Ari Libarikian, Senior Partner at McKinsey & Company and global lead of Leap by McKinsey, discusses the importance of new business building and the steps to take to build scalable businesses from scratch.
One widely-held belief at consulting firm McKinsey is that business building is a requirement for growth, not an option. That’s why the company set up Leap by McKinsey, a dedicated business building practice that helps clients find business value and scale new business opportunities.
Ari Libarikian, who joined McKinsey after grad school and has spent 17 years with the firm, is the global lead of Leap and explains the vision behind its launch.
“We’ve done analysis looking at the largest companies and looking at the Fortune 500 lists and [other] lists like that. On the Fortune 20, if you compare that list today to 20 years ago, you find that it’s 90% different,” says Ari. “Every company on the list today is basically a serial business builder. It was either a startup in the last 15 years and scaled massively or it was successful before and continued to reinvent itself through business building.”
Business building is one of the most successful growth tools companies have at their disposal—whether that means creating a distinct new business, a subsidiary, or continually reinventing the offerings of an existing business.
For each engagement, Leap consultants help clients with every aspect of digital business building.
A few years ago, for example, a pizza giant needed to go digital. Leap helped the company build an app, collect customer feedback, integrate new technology to process orders, staff digital positions, and make iterative and impactful decisions every step of the way -- eventually increasing online conversions and creating a digital business that today generates a majority of the chain’s revenue.
The one commonality between the different engagements is that all business building, if done right, must be rooted in a larger strategy. “What’s really important is business building has to be anchored and rooted in the strategy of the company. Ultimately, the purpose of a new business build is to help deliver the enterprise strategy,” Ari says. “Ground the new business build in an idea that creates real value. We’re not chasing shiny objects here.”
In this episode, you’ll learn a lot about prioritizing strategic directions, digital transformation, and business building.
Here are the highlights:
Why today’s fast-moving digital world necessitated the launch of Leap by McKinsey (5:21)
The stages involved in a Leap digital transformation project (9:12)
How Leap helped a pizza giant build a digital business from scratch (15:19)
Key things to consider when launching a business building effort (19:19)