The Case for A Behaviorial Strategy - McKinseys

Once heretical, behavioral economics is now mainstream. Money managers employ its insights about the limits of rationality in understanding investor behavior and exploiting stock-pricing anomalies. Policy makers use behavioral principles to boost participation in retirement-savings plans. Marketers now understand why some promotions entice consumers and others don’t. Yet very few corporate strategists making important decisions consciously take into account the cognitive biases—systematic tendencies to deviate from rational calculations—revealed by behavioral economics. It’s easy to see why: unlike in fields such as finance and marketing, where executives can use psychology to make the most of the biases residing in others, in strategic decision making leaders need to recognize their own biases. So despite growing awareness of behavioral economics and numerous efforts by management writers, including ourselves, to make the case for its application, most executives have a justifiably difficult time knowing how to harness its power.

Click to read more ...

Building Organisational Capabilities - McKinsey Global Survey 2010

Nearly 60 percent of respondents to a recent McKinsey survey say that building organizational capabilities such as lean operations or project or talent management is a top-three priority for their companies. Yet only a third of companies actually focus their training programs on building the capability that adds the most value to their companies’ business performance.

McKinsey's defined a capability as anything an organization does well that drives meaningful business
results. The survey explored which capabilities are most critical to a company’s business
performance and why they focus on the capabilities they do. It also asked executives how their
companies create and manage training and skill-development programs and how effective
those programs are in maintaining or improving on their priority capabilities.

Click here to read the full report from the survey.