Chris Bradley: The Power Curve explained

In this blackboard session Chris Bradley, co-author of Strategy Beyond the Hockey Stick, describes the distribution of companies along the Power Curve of economic profit.

Discover the factors that determine a company's odds of mobility along the Power Curve.

And learn how you can greatly improve the odds of your company moving up the Power Curve and into the top quintile of global economic profit.

[meghkalyanasundaram]

Takeaways:

3 Big Buckets: Endowment, Trends, Moves

Endowment: Cant really do much about it.

Trends: Getting tailwinds instead of headwinds. Those tailwinds can come from the industry you compete in or the geography you locate yourself in.

Five really big moves that determine the odds your strategy:
1. Can you do a programmatic M&A Strategy?
2. Can you have really active resource reallocation?
3. Can you have a capital program that is ahead of your industry?
4. Can you have industry beating productivity?
5. Can you fundamentally differentiate your proposition?

[marc]

Rather than discussing Economic Profit on an absolute basis, would it not be more informative to discuss ROIC. 47 million average economic profit on a capital base of 47 million is a good return, but 47 million on a 4.7 billion capital base not a great return.