McKinsey on Strategy to Beat the Odds
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- Create Date：2021-08-25 09:54:09
- Update Date：2025-09-06
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- Author：Chris Bradley
- ISBN：1119487625
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Summary
In McKinsey on Strategy to Beat the Odds， partners from McKinsey channel the latest insights in behavioral economics to demystify the social side of strategy。 A strategy can be sound on paper， having the right models and theories supporting it， but if there is a disconnect between leadership and employees， then the strategy is destined to fail。 This book teaches leaders how to have more fruitful conversations with their teams， bridging the gap between theory and application。 Ultimately even the wisest of strategies is challenged by individual behaviors and social dynamics。 The team must be fully on-board with， and passionate about， the strategy to make it happen。 Leaders will learn how to create and sell strategies so that they have their team's full support and their ideas are honored and implemented throughout their organization。
Reviews
Cristóbal Daly
，
Buen modelo， pero lo importante del libro viene en los primeros capítulos， después ya no sé si vale demasiado la pena。
Tobias Weghorn
，
An interesting read for people thinking about corporate strategy， or even stock investing。Some of my takeaways:Where to play is the most important influence on moving up the power curve of profit distribution。 Mediocre companies riding the right waves will outperform great companies in a non-growing industry。 Focus strategy conversation on big moves， for example screwed resource reallocation on 1/10 initiatives - instead of budgets。 This avoids "we did X last year， so this year we'll do X plus a An interesting read for people thinking about corporate strategy， or even stock investing。Some of my takeaways:Where to play is the most important influence on moving up the power curve of profit distribution。 Mediocre companies riding the right waves will outperform great companies in a non-growing industry。 Focus strategy conversation on big moves， for example screwed resource reallocation on 1/10 initiatives - instead of budgets。 This avoids "we did X last year， so this year we'll do X plus a little"。 Big moves are less risky than not moving at all （according to data）。 Budgeting usually kills bold strategies and leads to insufficient resource allocation to many instead of sufficient resources for one big opportunity。 Make sure to have resources for big moves by freeing up budget through productivity gains every year。 。。。more
Daniel Noventa
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Decent read。 A tad repetitive with a few concepts， and not in an overt， “with a purpose” manner。 Requires some pre-existing knowledge to get underneath some jargon。
Pablo Cañadas
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En un estudio de casi 2，400 empresas a lo largo de diez años， los tres autores logran vincular la utilidad económica con el desempeño de las empresas más exitosas… y las menos） y recomiendan la fórmula para aumentar las probabilidades de conseguir un resultado de palo de hockey。 Pero no todo se trata de vender y de recibir un sí al momento de desarrollar la estrategia， sino que también debemos fijarnos en el lado social de la estrategia。 En el libro， los autores nos explican los riesgos de sobre En un estudio de casi 2，400 empresas a lo largo de diez años， los tres autores logran vincular la utilidad económica con el desempeño de las empresas más exitosas… y las menos） y recomiendan la fórmula para aumentar las probabilidades de conseguir un resultado de palo de hockey。 Pero no todo se trata de vender y de recibir un sí al momento de desarrollar la estrategia， sino que también debemos fijarnos en el lado social de la estrategia。 En el libro， los autores nos explican los riesgos de sobreprometer proyectos e ideas y nos proponen una opción más atrevida a la hora de asignar presupuestos。 。。。more
Deepak
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The book presents a data-backed deconstruction of what drives breakthrough company performance。 While some of the data points are very specific （e。g。 what share of market cap to spend on MnA）， the broad principles are directionally helpful for any company building its strategic roadmap。Key points - Strategy discussions fall apart because - a） of the social side of strategy - a beauty contest， b） focus only on the inside view Economic profit is a good measure of the performance of a company。 It i The book presents a data-backed deconstruction of what drives breakthrough company performance。 While some of the data points are very specific （e。g。 what share of market cap to spend on MnA）， the broad principles are directionally helpful for any company building its strategic roadmap。Key points - Strategy discussions fall apart because - a） of the social side of strategy - a beauty contest， b） focus only on the inside view Economic profit is a good measure of the performance of a company。 It is the net profit less the opportunity cost of capital。Industry accounts for 50 percent of a company’s performance。。。 better to be an average player in a good industry。Corporate peanut butter - need to make a few bold bets than spread yourself out thin。Like Satya Nadella’s move on cloud business within Microsoft。Endowment （current size， debt position） accounts for 30%， trends （industry growth， geography growth） account for 25% and big moves account for 45% of a company ‘s move up the power curve。 Industry trends is one of the most important factors - need to get ahead of them！