Latest / Best of LinkedIn: Strategy, M&A & Investments / Best of LinkedIn: Strategy & Consulting CW 18/ 19

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Best of LinkedIn: Strategy & Consulting CW 18/ 19 · Best of LinkedIn: Strategy, M&A & Investments

• 0:00
  Speaker 0: Provided by Thomas Allgeier and Frennus, based on the most relevant LinkedIn posts about strategy in consulting from calendar weeks eighteen to nineteen.
• 0:09
  Speaker 0: Frenness is a B-to-B market research company supporting consultancies with the Market & Competition perspective for example in commercial due diligence or CDD.
• 0:19
  Speaker 0: City D engagements.
• 0:20
  Speaker 0: don't forgive slow starts.
• 0:22
  Speaker 0: Frenis embeds directly into your consulting team as a white-label market and competitive intelligence partner, slide ready fully adapted to your client's design and operational within twenty four hours.
• 0:33
  Speaker 0: You can find more info in the description
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  Speaker 1: Right, so with that out of the way let's jump in.
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  Speaker 0: Yeah exactly!
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  Speaker 0: So you have to hold a training session to teach your employees how to execute your new corporate strategy while uh...your strategies already failed.
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  Speaker 0: Oh
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  Speaker 1: absolutely it is dead on arrival
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  Speaker 0: right?
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  Speaker 0: So today we are doing deep dive into the silent killers of corporate execution.
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  Speaker 0: We're basically cutting through all the noise.
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  Speaker 0: bring you top strategy and consulting trends across linkedin over past two weeks.
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  Speaker 1: Yeah, and the mission for today is to really look under-the-hood of how businesses are actually operating right now.
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  Speaker 0: Keep it smart keep it focused And you know just skip the fluff.
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  Speaker 1: Exactly!
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  Speaker 1: We're starting directly at The Foundation because I mean You cannot execute a highly complex M&A deal or like A massive AI transformation if your underlying corporate engine Is just sputtering
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  Speaker 0: It won't work.
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  Speaker 1: And that insight you just mentioned about the training session, That comes from Zulia Sakibu.
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  Speaker 1: Zulaya makes an argument that strategy fails when execution isn't built into formulation form day one.
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  Speaker 0: Okay let's unpack this because in a lot of board rooms you know formulation and execution are treated as two entirely different phases.
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  Speaker 0: Oh
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  Speaker 1: completely!
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  Speaker 0: They're usually handed off to entirely different teams.
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  Speaker 0: You have people who draw them out then they actually drive their car.
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  Speaker 0: Are we saying the map makers need to be driving?
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  Speaker 1: Well, it means a properly formulated strategy inherently contains its own execution guide.
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  Speaker 1: Right The departments that will actually do the work they have to participate in translating That corporate vision into their operational reality while
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  Speaker 0: the planning is happening
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  Speaker 1: exactly during the planning phase.
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  Speaker 1: Yeah because if they aren't in the room you get what Olga Patapsiva calls an operating model gap wearing a strategy hat.
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  Speaker 0: I love that phrase!
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  Speaker 1: It's so accurate, right?
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  Speaker 1: She used omni-channel retail strategies as an example.
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  Speaker 1: like they rarely stall because the high level planning was bad They scall Because there is fundamentally broken operating model underneath it
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  Speaker 0: all.
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  Speaker 0: So what does actually look for you if your working inside one of these companies Six months post-approval, the roadmap is built.
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  Speaker 0: The executive sponsors are named but if you look closely digital marketing and physical operations Are all still running on their own legacy metrics?
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  Speaker 1: Yeah They haven't changed the incentives.
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  Speaker 1: Right
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  Speaker 0: Marketing is getting bonuses for digital clicks.
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  Speaker 0: Operations Is getting bonuses For cutting in store labor costs.
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  Speaker 0: You have absolutely no shared definition of what good actually looks like across those silos.
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  Speaker 1: No shared outcomes at all.
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  Speaker 0: It is exactly like handing a team a blueprint for a skyscraper, but nobody agrees on who operates the crane.
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  Speaker 1: Yeah or who pours the concrete?
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  Speaker 0: Exactly!
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  Speaker 0: Or how we even measure if foundation level.
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  Speaker 1: And when you leave those misaligned metrics in place I mean The organization just begins to rot from inside If... We connect this with the bigger picture.
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  Speaker 1: Zoe Carl-Wathaca Highlighted the four E's of corporate decline.
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  Speaker 0: The Four Is Okay.
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  Speaker 0: what are they?
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  Speaker 1: Ignorance Inertia Individualism and infighting.
