Cracking the growth code: The ten rules of growth explained
Experts behind the rules of value-creating growth discuss how leaders can apply these insights to their growth strategies.
Content: Article | Authors: Chris Bradley, Rebecca Doherty | Source: “McKinsey Quarterly” | Subjects: Best Practices, Management, Strategy
Growth rules: Which matter most?
Ten rules should guide how companies select pathways to profitable growth, but each rule’s impact on performance varies considerably.
Content: Article | Authors: Chris Bradley, Jill Zucker, Rebecca Doherty, Tido Röder | Source: “McKinsey Quarterly” | Subjects: Best Practices, Strategy
Chris Bradley, Rebecca Doherty
If you can achieve consistent growth, that’s the surest ticket to outperformance, but only 10 percent of companies manage to do that over a decade. Those that can’t should consider a strategy we call “shrink to grow.” This is like pruning back and then growing from there. Over a ten-year period, you may have one or two major dips in your growth that represent large … [ Read more ]
Content: Quotation | Authors: Chris Bradley, Rebecca Doherty | Source: “McKinsey Quarterly” | Subjects: Management, Strategy
The Ten Rules of Growth
Empirical research reveals what it takes to generate value-creating growth today.
Content: Article | Authors: Chris Bradley, Nicholas Northcote, Rebecca Doherty, Tido Röder | Source: “McKinsey Quarterly” | Subject: Strategy
Chris Bradley, Marc de Jong, Wesley Walden
About one-third of US companies reallocate no more than 1 percent of their resources from year to year. Whether through bias, office politics, or plain old inertia, they simply roll this year’s plan into next year. It should, by now, go without saying that this is a terrible starting position from which to expect transformative change. Companies can escape the cycle by creating target portfolios, … [ Read more ]
Content: Quotation | Authors: Chris Bradley, Marc de Jong, Wesley Walden | Source: “McKinsey Quarterly” | Subjects: Finance, Management
Chris Bradley
We have to reengineer how we evaluate people, particularly in risky contexts. Rather than “you are your numbers,” take a holistic performance view. How do we make sure noble failures get rewarded and dumb luck does not?
Content: Quotation | Author: Chris Bradley | Source: “McKinsey Quarterly” | Subjects: Human Resources, Management, Organizational Behavior, Risk Management
Chris Bradley
Dan Lovallo is a professor who works in applying psychology on biases to management topics. A simple test he did at an investment bank showed that if you applied the CEO’s risk tolerance to all the investment decisions made at lower levels rather than the more junior decision makers’ risk tolerance, the decisions would have had a 32 percent better outcome. So, there is this … [ Read more ]
Content: Quotation | Author: Chris Bradley | Source: “McKinsey Quarterly” | Subjects: Management, Organizational Behavior, Risk Management, Strategy
Chris Bradley
If you want to really drive strategic change in your company, you should be its chief liquidity officer. You can’t move resources that aren’t liquid. In other words, you cannot reallocate if you don’t also de-allocate.
Content: Quotation | Author: Chris Bradley | Source: “McKinsey Quarterly” | Subjects: Management, Strategy
Chris Bradley
Often, we think the hard part of strategy is that we have to guess the future. I think the hard part of strategy is busting your own myths. The most important question a strategist can ask is, why do we make the money?
Content: Quotation | Author: Chris Bradley | Source: “McKinsey Quarterly” | Subject: Strategy
Chris Bradley
The harsh reality of the way we do strategic planning now is, there is a pot of money and we all compete for it. But when we did our research on companies that rose up the power curve, we found that it usually was not the whole company improving but one or two out of ten business units that disproportionately went up. It’s just a … [ Read more ]
Content: Quotation | Author: Chris Bradley | Source: “McKinsey Quarterly” | Subjects: Management, Strategy
Chris Bradley
It’s extraordinarily important to know what is going to happen next month, what resources need to move, and what initiatives you have to launch. The problem is, that’s a different mode of thinking from strategy. As soon as you put strategy and planning together, planning will always win.
