, building a truly high-performing strategy team requires going beyond these fundamentals. In today's rapidly changing business environment, strategy teams must increasingly serve as the connective tissue between vision and execution, between corporate direction and business unit action, and between present capabilities and future opportunities.

For CEOs, an effective strategy organization represents a powerful lever for driving company transformation. When properly structured, skilled, and positioned, these teams can help translate leadership vision into tangible business results.

The central message is clear: strategy teams matter, but many are underperforming. By focusing on the key differentiators identified by BCG and addressing the additional dimensions outlined above, CEOs can transform their strategy functions from corporate afterthoughts into engines of competitive advantage.

As business complexity increases and disruption accelerates, having a high-performing strategy team isn't a luxury—it's a necessity. Those companies that get this right will be better positioned to navigate uncertainty, seize emerging opportunities, and deliver sustainable growth in an increasingly challenging business landscape.

For further insights into building high-performing strategy teams, consider exploring the detailed analysis by 2025 on the BCG website.

About the Author: This analysis was prepared by a business and leadership journalist with over 15 years of experience covering corporate strategy, organizational effectiveness, and executive leadership for major business publications.