COVID-19: Implications for business

Our latest perspectives on the coronavirus outbreak, the twin threats to lives and livelihoods, and how organizations can prepare for the next normal.

COVID-19: Briefing note #59, June 16, 2021

Life beyond the COVID-19 pandemic holds much promise.

There’s a lot to look forward to once the COVID-19 pandemic eventually fades into history. As viral-spread and economic-fallout curves both flatten in some parts of the world, signs of change and growth indicate a bright future. Our central pandemic-related analysis this week explores a possible new age of global prosperity, with high rates of economic growth and surging healthcare innovation. Individual groups and industries—including Black US entrepreneurs, medical researchers, and the hospitality sector—have the opportunity to benefit from a reset in context and attitudes.

In the postpandemic era, much is possible. Just with the technology that is currently available—no unheard-of breakthrough required—it’s possible to achieve 3 to 4 percent global economic growth each year for a decade. Leaders won’t need to make a hard choice between sustained and inclusive growth. Instead, growth can be better overall if it’s more equitable. The pandemic experience provoked what could become a renaissance in public-health innovation and delivery. McKinsey’s analysis goes deep and broad to discover what could happen next (exhibit).

One year later, some countries seem to be nearing their pandemic objectives.
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Black US entrepreneurs face unequal access to capital, which makes recovery harder for their businesses. But the recent racial-equity reckoning in the United States has focused multiple industries on finding solutions to that and other obstacles for Black business owners. Banks can increase access to capital, and corporations can offer emergency grants. Financial institutions can both increase financial education and design systems that are more user friendly and communicative.

With the technology that is currently available—no unheard-of breakthrough required—it’s possible to achieve 3 to 4 percent global economic growth each year for a decade.

How can corporations maintain their cultures in a world of hybrid work? On the McKinsey Talks Talent podcast, talent experts Bryan Hancock, Bill Schaninger, and Brooke Weddle discuss the opportunity that companies have to reinvent their cultures. Leaders can focus on helping employees find purpose and make the office the new off site, a place where intentional togetherness occurs. There is a risk, however, that a divide will grow between remote workers and those who come into the office.

If the office is the new off site, the home is the new clinical-trial site. To the growing list of unintended pandemic consequences, add the decentralization of clinical trials. In the face of severe disruption to clinical-trial research during lockdowns, trial sponsors mobilized rapidly to preserve continuity of care and data integrity—for example, by adopting remote consent and patient monitoring, videoconference assessments, and at-home phlebotomy. The medical industry can now build on the unplanned migration to off-site trial settings.

Leisure travel, particularly to outdoor and beach settings, is likely to be a bright spot in the US hospitality industry’s recovery. In a video conversation, Vik Krishnan, leader of McKinsey’s work in the US travel industry, discusses the hospitality sector and suggests pockets of emerging demand in which industry leaders should focus resources.

The Inside the Strategy Room podcast steps back and examines lessons from the pandemic experience of managing through extreme uncertainty. McKinsey experts Patrick Finn, Mihir Mysore, and Ophelia Usher discuss how leaders must be willing to revisit assumptions, change direction, and admit mistakes when the firmament is shaking. Also key: an integrated nerve center of decision makers who can think and act quickly. Above all, leaders who have lived through hardships are essential in such circumstances.

Our Author Talks series features Kirsten Neff, an associate professor of educational psychology at the University of Texas at Austin, discussing her new book Fierce Self-Compassion: How Women Can Harness Kindness to Speak Up, Claim their Power and Thrive. Neff examines why women shame themselves for failure and how they can learn to be kind to themselves while fighting for their professional wants and needs. Our most recent edition of McKinsey for Kids introduces younger audiences to mangrove forests and explains why building a “business case” for mangroves can help protect Bengal tigers and king cobras. For more perspectives, please see the full collection of our coronavirus-related content, visual insights from our chart of the day,” a curated collection of our first 100 articles relating to the coronavirus, our suite of tools to help leaders respond to the pandemic, and how our editors choose images that help readers visualize the impact of an invisible threat.


This briefing note was edited by Katy McLaughlin, a senior editor in the Southern California office.




COVID-19: Briefing note #58, June 9, 2021

Understanding who we have become.

