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December 21, 2023
This week’s headline findings:
Amid one of the vital troublesome working environments in current reminiscence, organizations are setting agendas for the approaching yr. Drawing on conversations with enterprise leaders, senior companions Homayoun Hatami and Liz Hilton Segel provide eight CEO priorities for 2024. Geopolitics, the vitality transition, and generative AI (gen AI) all make the grade as important subjects. However as they contemplate these necessary points, CEOs mustn’t overlook to additionally value their middle managers.
Gen AI may widen the racial wealth hole in the USA by $43 billion per yr. However utilized strategically, the know-how additionally has the potential to strengthen pillars of Black financial mobility, resembling monetary inclusion, inexpensive housing, and the narrowing of the digital divide. Senior companion Mark McMillan and coauthors define strategies for ensuring gen AI is deployed equitably and in ways in which assist moderately than hinder Black Individuals’ progress.
Retail shrink, which encompasses not simply theft but additionally components resembling waste and spoilage, cost US retailers more than $110 billion in 2022. Companion Bill Mutell and coauthor recommend approaches for mitigating these losses, resembling taking a store-by-store strategy to safety, creating correct incentives for managers, and utilizing technological options to rein in dangers whereas liberating employees to deal with buyer expertise. One oft-overlooked difficulty: worker theft, which in 2022 accounted for 29 % of US retailers’ shrink.
Additional notable evaluation from McKinsey:
The case research assortment Rewired in Action illuminates firms which have launched digital transformations to construct worth. Supported by technical and trade experience from McKinsey, these organizations have modified their trajectories by way of the mixing of digital and AI.
This briefing be aware, based mostly on McKinsey’s newest revealed insights, was ready by Seth Stevenson, a senior editor in McKinsey’s New York workplace.
Do these insights resonate with you? What else ought to we be writing about now? Inform us by emailing [email protected].
December 14, 2023
High insights from 2023 are collected in McKinsey’s yr in assessment. Our weekly digest explores that matter and extra.
This week’s headline findings:
Discover our most compelling insights from the previous 12 months in McKinsey’s annual year in review. Distinguished subjects embody gen AI, the vitality transition, and the facility of digital transformation. For additional year-end edification, additionally see our year in charts and year in images.
Many organizations deal with near-term synergies within the wake of a deal. However senior companion Chris Hagedorn and coauthors recommend that transactions can present opportune moments to totally reimagine newly mixed companies. A transformational approach to M&A can flip offers into levers for executing new methods and delivering worth creation.
Gen AI may enhance client advertising and marketing capabilities by automating processes, enabling hyperpersonalization, and breaking by way of inventive constraints. Senior companion Kelsey Robinson and coauthors say entrepreneurs can use gen AI as a instrument to investigate competitor strikes, assess client sentiment, and check new product alternatives. Companies can begin their gen AI journeys by defining probably the most related use circumstances, figuring out the correct groups, and pinpointing potential dangers.
Additional notable evaluation from McKinsey:
The case research assortment Rewired in Action illuminates firms which have launched digital transformations to construct worth. Supported by technical and trade experience from McKinsey, these organizations have modified their trajectories by way of the mixing of digital and AI.
A current version of Author Talks options Dr. Fei-Fei Li, professor of laptop science at Stanford College and founding director of the Stanford College Institute for Human-Centered Synthetic Intelligence, talking about her new guide, The Worlds I See: Curiosity, Exploration, and Discovery on the Daybreak of AI (Macmillan, November 2023). Li highlights the significance of making AI governance models that prioritize human dignity.
This briefing be aware, based mostly on McKinsey’s newest revealed insights, was ready by Seth Stevenson, a senior editor in McKinsey’s New York workplace.
Do these insights resonate with you? What else ought to we be writing about now? Inform us by emailing [email protected].
December 7, 2023
Decarbonization would require fixing 4 interconnected issues. Our weekly digest of insights explores that matter and extra.
This week’s headline findings:
Though there was significant momentum, the world is just not on observe to achieve net-zero emissions by 2050. Getting there would require tackling 4 interconnected issues: emissions discount, affordability, reliability, and industrial competitiveness. Senior companions Tomas Nauclér, Daniel Pacthod, Sven Smit, Humayun Tai, and coauthors provide several principles that can guide decision makers alongside the way in which, resembling creating incentives, driving down prices, constructing efficient monetary mechanisms, and anticipating bottlenecks.