5 Big moves : MnA - 1 deal per year at least， which cumulatively accounts for less than 30 percent of market cap over 10 years， with no individual deal being higher than 30 percent of market capProgrammatic MnA - where there is a structured approach to evaluating， negotiating， closing。 Cannot be one off。 WPP made 271 acquistions over the sample period of 10 years！Resource re allocation- more than 50 percent over a decade is the minimum threshold， Danaher top management spends 50 percent of its time on resource allocation decisionsCapex - your capex to sales ratio should be 1。7x or higher than indistry average for a decadeProductivity improvement : 25% above industry median neededDifferentiation - gross margin 30% higher than the industry average over a decadeBreaking the social side of strategy:t⁃tMake strategy an ongoing thingt⁃tPresent a bunch of scenarios than just one optiont⁃tBuild out opportunity map at a granular level - should have 30-100 cellst⁃tBuild a momentum case that extrapolates the current baseline without any big movest⁃tConversations in the strategy room as well as resource allocation should be centred around big movest⁃tMake an 80 percent budget 。。。 20 percent sliver of the budget should be contestable （an alternative to zero based budgeting）t⁃tMake the performance management more holistic / not just “you are your numbers”; Reflect in incentives also 。。。more
wayne sadin
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Practical， actionable， factual Strategic Planning guideI've read many strategy & strategic planning books over the years。 Finally there's a book that's driven by analyses rather than anecdotes， and that lays out a straightforward--if intellectually and socially challenging--set of steps that can propel a firm forward in a competitive and fast-changing environment。 Practical， actionable， factual Strategic Planning guideI've read many strategy & strategic planning books over the years。 Finally there's a book that's driven by analyses rather than anecdotes， and that lays out a straightforward--if intellectually and socially challenging--set of steps that can propel a firm forward in a competitive and fast-changing environment。 。。。more
Marcell Nimführ
，
The first part is good for all sizes， the second half is focused on super large corporations。 This would be a 3-star book but it gets one extra since it is based on a large study done by the authors。 Data eats experience for breakfast 。
Karthik Tammana
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An interesting take on strategy。 I particularly liked the analytical work presented to illustrate how the key 10 drivers determine the movement of a company on the power curve。
Jean
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This book aims to investigate what often stands in the way of executing a good strategy to deal with uncertainty。 The book cites empirical evidence from their research on thousands of companies to identify ways to help tackle the “social side of strategy”。 The hockey stick often entails conservatism for the first few years， followed by an aggressive spike in the longer term。 While old habits and norms in the strategy room might be hard to change， the book provides certain useful tips and reminde This book aims to investigate what often stands in the way of executing a good strategy to deal with uncertainty。 The book cites empirical evidence from their research on thousands of companies to identify ways to help tackle the “social side of strategy”。 The hockey stick often entails conservatism for the first few years， followed by an aggressive spike in the longer term。 While old habits and norms in the strategy room might be hard to change， the book provides certain useful tips and reminders on improving dynamics for better strategy formulation。Recognizing the inherent flaws of strategy processesMost inefficiencies of strategy arise as they involve conditions that we are not well placed to deal with。 Behavioral economics suggests that this is mostly due to our irrational tendencies。 Our reliance on unconscious biases and heuristics do not play in our favor when dealing with high uncertainty， with our limited experiences crippling us， or external factors distorting our predictions。 These problems are amplified by social dynamics， which sees different variations of the agency problem。 Having an outside view in order beat the marketThis involves finding a useful yardstick （such as revisiting the importance of economic profit as a metric） to measure returns and growth。 To stay relevant， we would also need to compare ourselves on a competitive scale that recognizes the indifference of capital。Picking the right industryIndustry plays a critical role; it is better to be an average company in a great industry than a great company in an average industry。Anchoring in the realities of the business and the evolving context Overconfidence， blind extrapolation， competition for resources， the treadmill of rising expectations， and the desire for “stretch” goals are some of the reasons cited for bold forecasts （hockey stick dreams）。 Specifically， they tend to revolve around not having a proper baseline， errors in attributing performance due to noise， and how we tend to deal with uncertainty。 The later parts of the book are focused on figuring and increasing the odds of a good strategy， which are mainly classified into three things: resource endowment， industry trends and the moves we make。As a takeaway， the authors suggest eight shifts to address the social side of strategy:1。 Have regular strategy dialogues instead of an annual planning meeting， and have a rolling plan to update as you move2。 