Change accelerates under pressure, as illustrated by the last year and a quarter. This week, McKinsey drilled into numerous changes that have reset the context for companies, employees, and societies. McKinsey experts analyzed changes to consumer profiles in Asia, the consequences of women’s exodus from the workforce, and why more than 70 HR leaders believe this is a new era for their profession. Our author interview this week suggests a way of getting a handle on the ever-morphing human landscape: we all need to become anthropologists, skilled in recognizing the cultural patterns around us (see more on our latest Author Talks below).

Half of global consumption growth over the next decade will come from Asia, according to research from the McKinsey Global Institute. Falling poverty rates, rising incomes, shrinking household size, aging populations, and more women earning more money are all factors reshaping Asian consumer trends. Those who wish to sell to these consumers need to understand factors including their growing interest in sustainability, Asian brands, and new forms of ownership. Another trend to keep in mind: inequality is growing and was likely exacerbated by the pandemic (exhibit).

Asia's consumers will be at the forefront of global consumption growth in the next decade.
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HR leaders believe their profession has transformed in the wake of the COVID-19 pandemic. After years of pressure to digitize their roles and move employees into “self serve” solutions, McKinsey’s interviews with more than 70 chief HR officers in Europe revealed an impulse to revive human interaction. These leaders believe they must engage personally to bring in and retain strategic talent and improve morale. One reason for the pivot: they learned during the pandemic, when decisions had to be made at lightning speed, that leadership talent is everywhere and just needs the right support to flourish.

Pressure can accelerate change, but sometimes reverses it. That’s the sad story behind the 2.3 million US women who left the workforce in the first year of the pandemic. The latest US Bureau of Labor statistics show that recent employment gains dramatically favor men. A political scientist who studies this “shecession” and an HR executive who left her job to oversee her children’s online schooling discuss the lost paychecks, stalled careers, and lower lifetime earning that could reverberate for decades to come.

Another thing women lose by leaving the workforce? Purpose. McKinsey organizational experts found that 70 percent of people say they derive their purpose in life through their work. On The McKinsey Podcast, partner Naina Dhingra and senior partner Bill Schaninger discuss why companies should serve as conduits for the unique purpose of each of their employees, rather than imposers of a collective purpose. The pandemic has made employees contemplate these questions more than ever, with millennials the most concerned that work provides a sense of meaning.

US healthcare consumers say they gained weight, exercised less, and delayed care throughout the pandemic. Their view of healthcare providers and what they want in the future changed too, according to McKinsey surveys. Healthcare providers should adapt to the post-COVID-19 environment by focusing on the “whole person” and offering incentives to both consumers and providers to research costs and options.

Here are some other key findings from our sector research this week:

Our Author Talks series features Gillian Tett, the Financial Times markets and finance columnist and US managing editor, on her book Anthro-Vision: A New Way to See in Business and Life. Tett explores how anthropologists get inside the minds of people in order to understand other cultures and how leaders can do the same to appraise their own environments. Our most recent edition of McKinsey for Kids introduces younger audiences to mangrove forests and explains why building a “business case” for mangroves can help protect Bengal tigers and king cobras. For more perspectives, please see the full collection of our coronavirus-related content, visual insights from our chart of the day,” a curated collection of our first 100 articles relating to the coronavirus, our suite of tools to help leaders respond to the pandemic, and how our editors choose images that help readers visualize the impact of an invisible threat.


This briefing note was edited by Katy McLaughlin, a senior editor in the Southern California office.




COVID-19: Briefing note #57, June 2, 2021

Problems were to be expected, but not these problems.

The pandemic has left businesses and governments to grapple with a perplexing collection of supply-chain and logistical disruptions. Over a year ago, we knew we were facing upheavals in health, education, and workplace systems. Ramifications such as the semiconductor shortage, however, were harder to predict. This week, McKinsey examined a variety of unexpected pandemic consequences and looked for ways to address them.

The global semiconductor shortage threatens economic recoveries and poses an urgent problem for carmakers, which have already announced production rollbacks—and billions of dollars in expected revenue losses—as a result. McKinsey experts examined the causes of the shortage, including a drop in consumer demand for vehicles at the onset of the pandemic, which prompted semiconductor suppliers to shift production to other products. Automakers and suppliers should consider significant strategic changes to head off a repeat (exhibit).