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  Speaker 1: Wow,
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  Speaker 0: yeah that sounds about right.
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  Speaker 1: Let's just look at the mechanics of individualism over say a standard twelve month timeline.
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  Speaker 1: Month one across functional project launches Month three, friction arises between departments because like you said their incentives just don't align.
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  Speaker 0: Right marketing wants one thing ops want another
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  Speaker 1: Exactly.
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  Speaker 1: and by month six rather than elevating that conflict to leadership To actually get it resolved department heads retreat into their silos to protect their own P&L
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  Speaker 0: to survive.
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  Speaker 0: Yeah
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  Speaker 1: And my month twelve.
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  Speaker 1: the strategy is dead not because the market rejected It but because individual survival trumped enterprise success.
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  Speaker 1: You
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  Speaker 0: know I would argue that as a direct failure of leadership.
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  Speaker 0: If department heads are retreating to their silos, the leaders aren't demanding the right
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  Speaker 1: things.
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  Speaker 1: That's fair point.
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  Speaker 0: Rajesh Sethi shared a really honest reflection about this exact dynamic.
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  Speaker 0: He realized that by trying to be the chief empathy officer, meaning he was acting as a shield To protect his team from corporate friction.
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  Speaker 0: He was actually destroying their effectiveness.
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  Speaker 1: He called it building organizational debt didn't they?
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  Speaker 0: Right exactly By absorbing the friction of a struggling project himself You know jumping into snoo things over or just do the hard work for them.
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  Speaker 0: He wasn't being a good leader.
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  Speaker 0: He was subsidizing underperformance
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  Speaker 1: and turning himself in to a bottleneck.
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  Speaker 0: Exactly authentic leadership means raising the standard.
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  Speaker 0: It means demanding clarity, forcing those tough conversations about misaligned metrics out into the open and frankly preparing your team to resolve conflict when you aren't in their
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  Speaker 0: room.".
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  Speaker 0: But
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  Speaker 1: here is the trap right?
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  Speaker 1: A lot of leadership teams realize they're internal operating model is bogged down by that exact individualism an inertia.
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  Speaker 1: but instead doing a hard painful work to fix their internal engine They try.
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  Speaker 1: they look to inorganic growth.
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  Speaker 0: Oh, right!
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  Speaker 0: They turn to M&A?
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  Speaker 1: Yeah...they think if we just acquire or carve out this shiny new asset well that will fix our growth.
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  Speaker 1: but
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  Speaker 0: the reality of value creation and m&a and private equity right now is shifting incredibly fast.
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  Speaker 0: I was reading what Hannah Twist brought up about carveout strategies.
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  Speaker 0: she noted That you have to perfectly match The carve-out approach To the buyer type
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  Speaker 1: because PE and corporate buyers view the exact same asset in completely different ways.
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  Speaker 0: Exactly!
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  Speaker 0: A private equity liar is looking for a clean path to independence, right?
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  Speaker 0: They want day one readiness so they do not wanna rely on the seller's IT systems or HR departments a minute longer than necessary.
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  Speaker 1: Right...they wanna cut the cord.
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  Speaker 1: Yes
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  Speaker 0: But a corporate buyer is often willing to pay a synergy premium meaning their paying extra because they assume that can merge the acquired company sales team with supply chain and save money.
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  Speaker 1: And because of that, they expect to integrate the asset on their own terms usually in a much longer timeline.
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  Speaker 1: Jay Hennig book calls pointed out that M&A value heavily depends on governance, but most integration models suffer from a mandate gap.
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  Speaker 0: A mandate gap?
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  Speaker 0: Meaning they don't have the power to do what needs to be done.
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  Speaker 1: Exactly Committees are built to coordinate activity and schedule status updates.
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  Speaker 1: They're not actually empowered To resolve the severe trade-offs that Hannah Twist was talking about.
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  Speaker 1: So when a corporate buyer realizes their IT systems can easily swallow The new asset The government's board usually lacks the authority to make a hard, expensive pivot.
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  Speaker 0: And we are seeing corporates adjust their entire acquisition philosophy because of this.
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  Speaker 0: Sen, a Pidgett observed that India's M&A market has completely shifted away from opportunistic buying.
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  Speaker 0: Yeah, corporates are deliberately buying for specific capabilities and scale To reposition their portfolios rather than just snapping up cheap assets Because they're there.
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  Speaker 1: That makes a lot sense.
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  Speaker 1: But on the private equity sign There are massive structural hurdles suddenly popping up in the math itself.
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  Speaker 1: Eric DuVoisin highlighted a crucial Swiss federal Supreme Court ruling regarding LBO interest deductibility.
