Summary: This is another in our series of podcasts on Enduring Ideas—classic business-strategy frameworks. For each framework, we talk to a McKinsey expert who can speak to its origins, utility, and continued relevance. In this podcast, we address the strategic control map. This graph measures book equity on the x axis and market-to-book ratio on the y axis. A series of curving isoquant lines plot selected companies’ market capitalization as a component of the metrics on the axes. For many companies, plotting their positions on the map over time is a revelation: executives can see at a glance where they stand relative to industry leaders, which companies are likely to be acquirers and which are likely to be acquired. Mapping performance trajectories for themselves or their competitors, they can also get a sense of the combination of size and performance that will enable them to remain competitive and independent. Even winning companies are often startled to find out how fast the race is being run, and that instead of leading the field, they are merely keeping pace. McKinsey director, Lowell Bryan, will take us through the art of using this framework.
