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 strategywhich thousands of executives are already usingis 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 performancewhere 60% of companies reside, making very little economic profitto the top quintile where 90% of global economic profit is made. This movement does not happen by magicit 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 bookI 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
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 Roomand 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
Whats 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
Cornings 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