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  Speaker 0: Let's pause on that debt pushdown structures.
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  Speaker 0: We really need to be absolutely clear on the mechanics here.
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  Speaker 1: Yeah, it is fundamental structural awareness point for anyone because it puts immense pressure on those debt pushdown structures.
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  Speaker 0: Right, so normally a private equity firm buys a target company and they load the debt from that acquisition onto the Target Company's own books right?
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  Speaker 0: The Target Company then has to pay interest on that debt which obviously lowers their taxable income.
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  Speaker 0: It is very standard way to shield income from taxes.
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  Speaker 1: But this Swiss court ruling basically said that the interest expenses linked to that Acquisition Debt had to be added back for tax purposes.
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  Speaker 0: Wait really why?
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  Speaker 1: Because the debt wasn't commercially justified but what the target company actually does for a living.
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  Speaker 1: The deductibility analysis now has to be performed at the level of the merged entity based on its actual business activity
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  Speaker 1: post-merger.".
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  Speaker 0: Wow, that completely blows up traditional tax math for these deals?
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  Speaker 1: It really does!
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  Speaker 1: If you can't deduct interest your return on investment just plummets...
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  Speaker 0: So What is this all mean when external global shocks hit those carefully planned deals?
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  Speaker 0: because Corporate buyers struggling with mandate gaps, PE buyers facing regulatory attacks on their debt structures.
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  Speaker 0: And all of this is happening while global supply chains are just fracturing.
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  Speaker 0: Well,
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  Speaker 1: geopolitics has no longer a background issue.
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  Speaker 1: you can just hedge against.
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  Speaker 1: Nicholas S. Lange and Andreas Parshak both stress that geopolitics is now central to strategy...
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  Speaker 0: Central to it?
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  Speaker 1: Yeah!
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  Speaker 1: It's effectively core ESG issues right now.
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  Speaker 1: Companies were having to build dedicated in-house capabilities
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  Speaker 0: And you can see it in the numbers.
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  Speaker 0: Look at the data from Gregory Daco, The Middle East conflict is already constraining US business profits and hiring higher input materials costs are forcing nearly a quarter of us firms to scale back their investment plans right now.
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  Speaker 1: Yeah It's having very real impact.
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  Speaker 0: But I have ask though Is this just temporary spike?
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  Speaker 0: Because executives kind used waiting out geopolitical storms.
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  Speaker 0: You know
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  Speaker 1: Gina promotes perspective answers that pretty well.
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  Speaker 1: She reminds me managing these risks isn't just about temporary protection or compliance anymore.
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  Speaker 1: Taking an end-to-end view of geopolitical risk, really simplifying that complexity is actually how organizations grow with intent and speed today.
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  Speaker 0: Ah!
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  Speaker 0: So it's a growth lever not just a shield?
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  Speaker 0: Exactly
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  Speaker 1: the fragmentation is in temporary.
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  Speaker 1: It Is The New Operating Environment period Right,
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  Speaker 0: so to navigate these shrinking margins the fractured supply chains and the heavier tax burdens.
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  Speaker 0: The entire consulting in private equity world seems to be reaching for the exact same life raft which is artificial intelligence.
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  Speaker 1: Oh of course everybody's talking about AI
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  Speaker 0: But based on the insights from the past two weeks, most boardrooms are completely miscalculating how AI actually impacts the bottom
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  Speaker 1: line.
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  Speaker 1: Yeah Mark Byershoder provided a really harsh reality check on that.
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  Speaker 1: he pointed out that ninety percent of companies expect AI to reshape their business model but only five percent are actually using advanced egentic systems To redesign there end-to-end processes.
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  Speaker 0: Five percent!
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  Speaker 0: That's massive gap
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  Speaker 1: It is.
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  Speaker 1: The vast majority of companies are confusing higher adoption rates with true transformation.
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  Speaker 1: They think that because, you know their employees or using co-pilots to write emails faster the company's transforming.
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  Speaker 0: But if the company itself isn't working differently If the workflows and layers decision making Are exactly same as they were in twenty nineteen it Isn't a transformation.
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  Speaker 1: No its just productivity tool.
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  Speaker 0: And if you are sitting in a boardroom right now looking at an IT budget and assume your AI costs will scale linearly just like old software licenses did, You're walking into massive financial blind spot.
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  Speaker 1: Oh Nadine Charlon issued a stark warning about exactly that!
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  Speaker 1: She talked the five-year IT Budget Gap regarding AI runtime costs.
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  Speaker 0: Because it's not like sauce.
