Process quality drives strategic success 6x more than analysis
Think about the last major strategic decision your organization made. Maybe it was a significant capital investment, an acquisition, or launching a new product line. How did you approach it? Did you assemble a small team of experts to dive deep into market data and financial models? Or did you bring together diverse stakeholders to work through the decision collaboratively?
Here's what most leaders miss: how you make decisions matters far more than how much analysis you do. McKinsey research on 1,048 major decisions – investments in new products, M&A decisions, and large capital expenditures – found that strategic process quality outweighs analytical depth by a 6-to-1 ratio in predicting successful execution.
Sources: What drives strategic success: Dan Lovallo and Olivier Sibony, "The case for behavioral strategy," McKinsey Quarterly, March 2010. Based on analysis of 1,048 major strategic decisions over five years, including new product investments, M&A decisions, and large capital expenditures. Market leaders vs. laggards: BTS Research Report, "Mindsets: Gaining Buy-in to Strategy," 2015. Based on survey of 228 business leaders across North America, Asia-Pacific, and Europe, with respondents grouped by relative profitability performance versus industry peers.
The keys to superior process: inclusive participation, structured approaches, and psychological safety. This collaborative approach drives employee commitment, which strongly correlates with profitability. Market-leading companies achieve 4.3 times higher employee commitment to strategy than laggards.
The lesson: focus on collaborative processes that build genuine organizational buy-in rather than top-down, data-heavy approaches that fail to engage employees who ultimately execute the strategy.