麥肯錫將短期決策與長期戰(zhàn)略聯(lián)系起來

May2024

Mcsey

company

Strategy&CorporateFinancePractice

Tyingshort-term

decisionstolong-termstrategy

Anewsurveyconfirmsthewell-foundedprinciplesbehindtheallocationofresourcesforlong-termvaluecreation.

Foryears,we’vepointedtobest—andworst—practicesinresourceallocation.1Tomaximize

cashflowoverthelongterm,organizationsneed

toshakefreefromanincrementalapproachand

shiftresourcesnowtoinvestwherethegrowth

willbe.Studiesshowthatcompaniesthatactively

reallocateresourcesoutperformthosethatdon’t.2Yetmakingboldmovesisalotharderthanitsounds.Inertiainevitablytakesholdinmostorganizations.

Leadersdefaulttoallocatingresourcesinthesameoldways,failingtochampiongrowth;teamsget

lostinthedetailsratherthanhighlightingthefew

mostimportantsourcesofvaluecreation;andeventhemostbrilliantexecutivesfallpreytocommon

decisionbiases—whichbecomemagnifiedinanorganizationalsetting.

Ourlatestsurveystronglyconfirmstheselong-heldobservationsaboutresourceallocation

andidentifiessomepracticesthatcanhelp

leadersaddressthem:toomanycompaniesdo

noteffectivelyfollowthroughontheirstrategies,therebyhinderingtheirchancesofoutperformingcompetitorsinthelongrun.

InournewMcKinseyGlobalSurveyonresourceallocation,wefindthatonlyabouthalfofthe

617executivesandmanagerssurveyedsaytheircompanieseffectivelyaligntheirbudgetswith

theircorporatestrategies.3What’smore,just

53percentsaytheirorganizationsareinthehabitoffullyfundingtheprioritiesthey’veidentified.

Respondentsreportthattheirorganizationsarenottakingenoughriskwiththeirinvestments,

suggestingthatleadersmaynotbesufficiently

planningforthelongterm.Yetthosewhoindicatethattheirorganizationssucceedatlinkingtheir

budgetstotheircorporatestrategies—andattakingappropriatelevelsofrisk—aremuchmorelikelythan

otherstoreportthattheirorganizationsoutperformonbothrevenuegrowthandreturnoncapital.

Inparticular,thesurveyresultssuggestthatbetterapproachesinfourareas—governance,processes,analytics,anddecisionmaking—canposition

companiesforbetterlong-termperformance.

Governance:Theimportanceof

influentialandinvolvedleadership

Inourexperience,effectivegovernancecanmakeorbreakacompany’sabilitytoachieveitsstrategicgoals.TheimpactismostsignificantwhentheCEOissupportedbyastrongfinancial-planningand

-analysis(FP&A)orcorporatestrategyteam.4

However,aprevioussurveyofstrategyleadersfoundthatonlyaboutone-quarterreported

havingaclearmandatealignedwiththerestofthecompany,andmanystruggledtoenhancetheir

companies’performance.5Ourlatestresearch

reinforcesthesignificanceofhavinganinfluential

FP&Aorcorporatestrategyleader,aswellasseniormanagerswhoactivelyparticipateincarryingout

corporatestrategies.

Respondentswhosaythattheleaderoftheteamresponsiblefordevelopingtheorganization’s

three-toseven-yearfinancialplanholdsinfluence—

meaningtheyhavesignificantinfluenceonC-suiteleadersandthroughouttheorganization—are

muchmorelikelythantheirpeerstosaytheir

organizationsoutperformtheircompetitors.Thosewhosaythatthisleader,whoistypicallyfromthe

FP&Aorcorporatestrategyteam,hassignificant

influenceontheCEO’sandCFO’sthinkingon

strategyandresourceallocationare1.8timesmorelikelythanthosewhodenysuchinfluencetoreport

1

2

3

AaronDeSmetandTimKoller,“Capitalallocationstartswithgovernance—andshouldbeledbytheCEO,”McKinsey,June22,2023.