Content: Quotation | Author: Chris Bradley | Source: “McKinsey Quarterly” | Subjects: Management, Planning, Strategy
Chris Bradley
The first big test of strategy is: Does your strategy beat the market? And by that, what we really mean is, did you generate economic profit, which is the evidence that you overcame perfect markets? Because—and perhaps this is a scary flashback to your economics textbooks—in perfect markets there is no economic profit. The residual of market imperfections, or what we call competitive advantages, is … [ Read more ]
Content: Quotation | Author: Chris Bradley | Source: “McKinsey Quarterly” | Subjects: Economics, Strategy
Why Your Next Transformation Should be ‘All In’
Improve the odds of a successful business transformation by going “all in” to kick-start performance and remake your portfolio.
Content: Article | Authors: Chris Bradley, Marc de Jong, Wesley Walden | Source: “McKinsey Quarterly” | Subjects: Best Practices, Management, Strategy
Life on the Power Curve
How to Make the Bold Strategy Moves that Matter
What does it take to make a true performance leap? The authors of Strategy Beyond the Hockey Stick explain the key strategic levers their analysis has revealed, and how strongly you have to pull them.
Content: Article | Authors: Chris Bradley, Martin Hirt, Sean Brown, Sven Smit | Source: “McKinsey Quarterly” | Subjects: Best Practices, Management, Strategy
Chris Bradley, Martin Hirt, and Sven Smit
To deliver the message that people will not be punished simply because a high-risk plan did not pan out, we suggest developing an “unbalanced scorecard” for incentive plans that has two distinct halves. On the left is a common set of rolling financials with a focus on two or three (such as growth and return on investment) that connect to the economic-profit goals of the … [ Read more ]
Content: Quotation | Authors: Chris Bradley, Martin Hirt, Sven Smit | Source: “McKinsey Quarterly” | Subjects: Human Resources, Management
Chris Bradley, Martin Hirt, and Sven Smit
The best way to create [a rolling strategic plan] is to hold regular strategy conversations with your top team, perhaps as a fixed part of your monthly management meeting. To make those check-ins productive, you should maintain a “live” list of the most important strategic issues, a roster of planned big moves, and a pipeline of initiatives for executing them. At each meeting, executives can … [ Read more ]
Content: Quotation | Authors: Chris Bradley, Martin Hirt, Sven Smit | Source: “McKinsey Quarterly” | Subject: Strategy
Chris Bradley, Martin Hirt, and Sven Smit
It is nearly impossible to make the big moves that successful strategies require if resources are thinly spread across all businesses and operations. Our data show that you are far more likely to achieve a major performance improvement when one or two businesses break out than when every business improves in lockstep. You have to identify those breakout opportunities as early as possible and feed … [ Read more ]
Content: Quotation | Authors: Chris Bradley, Martin Hirt, Sven Smit | Source: “McKinsey Quarterly” | Subjects: Finance, Strategy
Chris Bradley, Martin Hirt, and Sven Smit
Messy, fast-changing strategic uncertainties abound in today’s business environment. The yearly planning cycle and the linear world of three- to five-year plans are a poor fit with these dynamic realities. Instead, you need a rolling plan that you can update as needed.
In our experience, the best way to create such a plan is to hold regular strategy conversations with your top team, perhaps as a … [ Read more ]
Content: Quotation | Authors: Chris Bradley, Martin Hirt, Sven Smit | Source: “McKinsey Quarterly” | Subject: Strategy
Chris Bradley, Martin Hirt, Sven Smit
It’s essential to track assumptions over time. A few short weeks after the plan is developed, the detailed assumptions go into a fog of memory. The variance to budget gets tracked very carefully, but the underlying assumptions—such as uptake rates, market growth, or inflation rates—are not assessed as carefully. Rather, decide what you can today, with the information you have, and build explicit trigger points … [ Read more ]
Content: Quotation | Authors: Chris Bradley, Martin Hirt, Sven Smit | Source: “McKinsey Quarterly” | Subjects: Management, Strategy