Strategy Beyond the Hockey Stick People, Probabilities, and Big Moves to Beat the Odds

by Bradley, Chris; Hirt, Martin; Smit, Sven

• ISBN13: 9781119487623
• ISBN10: 1119487625
• Edition: 1st
• Format: Hardcover
• Copyright: 2018-02-06
• Publisher: Wiley

Summary

Beat the odds with a bold strategy from McKinsey & Company

"Every once in a while, a genuinely fresh approach to business strategy appears"
—legendary business professor Richard Rumelt, UCLA

McKinsey & Company's newest, most definitive, and most irreverent book on strategy—which thousands of executives are already using—is a must-read for all C-suite executives looking to create winning corporate strategies.

Strategy Beyond the Hockey Stick is spearheading an empirical revolution in the field of strategy. Based on an extensive analysis of the key factors that drove the long-term performance of thousands of global companies, the book offers a ground-breaking formula that enables you to objectively assess your strategy's real odds of future success.

"This book is fundamental. The principles laid out here, with compelling data, are a great way around the social pitfalls in strategy development."
—Frans Van Houten, CEO, Royal Philips N.V.

The authors have discovered that over a 10-year period, just 1 in 12 companies manage to jump from the middle tier of corporate performance—where 60% of companies reside, making very little economic profit—to the top quintile where 90% of global economic profit is made. This movement does not happen by magic—it depends on your company's current position, the trends it faces, and the big moves you make to give it the strongest chance of vaulting over the competition.

This is not another strategy framework. Rather, Strategy Beyond the Hockey Stick shows, through empirical analysis and the experiences of dozens of companies that have successfully made multiple big moves, that to dramatically improve performance, you have to overcome incrementalism and corporate inertia.

"A different kind of book—I couldn't put it down. Inspiring new insights on the facts of what it takes to move a company's performance, combined with practical advice on how to deal with real-life dynamics in management teams."
—Jane Fraser, CEO, Citigroup Latin America

Author Biography

SVEN SMIT is a Senior Partner in Amsterdam. He leads McKinsey Western Europe and, before that, led McKinsey's Strategy Practice. He is the co-author of the bestselling book Granularity of Growth.

MARTIN HIRT is a Senior Partner in Greater China. He leads McKinsey's Global Strategy & Corporate Finance Practice.

CHRIS BRADLEY is a Partner in Sydney. He leads McKinsey's Business Strategy service line.

Table of Contents

Introduction: Welcome to the Strategy Room 1

You are not alone 2

The villain is the social side of strategy 4

Where is the outside view? 6

Making big moves happen 8

The journey ahead of us 9

1. Games in the Strategy Room—and Why People Play Them 13

The social side of strategy, in action 15

The dreaded hockey stick 17

Can we handle the truth? 20

Playing the inside game 21

Send in the guru 22

The wrong problem for human brains 23

The biased mind 25

Now add social dynamics to the mix 27

When the inside view remains unchecked 31

2. Opening the Windows of Your Strategy Room 37

The right yardstick 40

Your business lives on a Power Curve 42

What we see on the map 44

Why you are where you are 49

A fresh perspective with the outside view 53

3. Hockey Stick Dreams, Hairy Back Realities 57

The rise of the hairy back 58

Getting to yes 60

A haircut from finance 60

Bold forecasts 62

Timid plans 68

Corporate peanut butter 70

Shooting for the known 70

Real hockey sticks 72

4. What are the Odds? 75

The knowable probability of success 77

Flight paths of the upwardly mobile 80

A tale of three companies 83

Where are the odds in the strategy room? 85

The push for certainty 87

You are your numbers 89

5. How to Find the Real Hockey Stick 93

What’s different this time? 94

Check the facts 95

The odds that matter: Yours 96

The 10 variables that make the difference 99

Endowment 100

Trends 101

Moves 102

It all matters 103

The mobility dashboard 105

Know the odds 109

Is that all? 110

6. The Writing is on the Wall 115

A very different conversation about strategy 118

Tennis or badminton? 119

Industries are escalators 120

Change your industry or change industries 123

Consider changing locations, too 124

Go micro 125

The need for privileged insights 127

Acting on the writing on the wall 128

The four stages of a disruptive trend 130

Stage one: Signals amid the noise 132

Stage two: Change takes hold 134

Stage three: The inevitable transformation 136

The hardest stage 136

Stage four: Adapting to the new normal 139

7. Making the Right (big) Moves 143

Big moves are essential 146

Corning’s story 150

Programmatic M&A and divestitures 150

Active resource re-allocation 152

To re-allocate, you have to de-allocate 156

Strong capital programs 156

Caution on capex 158

Distinctive productivity improvement 158

Running fast and getting nowhere 159

Differentiation improvement 162

Are you playing to your advantage? 165

Big moves make for good strategy 166

8. Eight Shifts to Unlock Strategy 173

From annual planning ... to strategy as a journey 175

From getting to “yes” ...  to debating real alternatives 177

From peanut butter ... to picking your 1-in-10s 181

From approving budgets ... to making big moves 184

From budget inertia ... to liquid resources 188

From sandbagging ... to open risk portfolios 190

From “you are your numbers” ... to a holistic performance view 193

From long-range planning ... to forcing the first step 196

The package deal 198

Epilogue: New Life in the Strategy Room 201

Acknowledgments 205

Appendix 207

About our sample and method 207

A note on economic profi t and total returns to shareholders 209

How the odds look different from the top or bottom 209

Life at the top 211

Life at the bottom 211

Notes 215

Index 227