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  Speaker 1: Exactly Think of traditional sauce products...you pay flat fee per user.
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  Speaker 1: If that user logs in once a month or one hundred times per day, your cost remains flat.
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  Speaker 1: Right.
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  Speaker 0: Predictable
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  Speaker 1: But AI does not work this way.
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  Speaker 1: Every single query every autonomous workflow an agent executes overnight generates compute costs.
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  Speaker 1: Your costs scale with usage and complexity Not by headcount.
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  Speaker 0: Wait but computing power gets cheaper each year right?
• 12:10
  Speaker 0: Moore's law isn't just temporary pricing problem until the hardware catches up.
• 12:14
  Speaker 1: Well... The underlying compute gets cheaper yes But the complexity of tasks we are asking agents to perform is growing exponentially.
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  Speaker 1: Moving from a co-pilot that drafts an email, To autonomous agent who audits whole supply chain.
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  Speaker 1: That means massive spike in token usage and processing time
• 12:30
  Speaker 0: which brings up the existential debate happening in the advisory profession right now.
• 12:35
  Speaker 0: Sahil Perry pointed out that AI absolutely automates research, benchmarking and market sizing used to take junior consultants weeks to build.
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  Speaker 1: Right!
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  Speaker 1: The grunt work.
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  Speaker 0: Exactly but the true value of consulting remains purely human.
• 12:50
  Speaker 0: It is the judgment, it's having a hard-earned experience to look as CEO in the eye and tell them that this question they are asking isn't actually what they need answered.
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  Speaker 1: Ben T Smith took that logic even further.
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  Speaker 1: he completely dismissed the dorm room debates that AI will kill the consulting industry.
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  Speaker 0: Really?
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  Speaker 0: How
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  Speaker 1: so?
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  Speaker 1: He argued because AI increases effectiveness of consultants.
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  Speaker 1: demand for them would grow If the tools allow a consultant to deliver three hundred percent more impact in the same amount of time.
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  Speaker 1: Enterprise demand for that impact is essentially uncapped.
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  Speaker 0: I mean, i get That but I am kind of skeptical that human judgment will remain completely insulated.
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  Speaker 0: There Is A dark Side To All This Cognitive Offloading We're Doing.
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  Speaker 1: What's Fascinating Here Is Sol Rashidi'S Warning About what She Calls Intellectual Atrophy
• 13:39
  Speaker 0: Intellectural Atrophy.
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  Speaker 1: Yeah AI Is Quietly Eroding Our Tolerance For Hard Problems When you reach for an AI tool.
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  Speaker 1: before you even attempt to think through a complex problem yourself, You begin to lose your critical thinking skills.
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  Speaker 0: So we're just getting lazy?
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  Speaker 1: Essentially yes!
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  Speaker 1: Her advice is to outsource your tasks but never outsource Your Thinking.
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  Speaker 0: But what happens when a company loses its tolerance for hard problems?
• 14:05
  Speaker 0: As AI scales from being a simple assistant into these autonomous agentic AI systems, the technological foundation of a company is data.
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  Speaker 0: It's enterprise architecture that becomes the ultimate battleground for revenue.
• 14:17
  Speaker 0: Yeah.
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  Speaker 1: Neha Cabra shared a fascinating look at how Agentic AI directly threatens core banking revenue pools by destroying what is known as The Friction Gap.
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  Speaker 0: Okay, here's where it gets really interesting.
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  Speaker 0: The friction gap is one of the most reliable profit engines in the world right?
• 14:31
  Speaker 0: For decades retail banks have profited immensely from the fact that customers are busy and frankly a bit lazy.
• 14:38
  Speaker 0: think about the trillions of dollars sitting in checking accounts yielding zero point one percent interest
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  Speaker 1: making nothing
• 14:44
  Speaker 0: Exactly.
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  Speaker 0: Those customers could move their money to a high yield account making five percent, but you know filling out the forms and changing their direct deposits takes effort.
• 14:54
  Speaker 0: The bank literally relies on the customer's own inertia To maintain their profit margin.
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  Speaker 0: But
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  Speaker 1: AI agents do not have inertia.
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  Speaker 1: they can instantly compare rates read the fine print And move that money autonomously in milliseconds They systematically destroy that friction gap.
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  Speaker 1: Wow Yeah, Nat West in the UK is already launching guidance apps inside ChatGPT.
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  Speaker 1: The decision of where a customer puts their money is now forming way upstream before they ever even interact with traditional banking channels.
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  Speaker 0: But we are unleashing these autonomous engines to manage our money, order code and run our processes but don't actually have guardrails yet.
