Escape the “Hockey stick” trap: five potent strategic moves that spur growth

Abstract

Purpose

This interview with the authors of Strategy – Beyond the Hockey Stick offers their insights into a major problem which has bedevilled the strategy process in too many companies over the years - the combination of bold but delusional “hockey-stick” forecasts and timid strategic moves – a coupling that severely limits the impact of any strategy.

Design/methodology/approach

The McKinsey authors examined publicly available information on the world’s 2,393 largest companies, and plotted their average annual economic profit

Findings

They found that the curve is extremely steep at the both ends: those in the top quintile average some 30 times as much economic profit as those in the middle three quintiles.

Practical implications

One of the biggest pitfalls in the strategy process is this very human propensity for bold forecasts and timid actions. Strategy requires confronting uncertainly head-on by embracing the notion of probability by calibrating the odds of a strategy succeeding, building in explicit trigger points to re-examine decisions as we learn more. 10;

Originality/value

What has been largely missing from the literature is a study of the average-to-top transition based on an extensive data set, one that encompasses a greater range of performance profiles and average-to-top transition trajectories. This is the knowledge gap that Strategy Beyond the Hockey Stick: People, Probabilities, and Big Moves to Beat the Odds fills.

Citation

Leavy, B. (2020), "Escape the “Hockey stick” trap: five potent strategic moves that spur growth", Strategy & Leadership, Vol. 46 No. 4, pp. 11-20. https://doi.org/10.1108/SL-03-2018-0031