1166 Posts found for Source: McKinsey Quarterly

It’s difficult to solve, simultaneously, for the interests of employees, communities, suppliers, the environment, customers, and shareholders. Tensions and trade-offs abound as we strive to align our business and societal goals; to integrate that identity into the heart of our organizations; and to deliver on our purpose, including its measurement, management, and communication.

Content: Quotation | Authors: Arne Gast, Bill Schaninger, Bruce Simpson, Nina Probst, Pablo Illanes | Source: McKinsey Quarterly | Subject: Management

The mindsets of great problem solvers are just as important as the methods they employ. A mindset that encourages curiosity, embraces imperfection, rewards a dragonfly-eye view of the problem, creates new data from experiments and collective intelligence, and drives action through compelling show-and-tell storytelling creates radical new possibilities under high levels of unpredictability.

Content: Article | Authors: Charles Conn, Robert McLean | Source: McKinsey Quarterly | Subjects: Personal Development, Productivity / Work Tips

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

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

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

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

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

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

The age of the insular R&D organization is over. To serve as a company’s innovation engine, R&D strategy needs to be equipped for today’s fast-moving world.

Content: Article | Authors: Erik Roth, Joshua Katz, Philipp Ernst, Tom Brennan | Source: McKinsey Quarterly | Subject: Operations

Professor Edward I. Altman of the Stern School of Business, New York University, is a leading expert in credit and debt. He has written or edited two dozen books and more than 160 articles on finance, accounting, and economics. He is also the creator of the Altman Z-Score, developed originally as a means of predicting bankruptcy probabilities. McKinsey researchers successfully used the Z-Score to test … [ Read more ]

Content: Thought Leader | Author: Edward I. Altman | Source: McKinsey Quarterly | Subjects: Economics, Finance

Shortsighted solutions to recurring problems—antipatterns—often sabotage a company’s transformation.

Content: Article | Authors: Kartikeya Swami, Sven Blumberg, Thomas Delaet | Source: McKinsey Quarterly | Subjects: IT / Technology / E-Business, Organizational Behavior

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

There are many trade-offs that company managers struggle to make, in which neither a shareholder nor a stakeholder approach offers a clear path forward. This is especially true when it comes to issues affecting people who aren’t immediately involved with the company. These so-called externalities—perhaps most prominently, a company’s carbon emissions affecting parties that otherwise have no direct contact with the company—can be extremely challenging … [ Read more ]

Content: Quotation | Authors: Marc H. Goedhart, Tim Koller | Source: McKinsey Quarterly | Subjects: Management, Social Responsibility (ESG)

Companies need to balance rapidly changing consumer and market needs with relevant product experiences. Enter the strategic integrator.

Content: Article | Authors: Jeff Salazar, Rob Loughlin, Scott Woodruff | Source: McKinsey Quarterly | Subject: Marketing / Sales

Excellent CEOs form a small group of trusted colleagues to provide discreet, unfiltered advice—including the kind that hasn’t been asked for but is important to hear. They also stay in touch with how the work really gets done in the organization by getting out of boardrooms, conference centers, and corporate jets to spend time with rank-and-file employees. This is not only grounding for the CEO, … [ Read more ]

Content: Quotation | Authors: Carolyn Dewar, Martin Hirt, Scott Keller | Source: McKinsey Quarterly | Subject: Corporate Governance

Exemplary CEOs combine the reality of what they ought to do in the role with who they are as human beings. They deliberately choose how to behave in the role, based on such questions as: What legacy do I want to leave? What do I want others to say about me as a leader? What do I stand for? What won’t I tolerate? CEOs answer … [ Read more ]

Content: Quotation | Authors: Carolyn Dewar, Martin Hirt, Scott Keller | Source: McKinsey Quarterly | Subjects: Corporate Governance, Management

Excellent CEOs increase their companies’ agility by determining which features of their organizational design will be stable and unchanging (such features might include a primary axis of organization, a few signature processes, and shared values) and by creating dynamic elements that adapt quickly to new challenges and opportunities (such elements might include temporary performance cells, flow-to-work staffing models, and minimum-viable-product iterations).

Content: Quotation | Authors: Carolyn Dewar, Martin Hirt, Scott Keller | Source: McKinsey Quarterly | Subjects: Management, Organizational Behavior

Vendors of workforce surveys like to say that employee engagement is the best measure of “soft stuff.” It’s not. While employee engagement indeed correlates with financial performance, a typical engagement survey covers less than 20 percent of the organizational-health elements that are proven to correlate with value creation. A proper assessment of organizational health takes in everything from alignment on direction and quality of execution … [ Read more ]

Content: Quotation | Authors: Carolyn Dewar, Martin Hirt, Scott Keller | Source: McKinsey Quarterly | Subject: Organizational Behavior

Of the 50 most value-creating roles in any given organization, only 10 percent normally report to the CEO directly. Sixty percent are two levels below, and 10 percent sit farther down. Most surprising of all is that the remaining 10 percent are roles that don’t even exist. Once these roles are identified, the CEO can work with other executives to see that these roles are … [ Read more ]

Content: Quotation | Authors: Carolyn Dewar, Martin Hirt, Scott Keller | Source: McKinsey Quarterly | Subjects: Corporate Governance, Human Resources, Organizational Behavior, Succession Planning

Resource reallocation isn’t just a bold strategic move on its own; it’s also an essential enabler of the other strategic moves. Companies that reallocate more than 50 percent of their capital expenditures among business units over ten years create 50 percent more value than companies that reallocate more slowly.

Content: Quotation | Authors: Carolyn Dewar, Martin Hirt, Scott Keller | Source: McKinsey Quarterly | Subject: Finance