McKinsey: What’s a Business Model?

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You offer no definition, so when you tell us to “innovate”, what exactly is the thing we are to change? To be fair, no-one else provides a useful definition either – not even the most popular Business Model Canvas. All use abstract, inconsistent terminology, provide no causal explanation as to how a business model actually works and delivers performance, and with no quantification we have not the vaguest idea of the scale or growth of the enterprise the “business model” describes, or even if the model is viable ...

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Good Strategy: Bad Strategy. Rumelt

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I look forward to any new strategy book, so was thrilled to get “Good Strategy: Bad Strategy” by Prof Rumelt who McKinsey call ”strategy”s strategist”. Big disappointment!

“Bad strategy” apparently shows up as ”fluff”, failure to face challenges, mistaking goals for strategy, or choosing bad objectives – all common enough, maybe, but these are not any kind of strategy. There are plenty of actual strategy mistakes that repeat endlessly across industries and throughout time, but do not get a mention.

The “good ...

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Cost reduction and strategy

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No surprise I suppose that many companies took the shock of the down-turn to focus on cost-cutting. In What worked in cost cutting—and what’s next? McKinsey’s report of a global survey offers mixed news – yes, plenty of costs were cut, but executives worry about sustaining those cuts and about continuing risks from the sluggish economy. What we don’t know – and probably never will – is the consequences. How many, for example, cut too much, in the wrong ...

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Behavioral strategy

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Good advice from McKinsey on handling the behavioral issues of strategic decision-making. Important though this is, McK themselves have shown the strategy field offers little rigorous method for working out what to do – an issue that the field in general also worries about constantly. Hardly surprising, then, that in the absence of useful analysis, process is seen as critical. The flip-side is that if good method were available – which it is, of course – biases, power-relations and ...

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Knowledge brokering in open innovation

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I strongly recommend a McKinsey article on using knowledge brokering to improve business processes, with some simple but powerful points. E.g. effective business processes are key to performance throughout a firm, and do not result from a random process of making-it-up-as-we-go-along-and-see-what-works, but a deliberate process of search and design. The article focuses on product-related and other simple innovations (not the over-hyped ‘strategic’ type), and includes some nice simple examples.

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