McKinsey Global Institute identifies five strategies that standout firms use to step up productivity, and the common thread is boldness over incrementalism. The framework spans scaling new business models, shifting portfolios, reshaping value propositions, building scale effects, and raising efficiency. Each strategy has distinct mechanics but shares a logic: productivity leaders make decisive bets rather than optimizing at the margins.
1. Scale More Productive Business Models or Technologies
Implement technologies that offer customers higher value than predecessors. Apple shaped the mobile internet wave. REWE quadrupled German e-commerce grocery market share. The key: identifying and scaling genuinely superior models before competitors.
2. Shift Regional and Product Portfolios Toward Highest Productivity
Double down on product lines with higher customer value relative to hours needed. Refocus geographically on most promising markets. Nissan pioneered mass-market EVs. Broadcom shifted from semiconductors to infrastructure software for higher margins. Amazon developed AWS as a productive adjacency.
3. Reshape Customer Value Propositions to Grow Revenue
Develop unique selling propositions aligned with strong customer needs. NVIDIA won on GPU value proposition. Home Depot improved customer experience in-store and online. EasyJet succeeded in low-cost carrier positioning.
4. Build Scale and Network Effects
Secure economies of scale and scope, adding value faster than workforce expands. Create network effects where customer value rises with more users. Amazon and Zalando scaled digital fulfillment platforms. Hapag-Lloyd expanded via acquisitions.
5. Raise Operational Efficiency and Reduce Procurement Cost
Enhance performance through lean operating principles and supply chain transformation. Tesco reduced costs while competing on quality. EasyJet modernized fleet to reduce operational costs. Danaher outsourced and optimized workforce structure.
The Strategic Insight
Productivity gains do not come from doing the same things slightly better. They come from bold portfolio shifts, decisive technology bets, and structural changes to value propositions and operations.
The companies McKinsey highlights—Apple, NVIDIA, Amazon, Broadcom—made discontinuous moves rather than incremental improvements. This aligns with economies of scale and network effects frameworks. Boldness is the common denominator.
Gennaro is the creator of FourWeekMBA, which reached about four million business people, comprising C-level executives, investors, analysts, product managers, and aspiring digital entrepreneurs in 2022 alone | He is also Director of Sales for a high-tech scaleup in the AI Industry | In 2012, Gennaro earned an International MBA with emphasis on Corporate Finance and Business Strategy.