In keeping with McKinsey evaluation of trade forecasts, the style world can count on top-line progress of two to 4 % in 2024, with the luxurious section producing the biggest share of revenue. However uncertainty abounds as financial volatility and geopolitical tensions create potential headwinds. Senior companions Anita Balchandani, Achim Berg, Gemma D’Auria, and coauthors define ten emerging themes for the year ahead, together with a brand new technology of influencers, fierce competitors within the realm of quick vogue, and larger regulatory scrutiny of the trade. (Obtain the complete State of Fashion 2024 report.)
Household-owned companies account for greater than 70 % of worldwide GDP and about 60 % of worldwide employment. Some notable ones have been profitable for greater than a century. Evaluation from senior companion Acha Leke and coauthors suggests four mindsets that are critical for high-performing family-owned businesses. Adopting them may quadruple a enterprise’s worth over the subsequent decade.
Additional notable evaluation from McKinsey:
The case research assortment Rewired in Action illuminates firms which have launched digital transformations to construct worth. Supported by technical and trade experience from McKinsey, these organizations have modified their trajectories by way of the mixing of digital and AI.
This briefing be aware, based mostly on McKinsey’s newest revealed insights, was ready by Seth Stevenson, a senior editor in McKinsey’s New York workplace.
Do these insights resonate with you? What else ought to we be writing about now? Inform us by emailing [email protected].
November 30, 2023
Public–non-public–philanthropic partnerships may assist fight local weather change. Our weekly digest of insights explores that matter and extra.
This week’s headline findings:
Multistakeholder initiatives involving public–private–philanthropic partnerships (or 4P models) may play important roles in tackling local weather and nature challenges. These collaborations can embody, for instance, transactional financing or knowledge-sharing platforms. Senior companions Hamid Samandari, Daniel Pacthod, and coauthors provide a framework for assessing the materiality, suitability, and feasibility of 4P efforts.
The world has by no means been extra interconnected, however geopolitical tensions, provide chain breakdowns, and a backlash towards globalization are combining to fray the ties that bind the world collectively. Senior companions Michael Birshan, Joe Ngai, Olivia White, and coauthor define priorities for organizations confronting a new paradigm of global interconnectedness. Management groups ought to work to spice up their familiarity with geopolitical nuances, undertake state of affairs planning that accounts for dynamic world occasions, and take into consideration diversifying (versus decoupling) provide chains.
Journey manufacturers virtually invented modern-day loyalty applications. However it may be time for a reinvention. Rule adjustments and profit clawbacks have left many loyalty program members feeling dissatisfied and—more and more—disloyal. Companions Clay Cowan, Jillian Tellez Holub, and coauthors element a mindset shift, encouraging travel brands to think about loyalty as more than just points and miles. Elevated buyer experiences and data-driven personalization could be the cornerstones of latest loyalty initiatives.
Additional notable evaluation from McKinsey:
The case research assortment Rewired in Action illuminates firms which have launched digital transformations to construct worth. Supported by technical and trade experience from McKinsey, these organizations have modified their trajectories by way of the mixing of digital and AI.
A current version of Author Talks options Pulitzer Prize winner Walt Hickey talking about his new guide, You Are What You Watch: How Motion pictures and TV Have an effect on Every little thing (Hachette Guide Group, October 2023). Hickey highlights data demonstrating that pop culture has influenced things resembling office dynamics, the tourism economic system, and even safety procedures at banks.
This briefing be aware, based mostly on McKinsey’s newest revealed insights, was ready by Seth Stevenson, a senior editor in McKinsey’s New York workplace.
Do these insights resonate with you? What else ought to we be writing about now? Inform us by emailing [email protected].
November 16, 2023
How can organizations adapt to local weather change? Our weekly digest of insights explores that matter and extra.