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  Speaker 0: Evan Benjamin shared data showing that sixty-three percent organizations cannot enforce purpose limits on AI agents.
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  Speaker 0: Sixty three percent.
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  Speaker 0: That is a staggering governance failure
• 15:41
  Speaker 1: it isn't?
• 15:41
  Speaker 1: I mean
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  Speaker 0: most companies are still relying entirely on identity controls.
• 15:45
  Speaker 0: They ask can this specific agent access?
• 15:49
  Speaker 0: This specific database?
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  Speaker 1: It is the difference between giving a valet The keys to park your car versus giving them the keys and realizing they could also drive into Vegas And sell it
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  Speaker 0: exactly.
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  Speaker 1: we're giving AI agents the keys toward enterprise systems without defining the destination.
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  Speaker 1: Regulators require purpose controls.
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  Speaker 1: They want to know, is this agent permitted to read the specific customer record for a specific purpose at that time?
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  Speaker 1: Right now agents have broad access to systems but lack those records level boundaries.
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  Speaker 0: The solution always comes back with underlying architecture.
• 16:23
  Speaker 0: Arvin Morely when he was summarizing takeaways from Informatical World in twenty-twenty six noted that enterprise conversation has entirely shifted from AI For Data to data for AI Meaning
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  Speaker 1: the data foundation had come first.
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  Speaker 1: Exactly, an AI agent needs metadata.
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  Speaker 1: It needs trusted identity.
• 16:39
  Speaker 1: it needs trusted context.
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  Speaker 1: if your enterprise data is a mess Your AI agents will hallucinate.
• 16:45
  Speaker 1: they will make catastrophic decisions and the trust in your operating model Will just completely break.
• 16:50
  Speaker 0: Christian Rausch echoed this perfectly regarding SAP cloud migrations.
• 16:55
  Speaker 0: so many executives still treat A cloud migration as a tedious IT checkbox.
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  Speaker 0: But keeping a clean core is no longer just about IT discipline.
• 17:04
  Speaker 0: Let's
• 17:04
  Speaker 1: define what a clean-core actually means in this context, because it's important.
• 17:08
  Speaker 1: Imagine buying a standard house and custom wiring at yourself so heavily over twenty years that when the power company tries to update the neighborhood grid your house catches fire?
• 17:18
  Speaker 0: That's great analogy!
• 17:19
  Speaker 0: Right
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  Speaker 1: – A Clean Core means sticking to standard non customized processes
• 17:23
  Speaker 0: Because without that clean core autonomous AI agents cannot function.
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  Speaker 0: If you have twenty years of heavily customized legacy code holding your supply chain together, an AI agent cannot plug into it without breaking it.
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  Speaker 0: A clean core is the fundamental price-of-admission if you want to operate a model that can survive for five more
• 17:39
  Speaker 0: years.".
• 17:40
  Speaker 1: And all this connects back with the foundation Zelya Sakibu mentioned at very beginning our deep dive...
• 17:45
  Speaker 0: Right!
• 17:45
  Speaker 0: The strategy and execution link.
• 17:47
  Speaker 1: Exactly…if infrastructure is flawed, intelligence layered on top will be flawed too.
• 17:54
  Speaker 1: Which actually brings me to my final thoughts from Doug Shannon.
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  Speaker 1: He pointed out that AI is no longer just a tool, it's quietly becoming infrastructure much like the global highway system.
• 18:06
  Speaker 1: The danger isn't to sci-fi robot apocalypse...the real danger is humanity gradually outsourcing our operational judgment into systems we simply stopped questioning because they have become the default.
• 18:19
  Speaker 0: That is a terrifying but incredibly important point because if AI is shaping our supply chains, or procurement and corporate governance we have to ask an uncomfortable question.
• 18:30
  Speaker 0: Whose cultural norms?
• 18:31
  Speaker 0: Who's laws?
• 18:32
  Speaker 0: And whose risk tolerances are you blindly accepting into your operations when you turn those systems on?
• 18:36
  Speaker 1: Exactly!
• 18:37
  Speaker 0: Are you actually running your own business or just renting the judgment of engineers who train infrastructure?
• 18:43
  Speaker 0: Definitely something to think about before your next graduation meeting.
• 18:45
  Speaker 0: Absolutely!
• 18:45
  Speaker 0: Well, if you enjoyed this deep dive new deep dives drop every two weeks.
• 18:49
  Speaker 0: also check out our other editions on private equity venture capital and M&A.
• 18:54
  Speaker 0: Thank You so much for joining us.
• 18:55
  Speaker 0: don't forget to subscribe And we will see you next time.