Debate real alternatives instead of just getting to yes， so that as we track assumptions over time， we can build contingencies into our plans and evolve our choices appropriately 3。 Focus on your break-out opportunities instead of spreading resources too thin4。 Make big moves that are calibrated against the competition instead of just approving budgets5。 Free up resources ahead of time to avoid budget inertia6。 Be open about your portfolio risks instead of sandbagging7。 Take a holistic performance view instead of focusing on just the numbers; this involves encouraging noble failures and reflecting probabilities in incentives。 as risk goes up， we may want to reward individuals based on team performance to minimise individual risk aversion8。 Force the first step by breaking down big moves into shorter-term objectives and making sure that resources needed are in placeOverall， I found the book to be quite insightful into what happens at board rooms and the problems that strategists typically encounter。 I would say this book is worth a read if you are looking for ways to dissect and improve your strategy planning process。 A bonus: To lighten what would be a sombre topic， there were cartoons peppered throughout the book for some tongue in cheek humor。 。。。more
Lucas Malambri
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Empirically driven insights point to practical advice for those looking to understand what drives profitable growth and how to navigate the murky social side of the strategy discussion and decision making。
Ryan Campbell
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Best practical advice on strategy periodA no regret read！ Combines quantifiable theory with very practical steps to apply。 Strategy is hard。 This teaches you how to make a system。
Rafael Ramirez
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Uno de los mejores libros que hay sobre estrategia empresarial。 A diferencia de la mayoría de los textos sobre este tema， sus autores， consultores de McKinsey & Co， no se limitan a describir una serie de anécdotas o viñetas de empresas exitosas sino que fundamentan sus recomendaciones en un análisis estadístico a conciencia de los factores que explican en gran medida la capacidad de producir resultados excepcionales， basados en datos del performance de empresas públicas en las últimas décadas。 U Uno de los mejores libros que hay sobre estrategia empresarial。 A diferencia de la mayoría de los textos sobre este tema， sus autores， consultores de McKinsey & Co， no se limitan a describir una serie de anécdotas o viñetas de empresas exitosas sino que fundamentan sus recomendaciones en un análisis estadístico a conciencia de los factores que explican en gran medida la capacidad de producir resultados excepcionales， basados en datos del performance de empresas públicas en las últimas décadas。 Uno de los aprendizajes del libro es ver （como era de esperarse en base a la teoría económica） cómo la competencia hace que la mayoría de las empresas no logren obtener ganancias económicas sino que a duras penas obtengan utilidades para cubrir su costo de capital， mientras que son pocas las que logran una utilidad económica considerable， lo cual es una muestra que son pocas las empresas que logran una verdadera ventaja competitiva。 Los autores explican cuáles son las principales palancas que tienen los directores para convertir a la suya en una de esas pocas empresas excepcionales。Es interesante ver cómo esta misma distribución se da a nivel industria， lo cual nos hace ver la importancia de que los directores de empresa sepan por un lado， escoger los sectores más propicios donde participar， lleven a cabo esfuerzos disciplinados y consistentes de re-asignación de capital y un programa de adquisiciones y des-incorporaciones， y por otro， la relevancia de desarrollar la capacidad de detectar las tendencias （positivas o negativas） que afectan a una industria antes que los demás y， sobre todo， tener la capacidad de actuar en consecuencia de una manera ágil y efectiva。Un libro que no debe faltar en la biblioteca de cualquier director de empresa que aspire a una gestión exitosa de su negocio。 。。。more
J
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3。5 stars good book offering an insight from McKinsey on strategy mostly data driven approach to separate/ deal with personal interest from company strategy
Kishore
，
Identifies the key ingredients to make a winning strategy with evidence from industry。
SOUMYAJIT MISRA
，
A must read for business leadersThis is a very well structured book。 It is full of practical and actionable insights to bring life into strategy rooms。 The suggestions are clear and to the point and are backed with lots of data and metrics。 I could easily relate with problems mentioned in this book and could get a clear picture of what changes I can bring in my workplace in the coming days。
tridiv ojha
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One of the good books on strategy with a a different view on measuring the success and odds of strategy。 The mention of endowments & trends and moves coupled with parameter of measurement is a different take。 A different book amongst a lot of strategy books
Mike Sheketa
，