This week’s headline findings:
At the same time as makes an attempt to mitigate local weather change proceed, private and public sector actors will need to consider strategies for adaptation to international warming. Some present adaptation plans exist, however most lack sufficient specifics. Senior companions Philipp Koch, Homayoun Hatami, Hamid Samandari, and coauthors define a framework for adaptive motion that’s divided into 4 classes: creating a climate-risk-management mindset, figuring out technological and behavioral adaptation levers, making financial and societal changes, and leveraging governance, institutional assist, and dedication.
Financial uncertainty hasn’t stopped enterprise leaders from prioritizing the building of new businesses, in keeping with a current McKinsey survey. Fifty-eight % of leaders reported that creating new income streams has change into extra necessary due to the present financial setting. Organizations with extra expertise in constructing new companies have a tendency to attain greater success charges. Senior companions Markus Berger-de León, Paul Jenkins, and Ari Libarikian recommend that taking a portfolio strategy to new-business creation will help diversify threat whereas cautioning leaders to not count on that each new enterprise enterprise will change into a giant winner.
As a result of the actual property trade is awash in knowledge—about properties, communities, tenants, and the market itself—it may be fertile floor for using gen AI. Industry use cases for gen AI may embody participating with prospects, sifting by way of leasing documentation, aiding funding selections, and drawing architectural plans. Senior companions Matt Fitzpatrick, Vaibhav Gujral, and coauthors element steps for actual property gamers to take now, together with making a library of helpful gen AI prompts, focusing extra sharply on proprietary knowledge, and assessing the dangers of utilizing gen AI in an actual property context.
Additional notable evaluation from McKinsey:
The case research assortment Rewired in Action illuminates firms which have launched digital transformations to construct worth. Supported by technical and trade experience from McKinsey, these organizations have modified their trajectories by way of the mixing of digital and AI.
This briefing be aware, based mostly on McKinsey’s newest revealed insights, was ready by Seth Stevenson, a senior editor in McKinsey’s New York workplace.
Do these insights resonate with you? What else ought to we be writing about now? Inform us by emailing [email protected].
November 9, 2023
Innovation and progress, performed proper, can work hand in hand. Our weekly digest of insights explores that matter and extra.
This week’s headline findings:
Evaluation of 53 giant public firms which have each outgrown and out-innovated peers finds a number of frequent traits which have led to success. These revolutionary growers have a tendency to take a position productively in R&D (usually by creating sturdy patents), look to increase into adjoining enterprise areas during which they will excel (utilizing AI to determine alternatives), and use programmatic M&A (in some circumstances to construct out product ecosystems). Companions Matt Banholzer, Rebecca Doherty, Alex Morris, and coauthor recommend that devoted administration consideration, paired with persistence, will help firms steadiness the dual targets of progress and innovation.
New client analysis from McKinsey examines US shoppers’ moods as the holiday season approaches. Seventy-nine % of customers say they plan to commerce down, and most customers are much less inclined to splurge. Youthful customers are extra doubtless to make use of “purchase now, pay later” plans and likewise are extra prepared to pay for same-day supply. Senior companion Kelsey Robinson and coauthors say retailers ought to search for methods to personalize promotions, encourage customers by way of storytelling, and use omnichannel methods to satisfy customers the place they’re.
With tasks that may vary from administrative to strategic, a modern-day chief of employees can play an outsize position within the success of a CEO—or a corporation. Senior companion Andrew Goodman and coauthors draw on conversations and analysis to compile eight recommendations that might help a chief of staff excel. Amongst them: watch out to outline the position’s scope, get issues proper on day one, and exert affect with out taking part in politics.
Additional notable evaluation from McKinsey:
- On an episode of McKinsey’s Forward Thinking podcast, Stephen King, a senior financial adviser to HSBC Financial institution, speaks about the resurgence of inflation—and affords historic perspective relationship again to the Roman Empire.
- Companion Tim Koller and coauthors analyze the data on dividends and discover that enormous, secure companies virtually by no means minimize dividends as a strategic option to spend money on progress.
- Companion Kersten Heineke and coauthors define finest practices for firms seeking to provide their staff mobility budgets—allowances that subsidize (and encourage) using sustainable transport.
The case research assortment Rewired in Action illuminates firms which have launched digital transformations to construct worth. Supported by technical and trade experience from McKinsey, these organizations have modified their trajectories by way of the mixing of digital and AI.
