The Hockey Stick and the Hairy Back

Definition

A "hockey stick" is a plan showing a near-term dip followed by a sharp, sustained rise in revenue or profit — the shape managers present to justify an investment ask. Because the promised rise routinely fails to arrive on time, the same unit re-presents a fresh hockey stick the next year, and the next: stitched together, the repeated near-flat-then-cut-off curves look like a "hairy back." The book is explicit that real hockey sticks do exist — they are, in fact, how companies actually jump up the Power Curve — the hard problem is telling a genuine one from the ritual kind.

In the Book

Chapter 3 explains why hockey sticks are almost unavoidable: presenting one wins the argument today, failure to have the projection pan out carries less penalty than not presenting one at all ("maybe the executive presenting it will have moved on"), and not presenting one signals a lack of confidence in your own business. Executives know a plan will get "negotiated down to half," so they inflate it going in — one CEO calls the whole ritual "a haircut from finance." The chapter also documents the opposite failure — "corporate peanut butter," where resources get spread thin across everyone rather than concentrated where a real breakout is possible — and shows, via the mid-2000s hockey-stick example of a business unit leader who genuinely engineered a multi-year growth inflection, that the diagnostic test for a real one is a documented, big enough move (see Big Moves) that clears an external, outside-view threshold rather than an internal target.

Why It Matters

The pattern gives leaders language to distinguish a genuinely engineered inflection point from a negotiating tactic dressed up as a forecast — the test isn't whether the shape looks convincing, it's whether the plan contains a specific, externally-benchmarked big move big enough to explain the bend in the curve. The same diagnostic — "is there a real mechanism behind this inflection, or just optimism plus budget pressure" — applies to any forecast where the preparer's incentives reward a rosy story more than an accurate one.