For the last few years I was looking for something to help me to understand why companies win or fail。 I've started with From Good to Gread （of course;）， then In Search of Excellence， then Strategy& book Strategy That Works， How Companies win， etc。 Those are great books written with excellent style。 But at the end of the day， I was looking for a fact-based system I can start working with immeadiately。 And so far Strategy Beyong the HS is my favorite one （together with strategy map systen and bal For the last few years I was looking for something to help me to understand why companies win or fail。 I've started with From Good to Gread （of course;）， then In Search of Excellence， then Strategy& book Strategy That Works， How Companies win， etc。 Those are great books written with excellent style。 But at the end of the day， I was looking for a fact-based system I can start working with immeadiately。 And so far Strategy Beyong the HS is my favorite one （together with strategy map systen and balanced scorecard from The Strategy Focused Organizations by Norton and Kaplan）。 I'm not saying that this book provides all the answers， but it provides structure how to find the answers。 I would add that this book is not about strategy （in sense， how to get from point A to point B）， but it's rather about strategic thinking （what pieces of information you shoud have in mind to craft great strategy）。 This book is not for genereal audience， it's very practicable stuff。 I would very reccomend it for CEOs， strategy officers and consultants。 。。。more
Ton Nguyen
，
Strategy Beyond the Hockey Stick is definitely not a popular business book intended for a general audience， but for strategy consultants or executives working in corporate strategy （at Fortune 500 fims）。 McKinsey has collected a lot of data on corporate performance over the years。 I liked that the authors gave examples of firms other than your standard Kodak， Apple， etc。 Unfortunately I also felt a lot of it was used as filler for the book。 That being said， there are some useful insights on why Strategy Beyond the Hockey Stick is definitely not a popular business book intended for a general audience， but for strategy consultants or executives working in corporate strategy （at Fortune 500 fims）。 McKinsey has collected a lot of data on corporate performance over the years。 I liked that the authors gave examples of firms other than your standard Kodak， Apple， etc。 Unfortunately I also felt a lot of it was used as filler for the book。 That being said， there are some useful insights on why strategies often fail which makes it worth reading。 。。。more
Brat
，
I had stumbled upon this book at an airport store， and then again stumbled upon it on a McKinsey article with an excerpt。 The anecdote that the book begins with seemed like such a reflection of what happens on a daily level in a corporate。 Chris Bradley， the author， has a fresh take on how strategy should be formed and conducted in a corporate。The book talks about the social side of strategy where managers are compelled to play games to ensure their agendas are met， and thus it is the job of the I had stumbled upon this book at an airport store， and then again stumbled upon it on a McKinsey article with an excerpt。 The anecdote that the book begins with seemed like such a reflection of what happens on a daily level in a corporate。 Chris Bradley， the author， has a fresh take on how strategy should be formed and conducted in a corporate。The book talks about the social side of strategy where managers are compelled to play games to ensure their agendas are met， and thus it is the job of the CEO/ board to be see through the social side and accordingly form the strategy。 Strategy is formed during “an exhausting marathon of strategy sessions that are supposed to be discussions but really are just presentations”While the book starts off well， with clear hypothesis and happenings in the board room when the strategy formulation is in place， it falls awfully short in the latter half， and repetitive to the point of irritation。One good learning from the book was the hockey stick itself， and the hair that forms on the hockey stick year after year。 A reality explained in such a simple manner。 Most managers， for instance， will try to secure resources for the coming year while deferring accountability for the returns on these investments as far as possible into the future—maybe even long enough that people will have forgotten about the original commitments， or that they themselves will have moved on to the next position。Data can be managed to further one’s own interest。 Like he mentions an incident when all BU leaders showed themselves as number 1 or number 2， by redefining the segment/market they are operating in。 Market share can be defined favorably by excluding geographies or segments where the presenter’s business unit is weakThe importance of allocating resources in the most important projects rather than having a peanut butter approach。 He talks about classic examples of Kodak which faced extinction as it did not move when there was disruption。 “。。traditional film business had been generating gross margins of more than 60 percent for a long time。 It was hard to cannibalize a business that had sustained those performance levels for decades—especially because the margins in any consumer electronics business were expected to be much lower”most successful organizations fail to look for new things their customers want because they’re afraid to hurt their core businesses。 “Companies rarely die from moving too fast， and they frequently die from moving too slowlyThe top decision makers， who usually come from the biggest business centers， resist having their still-profitable （though more sluggishly growing） domains starved of resources in favor of unproven upstarts。The book talks about eight shifts that a company needs to do， to ensure they have a sound strategy process and remain at the peak of their game。 In a nutshell， 1。tAnnual Planning to Strategy as a journey2。tGetting to “yes” to debating real alternatives3。tPeanut butter to picking your 1-in-10s4。tApproving budgets to making big moves5。