Automotive semiconductor sales lagged in 2020, but growth in most other segments is expected to exceed pre-COVID-19 estimates.
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Grocery is another industry that has been turned upside down by the pandemic, not once but multiple times as consumers respond to the evolving situation. At Tesco, online sales doubled in the United Kingdom, where the company has a strong online business, and in Central Europe, where growth is coming off a low base, said Matthew Simister, Tesco’s Central Europe CEO, in an interview. Growing e-grocery leads to the question of whether brick-and-mortar grocers will survive in Europe, and if so, which formats are best positioned for success? McKinsey identified amply stocked “soft discounters” and moderately sized, centrally located “hypermarkets light” as winning models. Leading players are participating in the automated warehouse revolution that is lowering labor costs and supporting e-grocery. Another crucial tactic: convincing shoppers that a grocer offers the best value by strategically discounting, improving private-label lines, and offering a large variety of cheap products.

The devastation in India is among the saddest unanticipated turns in the pandemic. After the first wave of the disease faded quickly in 2020, the current disaster took the lives of nearly 28,000 people in one week last month, amid 2.3 million new reported cases. The world should take action, write partner Pooja Kumar and senior partner Navjot Singh, with support for oxygen and vaccine production and distribution. Such help not only serves a humanitarian purpose but also lowers the risk that variants will threaten recoveries elsewhere.

Some of the health repercussions of the pandemic are indirect, such as the side effect of fewer people seeking treatment for mental and behavioral health problems. McKinsey’s behavioral-health-services interactive tracks how many people are accessing care for problems including substance abuse and serious mental illness.

Other key findings from our sector research this week:

  • Large companies create flows to households in OECD economies differently today compared with 25 years ago. The McKinsey Global Institute mapped the pathways through which a dollar of company revenue reaches households. Comparing two periods, 1994–96 and 2016–18, productivity gains amounted to 25 percent in real terms, though wages grew only 11 percent. Where did the gains from labor productivity go? Predominantly to capital income.
  • Industrial companies can digitally transform with six building blocks, including upskilling and focusing on data management. There’s good reason to try: a McKinsey analysis of 350 industrial companies found that those that made investments in automation, e-commerce, and other areas achieved higher revenues and total returns to shareholders than digital laggards.
  • Refrigeration pioneer Dometic Group has spent the past 100 years innovating into areas including mobile homes, sports and outdoor tools, and home food and beverage equipment. On the Inside the Strategy Room podcast, Peter Kjellberg, chief marketing officer and head of global verticals at Dometic, explains his system to test whether a company will support a brand reinvention: look into the CEO’s eyes, and if he or she does not display genuine enthusiasm, forget it.

Our Author Talks series features Shankar Vedantam, host of NPR’s Hidden Brain podcast, about his Useful Delusions: The Power and Paradox of the Self-Deceiving Brain, coauthored with Bill Mesler. No one likes the idea of being duped, but our ability to persuade ourselves enables bonds and passions that logic would rule out. Our most recent edition of McKinsey for Kids introduces younger audiences to mangrove forests and explains why building a “business case” for mangroves can help protect Bengal tigers and king cobras. For more perspectives, please see the full collection of our coronavirus-related content, visual insights from our chart of the day,” a curated collection of our first 100 articles relating to the coronavirus, our suite of tools to help leaders respond to the pandemic, and how our editors choose images that help readers visualize the impact of an invisible threat.


This briefing note was edited by Katy McLaughlin, a senior editor in the Southern California office.




COVID-19: Briefing note #56, May 26, 2021

How can we prepare better for next time?

When a crisis turns into a recovery, or vice versa, leaders must toggle between managing for the present and the future. This week, McKinsey examined how sectors including health, air travel, consumer retail, and wealth management can plan for the long term even as they cope with the immediate disruptions of the pandemic. The bottom line: modeling, predicting, and planning are all important, but investing with courage is essential.

Five dollars a person. That’s how much McKinsey’s experts project it will cost to prevent another pandemic like COVID-19, which has caused what may become a $16 trillion global economic disruption (exhibit). By spending a total of $357 billion over the next decade on preparations including pathogen surveillance, global immunization, and medical supply stockpiles, countries can reduce the likelihood of a repeat.

