Source page: McKinsey & Company

Commentary

Visual form

Horizontal dot-and-range chart.

Layout / body structure

The visual is a single horizontal comparison chart read from top to bottom by industry. Each row uses two dots joined by a range bar so the reader can compare a top-quartile performer with a bottom-quartile performer on the same line.

What is being compared

It compares general and administrative costs across eight industries, splitting each industry into top-quartile and bottom-quartile performance groups.

Measurement system

The measure is general and administrative cost as a percent of revenue, so the horizontal position of each dot shows how much of revenue is absorbed by overhead in each performance tier.

Visible structure inside the graphic

Each industry row contains a blue dot for the top quartile and a dark dot for the bottom quartile, connected by a pale horizontal span. The industries are stacked vertically, and the widest gaps appear at the top of the list, where financials and energy show the largest separations.

Main takeaway from the visual

Every industry row shows the top quartile to the left of the bottom quartile, meaning stronger performers run materially leaner administrative cost structures across the board rather than only in a few isolated sectors.

Key standout values or extremes

The financials row sits at roughly 3 percent of revenue for the top quartile versus a little above 10 percent for the bottom quartile. Energy shows a similarly wide spread from roughly 2.5 percent to almost 9 percent, while the narrower ranges lower in the chart still show several points of separation.

Controls / sequence, when applicable

This is a static chart image with no in-chart controls to operate.

Companion media, when applicable

There is no separate companion audio or video; the chart image is the full visual on this page.


Rethinking administrative costs

Talent

March 24, 2023 – Building and maintaining effective support functions requires significant investment, and can affect how two companies think about value creation when separating. Partner Anna Mattsson and coauthors find that across industries, general and administrative (G&A) costs are significantly lower—4 to 8 percent of revenue—for high performers than those in the bottom quartile.

General and administrative costs are significant across industries, and the gaps between industry high and low performers are notable—and expensive.

To read the article, see “The power of goodbye: How carve-outs can unleash value,” February 7, 2023.


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