MarcdeJong,NathanMarston,andErikRoth,“Theeightessentialsofinnovation,”McKinseyQuarterly,April1,2015;seealsoStephenHall,DanLovallo,andReinierMusters,“Howtoputyourmoneywhereyourstrategyis,”McKinseyQuarterly,March1,2012.

TheonlinesurveywasinthefieldfromOctober3toOctober13,2023,andgarneredresponsesfrom617participantsrepresentingthefull

rangeofregions,industries,andfunctionalspecialties.Thesurveyincludedonlyrespondentsworkinginmidlevel-manager,senior-manager,andC-levelpositionsatcompanieswithreportedrevenuesof$500millionormore.Toadjustfordifferencesinresponserates,thedataare

weightedbasedoneachrespondent’snation,takingintoconsiderationitscontributiontotheregion’sshareoftheglobalGDP.Justoverhalfoftherespondentssaythattheircompaniesoftenorconsistentlytransformstrategicgoalsintothree-toseven-yearstrategicfinancialplans.Asimilarsharesaytheirorganizations’annualbudgetsarealignedwiththeirstrategicfinancialplans,andweknowfromexperiencethat,at

manycompanies,thepreviousyear’sbudgetdrivesdecisionsforthefollowingyear.

4“Capitalallocationstartswithgovernance,”June22,2023.

5The2022McKinseysurveyontheroleofthestrategyleadersurveyedmorethan300strategyleaders.Forty-twopercentofrespondentssaidtheywerenotfullysuccessfulatimprovingcompanyperformance.

Tyingshort-termdecisionstolong-termstrategy2

thattheirorganizationsoutperformonrevenue

growth,andtheyare1.9timesmorelikelytoreportthattheirorganizationsoutperformonreturnon

capital(Exhibit1).Similarly,respondentswhoagreethattheleaderishighlyinfluentialthroughoutthe

organizationare1.4timesmorelikelythanthose

whodisagreetosaytheirorganizationsoutperformonrevenuegrowthand1.7timesmorelikelytosaytheirorganizationsoutperformonreturnoncapital.Overall,51percentofrespondentsreportthatthisleaderishighlyinfluentialacrosstheirorganization.

Theleadership’slevelofinvolvementwithinan

organizationalsomatters.Respondentswhosay

thattheircorporateseniormanagementoftenor

almostalwaysgivesclearstrategicdirectionto

businessunitsandproductlinesaremorelikelythanotherstoreportfinancialoutperformance.

Processes:Thenimbler,thebetter

Companiesoftenmoveslowlytocreateplansand

reallocateresources,withprolongedtimelinesfor

financialplanningthatcandiminishtheprocess’s

value.Nearlyhalfofrespondentssayitusuallytakestheirorganizationsatleastfourmonthstodevelopandapprovetheirthree-toseven-yearstrategic

financialplans,andone-thirdsayittakesatleast

fourmonthstofinalizetheirorganizations’annual

budgets.Thesurveyresultssuggestthattheshortertheprocess,thebetter.Respondentswhosaytheirorganizationsdevelopandapprovetheirthree-to

seven-yearstrategicfinancialplansinthreemonthsorlessaremorelikelythanotherstosaytheir

organizationsoutperformonrevenuegrowthand

returnoncapital,andthesameistrueofrespondentswhosaytheirorganizationscreateandapprovetheirannualbudgetsintwomonthsorless(Exhibit2).

Exhibit1

Respondentsreportinginluential,involvedFP&Aorstrategyleadersaremuchmorelikelythanotherstosaytheirorganizationsoutperform.