Assuming a COVID-19-scale epidemic is a 50-year event, the return on preparedness investment is clear, even if it only partly mitigates the damage.
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Other health concerns need preventative action too. Europe can improve the medical conditions that erode roughly 15 percent of its GDP by investing in solutions for mental health, obesity, back pain, diabetes, and smoking, among other problems. The pandemic’s devastating consequences—a half-million lives and 7.5 percent of GDP lost in 2020 alone—have created a unique moment for Europe to rethink health-resource allocation, funding, and delivery models.

On The McKinsey Podcast, the firm’s air-travel experts Alex Dichter and Robin Riedel discuss the near- and long-term concerns of the air-travel industry, which suffered roughly half a trillion dollars in revenue loss in 2020. Airlines are thinking about safety, recovering business, and how to bring back employees and equipment. In the future, sustainability, cargo by drone, and customer experience will be among the top priorities.

Let there be no doubt: top executives confirm that their organizations are switching to hybrid for work that isn’t essential to perform on site. The Five Fifty, a quick look accompanied by a deep dive, illustrates that while leaders know hybrid is the future, they and their employees are mired in doubt and anxiety about what it all means.

It was a year of big percentages for European grocers: in 2020, the online grocery channel grew by 55 percent, 60 percent of customers changed their shopping behaviors, and the industry sold 8 percent more groceries by volume. Looking ahead, European grocers should expect grocery spending to decrease slightly, some of the behavioral changes to stick, and healthy and sustainable food preferences to grow.

An April McKinsey survey of 29,000 respondents in 24 countries found that while the pandemic drove rapid adoption of digital channels, growth has plateaued in the past six months and may begin to slip back as the virus retreats. Companies can hold onto new digital customers by gaining their trust, investing in “phygital,” and innovating to provide excellent experiences, particularly in education, grocery, and healthcare.

COVID-19 underscored how important it is to have tools that improve decision making in a crisis. One such tool is “nowcasting,” a prediction model that uses complex econometric techniques and contemporaneous data to provide a timely view of economic indicators. McKinsey experts suggest a new approach to nowcasting that involves improving the quality and reducing the number of variables.

Last year was a wild ride for financial advisors, who steered clients through turmoil and saw 9 percent growth—a record—in median assets per advisor compared with the year prior. McKinsey’s annual report on The state of North American retail wealth management collected data from roughly 70,000 North American financial advisors. Among findings: fee-based revenues grew but were offset by a decline in fee pricing.

Our most recent edition of McKinsey for Kids introduces younger audiences to mangrove forests and explains why building a “business case” for mangroves can help protect Bengal tigers and king cobras. For more perspectives, please see the full collection of our coronavirus-related content, visual insights from our “chart of the day,” a curated collection of our first 100 articles related to the coronavirus, our suite of tools to help leaders respond to the pandemic, and how our editors choose images that help readers visualize the impact of an invisible threat.


This briefing note was edited by Katy McLaughlin, a senior editor in the Southern California office. 




COVID-19: Briefing note #55, May 19, 2021

Making the most of the great reset.

After a long pandemic pause, some parts of the world are finally contemplating a restart. Where the virus is subsiding, people can begin assembling an approach to life and business that combines what they miss about the time before COVID-19 and what they discovered during the pandemic. That future must include a plan for those, such as the unemployed, who are still stuck on pause.

This week, McKinsey took a deep dive into employment and workplace issues, with multiple studies, articles, and podcasts.

A McKinsey survey of 100 executives found that 90 percent envision a future with some combination of remote and on-site work, but most (68 percent) have no detailed plan for how it will work (exhibit). The surveyed executives, from a wide range of industries, have good reason to desire a future with remote options: large numbers say it has led to increases in productivity and customer satisfaction.

Most organizations don’t yet have a detailed vision in place for hybrid work.
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To help companies design their strategies, McKinsey experts suggest hybrid approaches for general and administrative functions, categorizing them into four types with varying needs for interaction. Office versus home is not the only paradigm; options include teams that work mostly remotely but come together for periods of intense collaboration, or hub-and-spoke systems where remote workers can come into satellite or coworking spaces as desired.

On the McKinsey Talks Talent Podcast, partners Susan Lund and Bryan Hancock and senior partner Bill Schaninger discuss new McKinsey Global Institute research on the lasting impact of the pandemic on labor demand. In the United States, 17 million people are in jobs that may see less demand, while globally 100 million people may need new skills. The daunting panorama, particularly for workers in retail and travel, underscores the need to reskill and move jobs to people and people to jobs.

