Inside the Strategy Room 255. Building transformation momentum through working capital optimization
28 snips
Jun 13, 2025 Jacob Rüden and Marvin Denis, transformation experts at McKinsey with extensive experience in cash management, discuss how optimizing working capital can drive early wins in organizational transformations. They emphasize the importance of aligning operational goals with financial metrics and share actionable strategies across sectors like automotive and retail. Key insights include the role of inventory management and AI in improving efficiency, and fostering a culture focused on cash performance to sustain momentum in transformations.
AI Snips
Chapters
Transcript
Episode notes
Cross-Functional Role in Working Capital
- Working capital optimization involves almost everyone in the organization, not just finance.
- Collaboration across finance, procurement, and commercial leaders is essential to unlock cash and working capital.
Fast Impact of Working Capital
- Top performing transformations achieve roughly 28% of impact in 3 months and over 50% in 6 months.
- Focusing on working capital can generate very fast, impactful results alongside revenue and cost improvements.
Complexity in Cash Management
- Cash flow management is challenging due to mismatched payment terms with customers and suppliers.
- Rising interest rates make traditional working capital levers, like extending payment terms, more difficult to execute.