Strategy Beyond the Hockey Stick: People, Probabilities, and Big Moves to Beat the Odds Hardcover – February 6, 2018
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Strategy Beyond the Hockey Stick: People, Probabilities, and Big Moves to Beat the Odds Hardcover – February 6, 2018

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4.4

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F**D

Power Plays

As Plato proclaimed, the true measure of a man is what he does with power. Executives need to be deliberative as they wield the powers vested in them - inherited or acquired. This book presents a strategy narrative that’s easy to imbibe - with good excerpts from previous McKinsey publications and academia. The authors reframe SWOT as Endowments (size) and Trends (industry growth), and put forth 'odds of success' of Big Moves (e.g., M&A) – using a Power Curve.Every Hockey Stick of growth has a mirror image, and that’s what makes the Power Curve. Can odds be predicted based on a probability distribution built on aggregated corporate data? If the data is predominantly from Asia, how applicable is that in America? Does knowing the number for yesterday’s lottery winner help? As the authors warn, “the way to make a move on the Power Curve is a hockey stick. The challenge is telling a real one from a fake one.” The readers are left wondering about the odds of success of any chosen strategy in their unpredictable industry settings - more so because the book does not fully explain the methodology or report statistical significance on the findings.As proof (QED) of a company’s power to move to the top quintile of the power curve, the authors offer PCC, an aircraft component company. They assert that this medium-sized company had 76% probability of moving up the Power Curve. The company found itself in a high growth industry segment; acquired companies, reallocated resources, improved productivity and increased prices – resulting in a 27% CAGR in TRS relative to 7% for S&P (2005-2014).A contemporary counter example to PCC is AT&T, that too found itself propelled by a megatrend. During 2012-2021, the telecommunications giant made the four strategic moves recommended in the book. Even with the strong inheritance and high odds (74%) of staying at the top, the telco’s Big Moves resulted in an inverted hockey stick – with TRS far below S&P. AT&T’s underperformance runs against the logic of the Power Curve, undermining the explanatory power of the model. In fact, the Power Curve is just a clever transmutation of a Bell Curve (a symmetrical probability distribution created by eliminating outliers such as Apple) with even odds for each strategic move. As the authors acknowledge, “there is no predictive power in this analysis for PCC’s performance looking forward.”One conclusion from this empirical research seem to be that Trend matters - with industry explaining 40% to 60% of economic profits. However, that remains unproven as the units of analysis are global corporations operating across multiple industries. Then again, the formulation detracts from the well understood executive view of Strategies as the bridge between Organizational characteristics (SW) with the changing Environments (OT). The authors assumed away execution capabilities (strengths) and the direct impact of counter-moves by competitors (threats). As a famous scientist formulized in 1687 - for every move there is an equal and opposite move. How predictable are those moves in the dynamic world of business? So the prescriptions in this book are reasoned conjecture, not based on relevant empirical evidence or a holistic strategy model.In short, this book is not the ‘Principia Strategica’ that executives have been waiting for. Must read – if you enjoy a caricature on the state of strategy with hockey sticks in the background (illustrated with irreverent cartoons). Anyhow, envision where the puck will be as you swing the hockey sticks - power plays have long term consequences.

S**M

Love the concept but a little dry

It has all the right ingredients of a fabulous book. It took me two tries to completely understand as the writing style is a little different for my taste. Amazing content and concepts though.

A**I

Brilliant and hilarious

This is one of the best books on strategy I have ever read. It's sarcastic yet brutally honest, filled with real stories from boardrooms of the biggest companies. I was surprised to find that it was published by McKinsey & Company as it openly mocks (especially big) companies for how they define and execute strategy. Having said that, it should not be ones first ever book on strategy. I'd advise to read a few standard books on strategy first, and only then read this one. Otherwise the reader might develop unhealthy preconceptions about forming and executing strategy, before getting to know the theory well enough.

J**E

This is a fantastic read which unveils some key insights on the reality ...

This is a fantastic read which unveils some key insights on the reality of 'the social side of strategy' which is endemic in today's large scale enterprises. In order to make 'big moves' and reduce the likelihood of the infamous 'hairy back', executives need to pay greater attention to the behavioral characteristics inside the corporate boardroom which prevent firms from truly delivering economic value beyond the middle of the pack.I recommend this for corporate strategists and any c-level executive in search of achieving a real 'hockey stick'.

J**G

Tricks we all play

As a corporate executive, I have made the mistake of not planning or treating planning work as a burden. Most companies treat planning or strategising as list their wishes and slogans. These are terrible mistakes. I have learned a bit from this book. The tricks managers play in competition for resources are well analysed in this book. Thanks.

R**E

Missed a whole sector and several sizes of businesses

The beginning of the book was good as it talked about the social aspects of strategy and how we can get in our own way. I was, however, disappointed to find that this book doesn't take into account financial firms (not in the data) and isn't terribly useful for small to medium businesses. I tried to continue anyway but ended up stopping reading it.

A**D

I just finished reading the book and really enjoyed the read

I just finished reading the book and really enjoyed the read. It somehow confirms some of the basic ideas of strategy formulation and implementation, in terms of the need to have a coordinated efforts on multi fronts to have a successful strategy, but concentrated in 10 levers that the authors believe make the biggest impact.The authors concluded that companies that made it to the top of a Power Curve (a curve that ranks companies on their ability to create economic profits, with the ones on the top generating exponentially more economic profit than the 2300 or so companies in the sample) shared a similar characteristics in using 10 levers that contributed the most in the success of companies. If the statistical analysis of the presented results are correct (I assume they are, but have no mean to confirm or disagree), this view gives a good yard stick to compare companies from different industries and sizes on their ability to create value, and could be used as a guide post in strategy formulation to achieve better results. The authors referred to the social side of strategy (cognitive biases, status quo...etc) and their effect on strategy formulation and resources allocation, and contend that, used correctly, the Power Curve could be used to "de-bias" and have constructive discussions on strategy. The authors finally propose 8 shifts in the way strategy exercises are conducted, to improve the process and increase the chances of success.Overall very interesting read, and i think the recommendations are practical and implementable, and could be used in strategy discussions in all companies!

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