Vaccine development need never be the same after the pandemic. McKinsey researchers examined how it was possible to gain approval for three COVID-19 vaccines in a mere 11 months. The unprecedented speed was due to regulators moving faster, companies and governments accepting high investment risk for billions of dollars, around-the-clock lab work, and—because the virus spread with tragic speed—accelerated clinical trials. Some of the victories, such as fast decision making within pharma companies and high tolerance for investment risk, could be applied to future drug development.

Viral-vector gene therapy is emerging as a scientific superstar, its power demonstrated by one of the early-approved COVID-19 vaccines. This technology poses abundant promise but also several challenges, including the expense and side effects of high doses.

Even amid so much change, television advertising is still relevant. Advertisers often simply hand off their broadcast strategies to media agencies, but evaluating data faster, adjusting ad placement, and increasing the frequency of media tenders can help companies get the most out of their TV spending.

Our Author Talks series features Dambisa Moyo, an economist who currently sits on the boards of Chevron, 3M, and Condé Nast, on her new book, How Boards Work: And How They Can Work Better in a Chaotic World (Basic Books, 2021). The book outlines traditional board tasks and describes new “cultural frontier” responsibilities. In their new book, Noise: A Flaw in Human Judgment (Hachette Book Group, May 2021), strategy experts Daniel Kahneman and Olivier Sibony examine the unwanted variability in professional judgments and explain how to practice “decision hygiene.” Our most recent edition of McKinsey for Kids introduces younger audiences to mangrove forests and explains why building a “business case” for mangroves can help protect Bengal tigers and king cobras. For more perspectives, please see the full collection of our coronavirus-related content, visual insights from our “chart of the day,” a curated collection of our first 100 articles related to the coronavirus, our suite of tools to help leaders respond to the pandemic, and how our editors choose images that help readers visualize the impact of an invisible threat.


This briefing note was edited by Katy McLaughlin, a senior editor in the Southern California office.




COVID-19: Briefing note #54, May 12, 2021

Don’t let the pandemic whittle away at the workforce.

The pandemic has hit everyone hard, but some groups have suffered in unique ways. Working mothers, Asian Americans, and nurses are among those whose difficulties at work and at home—which for many is now the same stressful place—could result in a retreat from their careers. As employers prepare to emerge from the crisis, they must find creative ways to support the hardest-hit communities, which can require rethinking long-held beliefs.

The pandemic has been brutal for working mothers, a third of whom say they are considering leaving the workforce or downshifting their careers. One of the culprits is the double shift, the eternal burden of working mothers that has gotten worse during the COVID-19 crisis and is even more troubling for women of color (exhibit). Companies can help by providing emergency childcare and tutoring services, offering to continue remote work for those who want it, and revising hiring standards to eliminate the bias against gaps in employment.

Rising domestic and childcare responsibilities are top of mind for mothers who have considered leaving the workforce.
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A McKinsey survey of 400 frontline nurses revealed that 22 percent may leave their jobs providing direct patient care in the next year, a reflection of the physical and mental strain the pandemic has placed upon the profession. Employers should counteract this by improving in four key areas: providing more recognition, incentives, and breaks; offering flexible scheduling; finding opportunities for nurses to provide telemedicine services and other innovative patient-care delivery methods; and reskilling, so that nurses can keep up with technological advances.

Asian Americans have long struggled for equality in the workplace, a fact reflected by their low representation in senior-level jobs relative to their representation in entry-level jobs. In a series of charts based on survey data from McKinsey’s latest Women in the Workplace report, created in partnership with LeanIn.org, we explore the negative effects the pandemic has had on Asian Americans, concerning stress levels, engagement in work, and sense of opportunity. Solutions include promoting the practice of sponsorship and expanding workplace flexibility.

McKinsey also looked at the US dairy industry’s tumultuous first pandemic year, which included milk dumping in April 2020 even as some store dairy cases sat empty. Our survey of 50 US dairy CEOs in the fourth quarter of 2020, followed by interviews, revealed a sense of optimism combined with concern over changing consumer tastes. Best practices this year include being proactive about health and sustainability messaging, expanding the talent pool to include remote workers, and making supply chains more resilient.