Respondentswhoagreethattheirorganizationsoutperformcompetitors,byeachofthefollowingstatements,1%

OutperformonrevenuegrowthOutperformonreturnoncapital

FP&A2orcorporatestrategyleaderhas

signiicantinluenceonCEO’sandCFO’sthinkingonstrategyandresourceallocation

FP&Aorcorporatestrategyleaderdoesnot

havesigniicantinluenceonCEO’sandCFO’sthinkingonstrategyandresourceallocation

28

51

24

45

FP&Aorcorporatestrategyleaderishighlyinluentialthroughoutorganization

FP&Aorcorporatestrategyleaderisnothighlyinluentialthroughoutorganization

36

51

26

44

Corporateseniormanagementgivesclear

directiontobusinessunitsand/orproductlinesondetailedstrategytofollow

Corporateseniormanagementdoesnotgive

cleardirectiontobusinessunitsand/orproductlinesondetailedstrategytofollow

34

52

26

46

1Respondentswhoanswered“disagree,”“neutral,”or“don’tknow/notapplicable”arenotshown.

2Financialplanningandanalysis.

Source:McKinseyGlobalSurveyonresourceallocation;617midlevelmanagersthroughC-levelexecutivesatorganizationswith$500millionormoreinreportedannualrevenues;Oct3–13,2023

McKinsey&Company

Tyingshort-termdecisionstolong-termstrategy3

Exhibit2

Respondentsreportingfasterdevelopmentofstrategicinancialplansand

annualbudgetsarelikelierthanotherstosaytheirorganizationsoutperform.

Respondentswhoagreethattheirorganizationsoutperformcompetitorsonreturnoncapital,1%

Reportedtime

spentdeveloping

organization’s3-to7-yearstrategic

inancialplan

≤3months

51

4months

43

≥5months

31

Reportedtime

spentdeveloping

organization’s

annualbudget

≤2months

50

3months

39

4months

33

≥5months

26

1Respondentswhoanswered“disagree,”“neutral,”or“don’tknow/notapplicable”abouttheirorganizations’return-on-capitalperformancearenotshown.Source:McKinseyGlobalSurveyonresourceallocation;617midlevelmanagersthroughC-levelexecutivesatorganizationswith$500millionormoreinreportedannualrevenues;Oct3–13,2023

McKinsey&Company

What’smore,surveyresponseslinknimble

reallocationofresourceswithself-reportedfinancial

outperformance.6Respondentswhoreportthattheirorganizationsreallocateresourcesacrossbusinessunitswithintheyeararemuchmorelikelythan

respondentswhoreportnoin-yearreallocationto

saytheirorganizationsoutperformonbothrevenuegrowthandreturnoncapital.Additionally,when

respondentssaythattheirorganizationsincentivizeexecutivestofreeupresourcesforhigher-value-

creatingopportunitieselsewhereintheenterprise,theyare1.8timesmorelikelythanotherstoreport

outperformanceonrevenuegrowthand1.7timesmorelikelytoreportoutperformanceonreturnoncapital.

Analytics:Rigorousfinancial

analysisofprojectsismandatory

Organizationsthatuserigorous,standardizedanalyticstoassessinitiatives’performanceand

theirpotentialtocreatevaluecanensureconsistentevaluationacrossdifferentpartsofthebusiness,

whichcanhelpthemeffectivelyprioritizestrategic

initiatives.Respondentswhosaymostoralloftheirorganizations’projectsareevaluatedusingfinancialmetrics(suchasnetpresentvalueorinternalrateofreturn)aremuchmorelikelythanthosewhosayhalforfewerprojectsusethosemetricstoreportthat

theirorganizationsoutperformonrevenuegrowth

andreturnoncapital.Thesurveyresultsalsosuggestthattheacknowledgmentofuncertaintyinforecastsmatters.Respondentswhosaytheirorganizations’financialforecastsforallprojectsincludearangeofoutcomesare1.7timesmorelikelythanthosewho

don’ttosaytheirorganizationsoutperformonbothrevenuegrowthandreturnoncapital.