A current version of Author Talks options Columbia Legislation College professor Anu Bradford talking about her new guide, Digital Empires: The International Battle to Regulate Expertise (Oxford College Press, September 2023). Bradford foresees a regulatory scuffle between the world’s three leading digital powers—China (with its state-driven mannequin), the European Union (with its rights-driven mannequin), and the USA (with its market-driven mannequin).
This briefing be aware, based mostly on McKinsey’s newest revealed insights, was ready by Seth Stevenson, a senior editor in McKinsey’s New York workplace.
Do these insights resonate with you? What else ought to we be writing about now? Inform us by emailing [email protected].
November 2, 2023
Advertising and marketing generally is a important part of progress. Our weekly digest of insights explores that matter and extra.
This week’s headline findings:
CEOs who embrace advertising and marketing as a core part of progress are twice as doubtless as their friends to high 5 % annual progress charges. However greater than 40 % of Fortune 500 firms don’t have a growth- or customer-related position established on their CEOs’ government committees. Firms usually saddle their CMOs with poorly outlined purviews, underestimate advertising and marketing’s means to propel progress, and use the improper metrics to evaluate advertising and marketing’s efficacy. Drawing on survey analysis and conversations with CMOs and different C-level progress executives, senior companion Marc Brodherson and coauthors provide tips for correctly measuring the consequences of selling, clarifying CMOs’ remits, and strengthening the relationships between CEOs and CMOs.
Monetary establishments have well-established approaches for managing monetary dangers associated to steadiness sheets and money flows. However they might lack outlined methods for managing nonfinancial dangers—these (resembling monetary crimes) that stem from individuals, processes, techniques, and exterior occasions. Nonfinancial threats can contain greater reputational results and dearer and sophisticated remediation efforts than monetary threats. Senior companions Thomas Poppensieker, Sebastian Schneider, and coauthors recommend 5 rules—together with versatile governance, well timed monitoring, and punctiliously chosen metrics—that may help financial institutions design a framework for nonfinancial risk appetite.
Massive, established firms typically focus an excessive amount of on sustaining legacy strengths as an alternative of searching for progress. Staircase Ventures founder Janet Bannister—in a dialog with McKinsey senior companion John Kelleher and coauthor—advises executives to act more like VC firms by making a portfolio of long-term bets designed to topple the established order. Incumbent gamers must develop each the need and the talent to disrupt themselves.
Additional notable evaluation from McKinsey:
The case research assortment Rewired in Action illuminates firms which have launched digital transformations to construct worth. Supported by technical and trade experience from McKinsey, these organizations have modified their trajectories by way of the mixing of digital and AI.
A current version of Author Talks options Suzanne Heywood, a former McKinsey senior companion who’s now the chief working officer of Exor Group, talking about her new guide, Wavewalker: Breaking Free (HarperCollins, October 2023). Heywood says her troublesome childhood—she spent most of it at sea, typically in bodily peril—has taught her find out how to be a resilient leader who doesn’t panic under threat.
This briefing be aware, based mostly on McKinsey’s newest revealed insights, was ready by Seth Stevenson, a senior editor in McKinsey’s New York workplace.
Do these insights resonate with you? What else ought to we be writing about now? Inform us by emailing [email protected].
October 26, 2023
Brave progress flows from aspirational mindsets. Our weekly digest of insights explores that matter and extra.
This week’s headline findings:
Firms that embrace brave progress initiatives—even amid international disruptions—usually tend to outperform their trade friends. Senior companions Michael Birshan, Paul Jenkins, Greg Kelly, Ari Libarikian, Jill Zucker, and coauthors recommend methods to build enterprise-wide resilience through bold transformation. Firms ought to create aspirational cultures by fostering revolutionary mindsets and a dedication to sustainable, inclusive progress; activate progress pathways by strengthening core companies utilizing knowledge and AI, increasing into adjoining companies so as to add worth streams, and divesting from underperforming companies the place crucial; and execute with excellence by serving to staff really feel possession of progress efforts.
