29 Posts found for Author: Sven Smit

Economic and political turbulence have prompted speculation that the world is already deglobalizing. But the evidence suggests that global integration is here to stay, albeit with nuance.

Content: Article | Authors: Hamid Samandari, Jeongmin Seong, Jonathan Woetzel, Michael Birshan, Olivia White, Sven Smit, Tiago Devesa | Source: McKinsey Quarterly | Subjects: Economics, International, Trade

A dual focus on developing people and managing them well gives a select group of companies a long-term performance edge.

Content: Article | Authors: Anu Madgavkar, Bill Schaninger, Dana Maor, Hamid Samandari, Jonathan Woetzel, Kanmani Chockalingam, Olivia White, Sven Smit | Source: McKinsey Quarterly | Subjects: Best Practices, Human Resources, Training & Development

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

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

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

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

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

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

We found that your industry’s performance is responsible for almost half of your position on the [economic profit] power curve. Industry impact is so substantial, in fact, that you would be better off as an average company in a great industry than a great company in an average industry. But here is the kicker: mobility on the curve is possible—but rare. The odds of a … [ Read more ]

Content: Quotation | Authors: Chris Bradley, Martin Hirt, Sven Smit | Source: McKinsey Quarterly | Subjects: Management, Strategy

At some level, it is easy for the CEO to deal with uncertainty by playing the portfolio game of spreading investment like peanut butter around numerous businesses, knowing that not every bet has to pay off for the total plan to work. The problem is that a portfolio game on the corporate level becomes a matter of all-in commitment for an individual-business-unit leader. We have … [ Read more ]

Content: Quotation | Authors: Chris Bradley, Martin Hirt, Sven Smit | Source: McKinsey Quarterly | Subjects: Human Resources, Management, Strategy

Uncertainty is not only everywhere in and around strategy—it is the very reason we need strategy. Without uncertainty, we would just need a plan to go from A to B.

Content: Quotation | Authors: Chris Bradley, Martin Hirt, Sven Smit | Source: McKinsey Quarterly | Subject: Strategy

Developing a great strategy starts with changing the dynamics in your strategy room. Here’s how.

Content: Article | Authors: Chris Bradley, Martin Hirt, Sven Smit | Source: McKinsey Quarterly | Subject: Strategy

Business strategy, at its heart, is about beating the market; that is, defying the power of “perfect” markets to push economic surplus to zero. Economic profit—the total profit after the cost of capital is subtracted—measures the success of that defiance by showing what is left after the forces of competition have played out.

Content: Quotation | Authors: Chris Bradley, Martin Hirt, Sven Smit | Source: McKinsey Quarterly | Subjects: Economics, Strategy

Developing a great strategy starts with changing the dynamics in your strategy room. Here’s how.

Content: Article | Authors: Chris Bradley, Martin Hirt, Sven Smit | Source: McKinsey Quarterly | Subject: Strategy

Lack of certainty about the future is the very reason you need a strategy. Instead, embrace probability.

Content: Article | Authors: Chris Bradley, Martin Hirt, Sven Smit | Source: McKinsey Quarterly | Subject: Strategy

We identified ten performance levers and, importantly, how strongly you have to pull them to make a real difference in your strategy’s success. We divided these levers into three categories: endowment, trends, and moves. Your endowment is what you start with, and the variables that matter most are your revenue (size), debt level (leverage), and past investment in R&D (innovation). Trends are the winds that … [ Read more ]

Content: Article | Authors: Chris Bradley, Martin Hirt, Sven Smit | Source: McKinsey Quarterly | Subject: Strategy

Business leaders typically spend about 30 percent of their time on external engagement, but by their own assessment, few do so effectively. For more business leaders to “step up to the plate” and “play a key role in driving solutions,” they will need to do more to embed society’s concerns in their business priorities, to make external engagement an integral part of their strategy, and … [ Read more ]

Content: Quotation | Authors: Ezra Greenberg, Martin Hirt, Sven Smit | Source: McKinsey Quarterly | Subjects: Social Responsibility (ESG), Strategy

That broad narrative of intensifying competition, as well as the growing need for cooperation, contains challenges, but also great opportunity. We hear about the challenges every day in our conversations with global business leaders: How long can their traditional sources of competitive advantage survive in the face of technological shifts? How will changing consumer and societal expectations affect their business models? What does it mean … [ Read more ]

Content: Article | Authors: Ezra Greenberg, Martin Hirt, Sven Smit | Source: McKinsey Quarterly | Subjects: Economics, Trends / Analysis

Growth is shifting, disruption is accelerating, and societal tensions are rising. Confronting these dynamics will help you craft a better strategy, and forge a brighter future.

Editor’s Note: by its nature, this is a topical article but I think the analysis provided is interesting and I think it will still be worth reading in future years to see how accurate it turns out to be. … [ Read more ]

Content: Article | Authors: Ezra Greenberg, Martin Hirt, Sven Smit | Source: McKinsey Quarterly | Subject: Trends / Analysis

A consistent finding in our research is that about 75 percent of all growth is a function of the markets in which businesses compete—portfolio momentum—and the acquisitions they initiate. In other words, just 25 percent of a company’s growth typically comes at the expense of competitors. We highlighted this analysis before the market downturn in 2008, and it has continued to hold true since then. … [ Read more ]

Content: Quotation | Authors: Sven Smit, Yuval Atsmon | Source: McKinsey Quarterly | Subjects: General, Management, Strategy