In its survey involving over 2000 executives around the world, McKinsey asked series of questions to determine whether companies’ business unit strategies pass 10 tests that the consultancy believes – based on years of work with clients and academic research – make for good strategy. The first was whether the strategy will beat the market by creating competitive advantage. The remaining nine tests assess how the strategy positions the company in the market, what level of insight the strategy rests on, and what the implementation plan involves.
Nearly two-thirds of respondents indicated that their companies pass three or fewer of the 10 tests. And only two percent of respondents say their companies pass nine or all 10 tests. While McKinsey says it’s certainly possible for strategy to succeed at company that fails all or even most of the tests, the results underscore that companies can do much more to pressure-test their strategies.
• For more information visit: https://www.mckinseyquarterly.com/
Also:
• How they do it: Former Merck CEO Raymond Gilmartin and three other leaders share their approaches to testing strategy. https://www.mckinseyquarterly.com
• Have you tested your strategy lately? Ten timeless tests can kick up the level of strategic dialogue throughout your company.