On The McKinsey Podcast, former Unilever CEO Paul Polman and McKinsey senior partner Dame Vivian Hunt discuss why, increasingly, the way for companies to deliver resilience, longevity, and growth is to build stakeholder capitalism. The pandemic illustrated how expensive it is to let a health problem fester; companies should learn this lesson and apply it to broad social issues including the environment and diversity.

Our Author Talks series features former Best Buy CEO and chairman Hubert Joly on his new book, The Heart of Business: Leadership Principles for the Next Era of Capitalism (Harvard Business Review Press, May 2021). Mr. Joly, who currently lectures at Harvard Business School, writes about what it means to lead with purpose and humanity. Our most recent edition of McKinsey for Kids introduces younger audiences to mangrove forests and explains why building a “business case” for mangroves can help protect Bengal tigers and king cobras. For more perspectives, please see the full collection of our coronavirus-related content, visual insights from our “chart of the day,” a curated collection of our first 100 articles related to the coronavirus, our suite of tools to help leaders respond to the pandemic, and how our editors choose images that help readers visualize the impact of an invisible threat.


This briefing note was edited by Katy McLaughlin, a senior editor in the Southern California office.




COVID-19: Briefing note #53, May 5, 2021

How can we prepare the workforce for the postpandemic world?

During the pandemic, we learned to cope; in the postpandemic world, we need to learn to thrive. Companies emerging from the crisis are realizing that workforces require new capabilities to face the digital and environmental future. This week, McKinsey examined what industries should do to develop the talent and knowledge they need.

To flourish during and after the pandemic, companies need a new set of skills, including social and emotional, advanced cognitive, and digital capabilities. In a recent McKinsey Global Survey, 69 percent of respondents said that building the skills of existing staff is more important than any other method of talent building, including hiring (exhibit). It’s time for companies to strategize talent development and identify the most effective options, including digital learning and in-person workshops.

Sixty-nine percent of respondents report an increase in skill building during the pandemic, more so than for other actions to close skill gaps.
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Boards and management responded to the pandemic by working harder and collaborating more on crisis management. Having found more effective ways to work together, directors and managers should build on the momentum by continuing to hold some meetings remotely, even when it is no longer required for health reasons, engaging in more formal and informal contact, and focusing on corporate resilience.

Business leaders are feeling good about the global economy. In the April McKinsey Global Survey on economic sentiment, 73 percent of respondents said they believe that conditions will improve in the next six months. The share of executives expecting conditions to worsen has shrunk by more than half in the past three months. Sentiment is most buoyant in North America and Greater China and most negative in India and Latin America, where the pandemic has recently taken a devastating toll.

Meanwhile, workers may be too groggy to feel optimistic about anything. This edition of the McKinsey Quarterly Five Fifty, a quick look accompanied by an optional deep dive, examines “the great exhaustion,” in which nearly half of all workers surveyed report symptoms of burnout brought on by hybrid work.

The world could gain a new seventh largest economy by 2030 if Indonesia can return to its prepandemic growth rate. McKinsey proposes ten ways to reignite Indonesia’s economy, including by investing in its healthcare system, adopting modern agricultural technologies, and promoting domestic tourism.

Here are some other key findings from our sector research this week:

Our most recent edition of McKinsey for Kids introduces younger audiences to mangrove forests and explains why building a “business case” for mangroves can help protect Bengal tigers and King cobras. Our Author Talks series features Ohio State University professor Angus Fletcher on his new book, Wonderworks: The 25 Most Powerful Inventions in the History of Literature, about a neuroscience-based method of reading and teaching literature that reveals its power to inspire. For more perspectives, please see the full collection of our coronavirus-related content, visual insights from our “chart of the day,” a curated collection of our first 100 articles related to the coronavirus, our suite of tools to help leaders respond to the pandemic, and how our editors choose images that help readers visualize the impact of an invisible threat.


This briefing note was edited by Katy McLaughlin, a senior editor in the Southern California office.




COVID-19: Briefing note #52, April 28, 2021

The pandemic is a fierce teacher, but how do we apply the lessons?

We know the COVID-19 pandemic has changed consumer behavior, attitudes toward office work, and even some views about society itself. But knowing something and knowing what to do about it are two different things. This week, McKinsey looked across industries and sectors at how knowledge—increasingly, though not exclusively, generated by advanced-analytics technology—can be used to improve the way we tackle challenges.

