In this volume, we have brought together some of the best writings on strategy produced over the past two decades by McKinsey consultants. Inevitably, in making our selections, we have omitted many fine articles. But the 24 contained here provide a good representation of the breadth and depth of McKinsey’s strategic thinking.
The anthology is organized into three parts, corresponding to the main phases in the development of our work on strategy. The first set of articles in the anthology contains articles from the period 1978-89, the early years of the strategy practice. These articles include:
These were years of remarkable creativity, when some of the best minds at McKinsey worked together to refresh and extend the Firm’s approach to the development of strategy and to reaffirm McKinsey’s role as a leader in the field. Many of these articles first appeared as internal staff papers and are being published here, in abridged form, for the first time.
During the period covered in this section the explosion of new research on strategy gave rise to many key conceptual breakthroughs, including the development of frameworks and tools that remain a part of McKinsey’s core approach to such problems: the business system, economic value to the customer, the industry cost curve, the notion of the attacker’s advantage, and the structure-conduct-performance model. Although some of the examples in these articles may be dated, the insights are as sharp as ever and the overarching approach is still powerful. Later work by the strategy practice extended the Firm’s thinking but was built on the "classical" model of strategy described in this section.
The second set of articles in the anthology contains articles from the mid-1990s, when McKinsey was adapting the classical approach to cope with increased levels of uncertainty in the economy and emerging business models such as the economic web. These articles include:
In this period, a major McKinsey research project known as the Strategy Theory Initiative brought together consultants to develop new tools and frameworks aimed at bridging the gap between the classical models of the 1980s and the realities of the changing economy. The initiative created a much richer set of analytical approaches, better tailored to highly uncertain business environments. Several articles that describe the new thinking are reprinted in this section. The original versions were all published in The McKinsey Quarterly or in independent publications such as Harvard Business Review.
Finally, the third set represents work in progress. These articles include:
Some observers argue that strategy is irrelevant in the new economy, since there is supposedly no time for strategic thinking. All that matters, they argue, is having a good idea and concentrating relentlessly on its execution. Not surprisingly, we take a different view. In the new economy, the core truths of strategy still apply. Businesses must create value for customers and capture some of that value for shareholders. They still need to identify and build on some form of competitive advantage. They must understand their own inherent economics and why those economics are superior or inferior to those of the competition.
But something has clearly changed, and traditional strategy models are not as powerful as they were in an economy built along more classical lines. The articles in Part III provide rich insights into some of the exciting frontiers of strategic thinking—frontiers that we are now exploring. Like the articles in Part II, "The changing landscape," those in Part III first appeared in the Quarterly or in important independent publications. Readers interested in other McKinsey writings on the new economy may enjoy another recent Quarterly anthology, The Global Game, which was published in 1999.
Individually, each article in this anthology presents an important perspective on a single aspect of strategy. Taken together, they represent a formidable body of knowledge, distilled from the experience of thousands of McKinsey consultants, about the art and science of business strategy. We hope this anthology will serve as both an archival document and a useful guidebook for those interested in problems of business strategy.
Bill Huyett
Charles Roxburgh
Co-leaders, Strategy Practice