Thefindingsalsosuggestthatrankingstrategicprogramsbasedonfinancialoutcomescan

helpguideeffectiveresourcingdecisions—but

6Formoreaboutin-yearflexibilitywithallocationandotherprocessesforeffectivelyallocatingcapital,see“Keepcalmandallocatecapital:Sixprocessimprovements,”forthcomingonMcK.

Tyingshort-termdecisionstolong-termstrategy4

41

45

55

35

37

50

onlyifcompaniesdosoconsistently(Exhibit3).

Just28percentofallrespondentssaythattheir

organizationsalmostalwaysranktheirtopten

to30mostimportantstrategicprogramsbased

onfinancialmetrics,butthosewhoreportthat

frequencyaremuchmorelikelythanthosewho

saytheydoso“sometimes”orevenlessfrequentlytoreportthattheirorganizationsoutperformon

revenuegrowthandreturnoncapital.

Decisionmaking:Debiasto

pursueboldinvestments

Humannatureisremarkable.Itmakesinnovation

possible—alongwithamultitudeofinvaluable

advancements(notleastinhealthcare,agriculture,

andstandardofliving)thatbenefitbillionsofpeople.Buthumannatureispronetobiases,whichcan

impedeinnovationitself,particularlyinacorporate,organizationalsetting.Onesuchbiasisstriving

toachieveconsensusacrossalargenumberofexecutives,whichcanstifledebateandhinder

strategic-planningdecisions.Ifnotaddressed,groupthinkandlossaversion—thetendencytoexperiencelossesmoreacutelythangains—caneasilypreventcompaniesfrommakingbold

investmentsininitiativesthathavethepotential

tocreatemorevaluethanlower-riskinvestments.

Breakingoutofthisgroupthinkstartsatthetop,andseveralmanagementpracticesthathelpcompaniesdosoareonesthatsurveyresponsescommonlylinkwithoutperformance.

Oursurveyresultssupportpreviousresearch

thatsuggeststheimportanceofrigorous

debate,particularlyasapredictorofsuccessinmaking“bigbet”decisions.7Inthelatestsurvey,respondentswhosaytheirorganizations’criticalresourceallocationdecisionsareoftenoralmost

alwaysprecededbythemanagementteam

engaginginactivedebateare1.3timesmorelikelythanotherstosaytheirorganizationsoutperform

onrevenuegrowthand1.4timesmorelikely

toreportoutperformanceonreturnoncapital

(Exhibit4).Furthermore,whenrespondentssay

C-suiteanddivisionleadersattheirorganizationsoftenoralmostalwaysdiscussmultipleoutcomes,includingunfavorableones,theyare1.7times

morelikelythanotherstosaytheirorganizationsoutperformonrevenuegrowthand1.8times

morelikelytoreportoutperformanceonreturnoncapital.

Exhibit3

Rankingstrategicprogramsbasedoninancialoutcomescanhelpguideefectiveresourcingdecisions—ifcompaniesdoitconsistently.

Respondentswhoagreethattheirorganizationsoutperformcompetitors,1byextenttowhichorganizationranksstrategicprograms,%

OutperformonrevenuegrowthOutperformonreturnoncapital

Frequencyatwhichorganizationranks 10–30mostimportantstrategicprogramsbasedoninancialmetrics

Almostnever,

seldom,orsometimes

Often

Almostalways

1Respondentswhoanswered“disagree,”“neutral,”or“don’tknow/notapplicable”arenotshown.

Source:McKinseyGlobalSurveyonresourceallocation;617midlevelmanagersthroughC-levelexecutivesatorganizationswith$500millionormoreinreportedannualrevenues;Oct3–13,2023

McKinsey&Company

7“Decisionmakingintheageofurgency,”McKinsey,April30,2019.

Tyingshort-termdecisionstolong-termstrategy5

Exhibit4

Respondentsreportingrigorousdebateandconsiderationofmultiple

outcomesasnormsaremorelikelytosaytheirorganizationsoutperform.