The pandemic reshaped what consumers buy and how they go about getting it. The challenge for consumer-packaged-goods companies is to redesign their supply-chain operating models to be resilient enough to meet new consumer demands. Because each company is different, key first steps include identifying unique strengths and honing in on the most critical objectives (exhibit).

Supply-chain operating models follow a few archetypes, with no single, best-practice option.
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Among the most obvious pandemic takeaways: workplaces will never be the same, and companies that want to lure workers back in will have to dangle more than a sterile “cube farm” and lukewarm office coffee. But for tenants, it’s not obvious how the future will play out in their office spaces, so owner/operators must take the lead, offering more flexible leasing models, redesigning layouts to accommodate hybrid work, and supplying a “wow factor.”

The pandemic gave many business leaders practice in thinking about an external issue as a core concern. Stakeholder capitalism, similarly, asks business leaders to define their mission as creating long-term value not only for shareholders but also for customers, suppliers, employees, communities, and others. Making stakeholder capitalism work requires five steps, including identifying stakeholders, defining ways to serve them, and committing to a long-term outlook.

Private markets experienced a year of disruption, starting with a “COVID correction” in the second quarter and followed by a K-shaped recovery that favored private equity and left real estate lagging. These are some of the insights found in the McKinsey Global Private Markets Review 2021, a thorough analysis of the bumpy ride of 2020.

Here are some other key findings from our sector research this week:

  • Advanced analytics could revolutionize cancer treatment, but use of this technology is underdeveloped. The field is held back by factors that include a lack of data scientists with oncology expertise. But companies that solve the biggest problem—a cultural tendency toward skepticism of analytics techniques—will move fastest in adopting these game-changing tools.
  • Digital analytics have transformed nearly every part of how companies operate, except for the one that guides them all: strategy. It’s time for leaders to bring advanced analytics into the strategy room to help reduce bias, identify trends, and spot growth opportunities.
  • As companies rebuild and restructure for the next normal, they need to determine how and where to invest in new capabilities. CFOs are ideally positioned to identify capability needs, articulate the value in investing in them to C-suite leaders, and steer resources where they are most required.
  • The McKinsey Podcast this week delves into that most complex of human relationships. No, not with Mom, the ex, nor the teenage offspring. Instead, Tera Allas, director of research and economics in McKinsey’s London office, examines the power our bosses have over us, why working from home changed some dynamics, and how important it is to organizations for bosses to be better at the job.

Business leaders crave new perspectives. In Our Asian Voices, a new feature, 72 Asian colleagues at McKinsey raise their voices and share their stories. For more perspectives, please see the full collection of our coronavirus-related content, visual insights from our “chart of the day,” a curated collection of our first 100 articles related to the coronavirus, our suite of tools to help leaders respond to the pandemic, and how our editors choose images that help readers visualize the impact of an invisible threat.


This briefing note was edited by Katy McLaughlin, a senior editor in the Southern California office.




COVID-19: Briefing note #51, April 21, 2021

Now that the pandemic has changed us, what else needs to change?

The COVID-19 crisis forced a sudden, new way of life upon the world, which scrambled for practical ways to adapt. This week, McKinsey looks at the less obvious, more fundamental ways in which the pandemic has forever altered us, revealing new priorities, capabilities, and outlooks.

We examine how the pandemic created a new sense of urgency to make US manufacturing more competitive. The crisis underscored domestic manufacturing’s role in providing critical health, safety, and national-security products as well as the sector’s need to invest, modernize, and revitalize the manufacturing process (exhibit).

Manufacturing creates outsize economic impact in the United States.
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In an interview on how to prevent future health crises, Dame Sally Davies describes how the COVID-19 pandemic provided a master course, through success and failure, on vaccine development, data deployment, and global collaboration. Dame Sally, the United Kingdom’s chief medical adviser for nine years and now the master of Trinity College, Cambridge, established the Trinity Challenge, a coalition of leaders dedicated to preparing for future health emergencies.

McKinsey provides much-needed comic relief in this video by two lecturers at Stanford’s Graduate School of Business. They identify humor as the key to connecting with colleagues, now that a pandemic and screens stand in the way. Their online course and new book make a case for why being a better leader today requires lightening up and having a few laughs.

