Inside the Strategy Room 255. Building transformation momentum through working capital optimization
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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.
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Engage Operations in Inventory Goals
- Operations teams need clarity on inventory, availability, and performance targets.
- Aim for higher product availability while reducing net inventory to gain buy-in and improve working capital.
Build Momentum with Quick Wins
- Implement quick cash and working capital wins within weeks to build transformation momentum.
- Use early successes to fund growth, investments, or acquisitions in the overall transformation.
Leverage Process Levers for Cash
- Improve payables by optimizing payment timing and ensuring contracts align with ERP data.
- Enhance receivables via faster, accurate invoicing and reduce overdues through process improvements.