Respondentswhoagreethattheirorganizationsoutperformcompetitors,1byeachofthefollowingstatements,%

OutperformonrevenuegrowthOutperformonreturnoncapital

Criticalresourceallocationdecisionsareoftenoralmostalwaysprecededbyactivedebatebymanagementteam

Criticalresourceallocationdecisionsarerarelyorsometimesprecededbyactivedebateby

managementteam

52

46

40

32

C-suiteanddivisionleadersoftenoralmostalwaysdiscussmultipleoutcomes,includingunfavorableones

C-suiteanddivisionleadersrarelyor

sometimesdiscussmultipleoutcomes,

includingunfavorableones

35

58

52

29

1Respondentswhoanswered“disagree,”“neutral,”or“don’tknow/notapplicable”arenotshown.

Source:McKinseyGlobalSurveyonresourceallocation;617midlevelmanagersthroughC-levelexecutivesatorganizationswith$500millionormoreinreportedannualrevenues;Oct3–13,2023

McKinsey&Company

Employeesatanylevelofanorganization

sometimeshesitatetospeakupinmeetings,

particularlyiftheydisagreewithaseniorleader.

Butthereisabodyofresearchthatsuggeststhat

decisionmakingismoreeffectivewhenmorevoices

areincluded.Respondentswhosayexecutivesatalllevelsareoftenoralmostalwayscomfortabledisagreeingwiththeirleadersare1.8timesmorelikelythanotherstoreportoutperformance

onrevenuegrowthand1.6timesmorelikelyto

reportoutperformanceonreturnoncapital.

Theimportanceofthiscomfortseemstoextendbeyondjustexecutives:respondentswhosay

theirorganizations’employeesarecomfortableexpressingcontrarianpointsofviewtosenior

colleaguesarenearlytwiceaslikelyasotherstoreportoutperformanceonrevenuegrowthandreturnoncapital.

Theresultsalsosuggestthatovercomingloss

aversion,acommondecision-makingbias,servescompanieswell.Toovercomelossaversion,

somecompaniesrewardnoblefailures—that

is,courageous,responsible,andwell-executed

initiativesthatdon’tultimatelyachievetheir

goalsbutcanprovidevaluablelessons.Taking

onwhatrespondentsdeem“therightlevelof

risk”withacompany’sportfolioandinvestingfor

thelongtermarecorrelatedwithself-reported

outperformance.Strikingly,though,theshareof

respondentswhosaytheirorganizationstaketoolittleriskincertainareasisnearlyaslargeorlargerthanthesharesayingtheirorganizationspursue

therightlevelofrisk(Exhibit5).

Respondentswhoindicatethattheirorganizationstakeonappropriateriskwithcapitalexpendituresare1.6timesmorelikelythanthosereportingtoo

littlerisktosaytheirorganizationsoutperform

onrevenuegrowthand1.6timesmorelikelythan

otherstosaytheirorganizationsoutperformon

returnoncapital.What’smore,themoreoften

respondentssaytheirorganizationsinvestinlow-probability,high-payoffprojectswithinR&Dand

marketingandsales,themorelikelytheyaretosaytheirorganizationsoutperformonrevenuegrowthandreturnoncapital.

Tyingshort-termdecisionstolong-termstrategy6

Exhibit5

Respondentsoftensaythattheirorganizationsaretakingtoolittleriskwiththeirinvestments.

Levelofreportedriskthatrespondents’organizationstakeingivencategory,1%ofrespondents

Findmorecontentlikethisonthe

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Capital

expenditures

R&D/new-productintroductions

Marketingandsales

Don’tknow

Toolittlerisk

Therightlevelofrisk

Toomuchrisk

39

52

7

3

46

44

82

42

43

10

5

1Figuresmaynotsumto100%,becauseofrounding.

Source:McKinseyGlobalSurveyonresourceallocation;617midlevelmanagersthroughC-levelexecutivesatorganizationswith$500millionormoreinreportedannualrevenues;Oct3–13,2023

McKinsey&Company

Whiletherearealsowell-establishedbenefitstoencouragingindivi