Client firms aiming to innovate quicker and develop extra profitably than opponents ought to contemplate revamping their operating models. Companion Shaun Callaghan and coauthors define six methods to allow superior progress, improved margins, and innovation at scale: prioritize round customers’ wants, instill a tradition of accountability, use knowledge and AI throughout the group, improve expertise, create a team-based strategy, and elevate know-how and engineering excellence. Streamlining by constructing easier organizational constructions—whereas eliminating low-value work—will help firms deal with what issues most.
Senior companion Dymfke Kuijpers and coauthors study the rising international cadre of “zero consumers”—customers related to zero boundaries (between bodily and digital channels), zero midrange manufacturers (these customers both go low cost or splurge), zero loyalty (they’ll swap model preferences on the drop of a hat), and internet zero (they worth sustainability and transparency). In response to the rise of zero customers, client firms ought to contemplate taking steps resembling strengthening their worth and premium choices, ramping up their personalization capabilities, and reshaping their societal footprints.
Additional notable evaluation from McKinsey:
The case research assortment Rewired in Action illuminates firms which have launched digital transformations to construct worth. Supported by technical and trade experience from McKinsey, these organizations have modified their trajectories by way of the mixing of digital and AI.
A current version of Author Talks options Ron Shaich, founding father of Panera Bread and Au Bon Ache, talking about his new guide, Know What Issues: Classes from a Lifetime of Transformations (Harvard Enterprise Assessment Press, October 2023). Shaich says the important thing to creating and sustaining profitable enterprises is to always act with intent, by identifying today what will matter tomorrow.
This briefing be aware, based mostly on McKinsey’s newest revealed insights, was ready by Seth Stevenson, a senior editor in McKinsey’s New York workplace.
Do these insights resonate with you? What else ought to we be writing about now? Inform us by emailing [email protected].
October 19, 2023
A world banking transition is underneath means.
This week’s headline findings:
Rising rates of interest have boosted international banking earnings, giving the sector its finest outcomes since 2007. However a “nice banking transition” is underneath means: transactions and steadiness sheets are drifting towards different sorts of establishments—together with digital-payments specialists and alternative-asset-management companies. On this yr’s Global Banking Annual Review, senior companions Miklós Dietz, Alexander Edlich, Asheet Mehta, Eckart Windhagen, and coauthors define 5 priorities for monetary establishments hoping to future-proof themselves. Among the many authors’ ideas: develop distinctive know-how, elevate threat capabilities (which may have a broader position to play in a fast-changing setting), and both scale or exit the transaction enterprise.
Europe’s regional attributes create distinctive opportunities and challenges as organizations increasingly look to make the most of generative AI (gen AI), say senior companions Holger Harreis, Gökhan Sari, Alexander Sukharevsky, and coauthors. For instance, Europe’s a number of languages and cultures and sophisticated regulatory setting may complicate using gen AI, however these identical traits may additionally provide native gamers a house discipline benefit.
Telecom firms may as soon as have been the employer of selection for tech expertise, however fiercer competitors for STEM graduates is making hiring harder, at the same time as telcos’ demand for tech expertise will increase. Tech tendencies shaping the trade—together with AI and quantum know-how—make attracting, cultivating, and retaining tech expertise extra necessary than ever. Senior companion Tomás Lajous and coauthors define a three-phase telco talent approach: determine the expertise implications of the enterprise technique, assess expertise gaps and outline priorities, and design a tech expertise working mannequin.
Additional notable evaluation from McKinsey:
The case research assortment Rewired in Action illuminates firms which have launched digital transformations to construct worth. Supported by technical and trade experience from McKinsey, these organizations have modified their trajectories by way of the mixing of digital and AI.
A current version of Author Talks options BBC journalist Ros Atkins talking about his new guide, The Artwork of Clarification: The way to Talk with Readability and Confidence (Wildfire, September 2023). Atkins says that good communication can circulation from asking oneself, “Does this sound like me?”
This briefing be aware, based mostly on McKinsey’s newest revealed insights, was ready by Seth Stevenson, a senior editor in McKinsey’s New York workplace.
Do these insights resonate with you? What else ought to we be writing about now? Inform us by emailing [email protected].
October 12, 2023
Girls within the company office have grown extra bold for the reason that pandemic.
