Issue Peanut buttering: spreading capital and talent evenly dilutes impact

Summary

McKinsey uses the term peanut buttering for spreading resources thinly across an organization in an attempt to treat every unit equally. It lists this as the second main challenge for companies trying to reallocate and focus on their core. Distributing capital, operating budgets, and talent evenly across business units, the report argues, waters down their impact. Real breakthroughs come when resources are concentrated on the opportunities with the highest potential. McKinsey research cited in the report finds that companies reallocating more than half of their capital spending over a decade create about 50 percent more value than peers. The semiconductor industry, which recovered by 2024 through dynamic capital allocation and heavy investment, is offered as an illustration.