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1、OCTOBER2013MasteringthebuildingblocksofstrategyChrisBradley,AngusDawson,andAntoineMontardIncreaseyourlikelihoodofdevelopingeffectivestrategiesthroughanapproachthat’sthorough,action-oriented,andcomfortablewithdebateandambiguity.Leftunchecked,marketforcescontinuallyconspiretodepleteprofit
2、s.Powerfulbusinessstrategiescancounteractthosetendencies,butgoodstrategyisdifficulttoformulate.1Indeed,thelatestMcKinseyresearch(see“Thestrategicyardstickyoucan’taffordtoignore,”onmckinsey.com)findsthataverysmallnumberofcompaniescreatemosteconomicprofit.2Theresearchalsoshowsthatasignifi
3、cantnumberofgoodcompaniesoutperformeveninso-calledbadindustries,wheretheaverageeconomicprofitislessthanthemarketaverage.Howdotheydoit?Inotherwords,wheredopowerfulstrategiescomefrom?Sometimesit’sluck,orgoodtiming,orastrokeofinspira-tion.Inourexperience,it’salsopossibletoloadthediceinfavo
4、rofdevelopinggoodstrategiesbyfocusingonthecorebuildingblocksthatoftengetoverlooked.Oneistheneedtogainagreement—beforecreatingstrategy—ontheessentialdecisionsandthecriteriaformakingthem.Anotheristoensurethatthecompanyispreparedandwillingtoactonastrategyonceitisadopted.Toomuchofwhatpasses
5、forstrategydevelopment,wefind,consistsofhurriedefforts1A2011McKinseysurveyaskedexecutivestoevaluatetheirstrategiesagainsttenobjectivetestsofbusinessstrategy.Itfoundthat65percentofcompaniespassedjustthreeorfewertests.Formore,seeChrisBradley,MartinHirt,andSvenSmit,“Haveyoutestedyourstrate
6、gylately?,”McKinseyQuarterly,January2011,mckinsey.com.2What’sleftoveraftersubtractingthecostofcapitalfromnetoperatingprofit.2thatskiponeormoreoftheessentials.Theresultingstrategiesareoftenflawedfromthestart.It’salsoeasy,though,togotoofarintheotherdirectionandmakethecreationofstrategyari
7、gid,box-checkingexercise.Appealingasaformula-drivenapproachmightbe,itignoresthetruththatstrat-egycreationisajourney—andaninherentlymessyoneatthat.Proprietaryinsightsarehardtocomeby.Shapingkeeninsightsintogoodstrategiesrequiresdeepinterpersonalengagementanddebatefromseniorexecut