Listed below are this week’s headline findings:
The ninth McKinsey Women in the Workplace report, carried out in partnership with LeanIn.Org, exhibits substantial management features for ladies, with C-suite illustration climbing from 17 % in 2015 to twenty-eight % in 2023, however persevering with underrepresentation for ladies of shade at practically each step on the company ladder. Senior companions Alexis Krivkovich, Lareina Yee, and coauthors highlight a number of different noteworthy findings. As an illustration, girls are actually extra bold than earlier than the pandemic because of new office flexibility, the largest barrier for ladies is step one up into administration ranks (maybe higher characterised as a “damaged rung” than a “glass ceiling”), and office microaggressions towards girls can have a big and lasting impact, making girls who endure them extra doubtless to consider quitting their jobs.
A research analyzing giant American companies reveals that only a few have been in a position to beat market TSR by 5 % or extra over a ten-year interval. Companion Tim Koller and coauthors determine five main routes to TSR success. Amongst them: provide new or enhanced merchandise (for instance, a breakthrough medication), undertake a turnaround (resembling by revamping core operations), or just outmanage friends (by way of very good technique and execution).
Client bundle supply by way of drone is already a truth of life in some locations—particularly Asia–Pacific. Globally, the variety of packages delivered by drone grew by greater than 80 % from 2021 to 2022. Companion Robin Riedel and coauthors venture that commercial drones will complete more than one million deliveries by the end of 2023. Increasing use circumstances (together with healthcare and restaurant deliveries), coupled with larger regulatory readability, are making drone deliveries an more and more viable choice.
Right here’s some additional notable analyses from McKinsey:
The case research assortment Rewired in Action illuminates firms which have launched digital transformations to construct worth. Supported by technical and trade experience from McKinsey, these organizations have modified their trajectories by way of the mixing of digital and AI.
This briefing be aware, based mostly on McKinsey’s newest revealed insights, was ready by Seth Stevenson, a senior editor in McKinsey’s New York workplace.
Do these insights resonate with you? What else ought to we be writing about now? Inform us by emailing [email protected].
October 5, 2023
Are new considerations reshaping international expectations for progress?
This week’s headline findings:
A McKinsey International Survey that was within the discipline from August 31 by way of September 8 finds overall economic sentiment leaning more positive than negative for the second quarter in a row. However senior companion Sven Smit and coauthors be aware that variations emerge when outcomes are examined on a regional degree. European respondents report a extra adverse collective outlook than their North American counterparts. And whereas inflation fears stay high of thoughts throughout the globe, apprehensions about slowing financial exercise in China have come to the fore for Asia–Pacific’s respondents. Non-public sector respondents had been, on the entire, increasingly optimistic about their own companies’ prospects.
Advances in AI may profoundly alter how the travel industry serves customers, develops products, and manages operations. In collaboration with Skift Analysis, senior companion Ben Ellencweig and coauthors clarify how AI will help journey firms use knowledge to extra narrowly section prospects, aiding efforts to hyper-personalize advertising and marketing and providers. AI may determine promising product niches whereas empowering staff to search out operational options to advanced issues.
In an episode of McKinsey’s Deal Quantity podcast, companion Brian Vickery speaks with David Steinbach, international chief funding officer of Hines, one of many world’s largest actual property buyers, builders, and repair suppliers. Steinbach compares the upheaval of this actual property second to the disruption that e-commerce dropped at the retail sector. As metropolis tax bases erode and workplace house tenants uncover completely different wants, Steinbach predicts that real estate industry change will accelerate.
Additional notable evaluation from McKinsey:
The case research assortment Rewired in Action illuminates firms which have launched digital transformations to construct worth. Supported by technical and trade experience from McKinsey, these organizations have modified their trajectories by way of the mixing of digital and AI.
A current version of the Inside the Strategy Room podcast options companion Emma Gibbs talking with John Horn, professor of follow in economics at Olin Enterprise College at Washington College in St. Louis, about his new guide, Contained in the Competitor’s Mindset (MIT Press, April 2023). Horn particulars how to predict competitors’ future moves by entering into their sneakers.
This briefing be aware, based mostly on McKinsey’s newest revealed insights, was ready by Seth Stevenson, a senior editor in McKinsey’s New York workplace.
Do these insights resonate with you? What else ought to we be writing about now? Inform us by emailing [email protected].
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