Strategy Beyond the Hockey Stick

Beat the odds with a bold strategy
 
We've all seen hockey stick business plans before. A future where results sail confidently upward, but with a dip coinciding with next year's budget.
 
CEOs usually rely on their experience and business smarts to figure out which of those hockey sticks are real, and which are fake. But all too often getting to a "yes," competing for resources, and striving to claim credit, cloud the hard decisions. Another strategy framework? No thanks, we already have plenty of those, and they don't fix the real problem: the social dynamics in your strategy room.
 
Mining the data from thousands of large companies, McKinsey Partners Chris Bradley, Martin Hirt and Sven Smit open the windows of that room, and bring an "outside view." They found three discrete groups of companies: the bottom quintile with massive economic losses; the long, flat, middle 60 percent with practically no economic profit; and the top 20 percent to whom all the value accrues.
 
Some companies do achieve real hockey stick performance: but just 1-in-12 jump from the middle tier to the top over a ten year period. This does not happen by magic--there is an empirically-backed science to improve your odds of success by capitalizing on your endowment, riding the right trends, and most importantly, making a few big moves.
 
To make these big moves happen, you're going to have to break through inertia, gamesmanship and risk aversion. You're going to have to mitigate human biases and manage group dynamics. Eight practical shifts can help you do this, and unlock bigger, bolder, better strategies.
 
This is not another by-the-book approach to strategy. It's not another trudge through frameworks or small-scale case studies promising a secret formula for success. It's an irreverent, fact-driven, and humorous take on the real world of strategic decision making.

List 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-ra

About the author

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.

Summary

Beat the odds with a bold strategy

We've all seen hockey stick business plans before. A future where results sail confidently upward, but with a dip coinciding with next year's budget.

CEOs usually rely on their experience and business smarts to figure out which of those hockey sticks are real, and which are fake. But all too often getting to a "yes," competing for resources, and striving to claim credit, cloud the hard decisions. Another strategy framework? No thanks, we already have plenty of those, and they don't fix the real problem: the social dynamics in your strategy room.

Mining the data from thousands of large companies, McKinsey Partners Chris Bradley, Martin Hirt and Sven Smit open the windows of that room, and bring an "outside view." They found three discrete groups of companies: the bottom quintile with massive economic losses; the long, flat, middle 60 percent with practically no economic profit; and the top 20 percent to whom all the value accrues.

Some companies do achieve real hockey stick performance: but just 1-in-12 jump from the middle tier to the top over a ten year period. This does not happen by magic--there is an empirically-backed science to improve your odds of success by capitalizing on your endowment, riding the right trends, and most importantly, making a few big moves.

To make these big moves happen, you're going to have to break through inertia, gamesmanship and risk aversion. You're going to have to mitigate human biases and manage group dynamics. Eight practical shifts can help you do this, and unlock bigger, bolder, better strategies.

This is not another by-the-book approach to strategy. It's not another trudge through frameworks or small-scale case studies promising a secret formula for success. It's an irreverent, fact-driven, and humorous take on the real world of strategic decision making.

Product details

• Authors: Bradley, Chris Bradley, Bradley Chris, Martin Hirt, Matin Hirt, Sven Smit, Smit Sven
• Publisher: Wiley, John and Sons Ltd
• Languages: English
• Product format: Hardback
• Released: 28.02.2018
• EAN: 9781119487623
• ISBN: 978-1-119-48762-3
• No. of pages: 256
• Dimensions: 159 mm x 236 mm x 20 mm
• Subjects: Social sciences, law, business > Business > Management; Management, Wirtschaft, Verhaltensökonomie, Business & management, Verhaltensökonomik, Wirtschaft u. Management, Spezialthemen Wirtschaft u. Management, Business & Management Special Topics