tBudget inertia to liquid resources6。tSandbagging to open risk portfolios7。tYou are your numbers to holistic perspective on performance8。tLong-range planning to forcing the first stepThere are some impressible quotes in the book， that I have highlighted below - •tThe goal of strategy needs to be to move to the right on the Power Curve。•tthere is uncertainty， and strategy is about how to deal with it。•tTrying to improve your strategic decision making is like trying to improve your golf game by practicing blindfolded， and not finding out if your ball went into the hole for 3 years。•tyou’d rather be an average company in a great industry than a great company in an average industry•tmost of us are much more willing to forgo a large upside to avoid a small downside•tPower Curve is highly relevant even for personal career choices， requiring people to be conscious about the position of an industry on the Power•tGerman sausage effect”: You squeeze on one end， and the fat sloshes to the other end。•tDe-bias decision making。 Warren Buffett is said to operate with red and blue teams， even at times hiring two investment banking teams to evaluate a possible acquisition。 One argues in favor， the other againstComing from a consultant， the book also refers to some good interesting reads。 Listing down the ones that I had highlighted – 1。tStrategy: A history， Freedman Lawrence2。tThe innovator’s dilemma3。tGood Strategy/Bad Strategy， Richard Rumelt4。tCo-opetition， Adam M Brandenburger5。tThe lords of strategy6。tAntifragile7。tThe signal and the noise8。tDecline and fall of the roman empire9。tOn war， carl von Clausewitz10。tThe strategy of conflict， Thomas Shilling11。tJack: Straight from the gut12。tSuperforecasting13。tThe halo effect and the eight other business delusions that deceive managers14。tThe modern firm， John Roberts15。tBig Blues: the unmaking of IBM16。tUnderstanding Media : the extension of man 。。。more
Carl Rannaberg
，
Very good book about creating strategy based on data and facts and avoiding common traps like spreading resources too thin。 Goes together nicely with “Thinking in Bets” as it also highlights the importance of probabilities。
Hannamari
，
Damn this data-driven and modern take on corporate strategy was good。 There something beautiful in drawing insights from the vast amounts of data on corporate strategy and success that McKinsey has access to。 Excellent insights on what really drives company success （e。g。 the industry you are is the single most important factor） and for to improve odds of success （e。g。 focusing budget on big bets and changing the cycle of strategy work from annual to continuous）。
Scott Wozniak
，
This is an excellent book on strategy--if you're a multi-billion dollar corporation， that is。 McKinsey consultants ran a study on what strategic moves actually made a difference for large companies。 They flat out said that you need to be $7。5 billion in revenue before the study actually makes sense for you。 （The giant consulting firms like McKinsey are so expensive they only work with the largest firms， so that's their data set。）But there are some good insights under all the MBA/Fortune 500 jarg This is an excellent book on strategy--if you're a multi-billion dollar corporation， that is。 McKinsey consultants ran a study on what strategic moves actually made a difference for large companies。 They flat out said that you need to be $7。5 billion in revenue before the study actually makes sense for you。 （The giant consulting firms like McKinsey are so expensive they only work with the largest firms， so that's their data set。）But there are some good insights under all the MBA/Fortune 500 jargon:-The biggest factor is your industry， not your strategy。 If it's growing， lean into that growth and push hard。 If it's flat/declining， don't try to make crazy growth happen。 You'll get poor returns on your growth investment。-The key to winning your competitive market is to make bigger moves than your competitors in key areas。 That means you can't take small steps in multiple areas。 You need to over-invest in a smaller number of improvement projects。 Ideally， they said to invest 50% more than your competitors in at least one area。-The key to making strategic choices is having liquidity。 You have to free up money for special projects， so you can't have it all locked down on standard budget increases。 You also have to free up staff time to work on the strategic projects。Again， I enjoyed it a lot。 I do strategy work for all sizes of companies。 But it's not written for non-Fortune 500 companies， so you have to translate a lot if you don't work with them。 。。。more
Helena
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Loved the no-BS appraoch to strategy。
Abdullah Al-Abri
，
متاب رائع ومبني على دراسات من شركة مكينزي ممتاز جدا للشركات الي تنظر للتطوير
Christian Mahncke
，
tangible and actionable。
Bryan
，
Real world challenges tackled Love the approach here。 Makes a ton of sense and each scenario is relatable to any strategy room。 Just excellent。
Allisonperkel
，
I may be part f a niche group that benefits from this book - with that it is a very interesting look into Corp strategy and how to be better
Claire
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Really great thoughts - based on research。 Still thinking how it applies to international aid sector。
Peter
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Data-based examination of the ingredients of successful business strategy， along with a practical guide to their application。 It’s as close to a recipe book for success as you’re likely to encounter。 One caveat， why weren’t financial companies in the data set， and do the lessons apply to them too？
Vikash Thakur
，