Other key findings from our sector research this week:

  • In this chart-driven analysis of the challenges Black Americans face at work, we examine ten key factors contributing to the inequality these workers experience.
  • Our latest edition of the Five Fifty draws up a contradiction: the companies that most prioritize design have nearly double the revenues of their peers, but less than 10 percent of McKinsey survey respondents said their firms have reached their full design potential. This quick read—with optional deep dives—examines how to maximize design’s potential for growth.
  • Fintech start-ups are nipping at banking incumbents, but an active, business-building response can turn the tables. The article provides specific examples of big banks, including Goldman Sachs and State Bank of India, which successfully broke the status quo with new initiatives.
  • The Fourth Industrial Revolution means that new digital and analytics tools can help labor-intensive manufacturers predict and manage employee attendance, skill matching, and turnover. Our authors explain how using these tools can boost productivity and earnings by double-digit percentages.
  • A recent episode of The McKinsey Podcast asks, “How can we learn to be better learners?” Elizabeth Young McNally, a global leader of the McKinsey Academy, and Matthew Smith, McKinsey’s chief learning officer, discuss how to build “muscle” for adopting new skills. Put their ideas into practice with the 3x3x3 approach, McKinsey’s heuristic for creating goals and the accountability to achieve them.

Business leaders crave new perspectives. In Our Asian Voices, a new feature, 72 Asian colleagues at McKinsey raise their voices and share their stories—on what Asian identity means, what allies can do to support them, and how they are processing this moment. Our Author Talks series features two authors on how to make authentic connections: Communications consultant Susan McPherson discusses her new book about replacing superficial networking with the pursuit of genuine relationships, and Karin M. Reed, a former broadcast journalist and communications expert, talks about her book on making remote meetings effective. For more perspectives, please see the full collection of our coronavirus-related content, visual insights from our “chart of the day,” a curated collection of our first 100 articles related to the coronavirus, our suite of tools to help leaders respond to the pandemic, and how our editors choose images that help readers visualize the impact of an invisible threat.


This briefing note was edited by Katy McLaughlin, a senior editor in the Southern California office.




COVID-19: Briefing note #50, April 14, 2021

No one is safe until we are all safe, so how can vaccine programs work for everyone?

With multiple approved vaccine candidates worldwide and manufacturing capacity that covers 85 percent of the world’s population, hope is surging. But getting vaccination right is multifaceted, with abundant opportunities for missteps, and complicated by variants that can throw even the best-oiled system into disarray.

The McKinsey Podcast this week features senior partners Lieven Van der Veken and Tania Zulu Holt outlining what we’ve learned so far about a well-built vaccine rollout. Each country’s program is a complex system of component parts, and the challenge is making sure a weakness in one area doesn’t delay or derail everything else. A key question countries face is how to inspire popular acceptance of the vaccine. The answer? Perhaps another Elvis, who played a role in promoting the polio vaccine in the 1950s.

Employers can also play a key role in the quest for herd immunity. In a recent McKinsey survey of more than 400 US-based companies, over 40 percent of employees said they would be significantly more likely to get the vaccine if their employers helped them do it. Paid time off to get vaccinated was the most popular incentive, but information and appointment help also rated high.

Such efforts are not just niceties, as this exhibit illustrates. If new variants take hold, US herd immunity will not occur if the populations that describe themselves as either “cautious” or “unlikely” abstain.

Achieving herd immunity will likely require at least all consumers who are interested to get vaccinated.
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We looked into which sectors will benefit from a rebound in consumer spending, including the wellness arena, a $1.5 trillion market growing at 5 to 10 percent per year. The new edition of The Next Normal takes a deep dive into the post-COVID-19 world of shopping, where the tech-enabled “store of the future” can double retailers’ earnings before interest and taxes (EBIT) margins. The catch? Retailers need to make plans for the “phygital” future now, or get left behind. For a look at how a century-old fashion firm is preparing, see our interview with Tiger of Sweden’s CEO.

Other key findings from our sector research this week:

Business leaders crave new perspectives. In Our Asian Voices, a new feature, 72 Asian colleagues at McKinsey raise their voices and share their stories—on what Asian identity means, what allies can do to support them, and how they are processing this moment. Our Author Talks series features top Hollywood voice and dialect coach Denise Woods discussing her new book on how to use breath and vocal variety and color for better communication. For more perspectives, please see the full collection of our coronavirus-related content, visual insights from our “chart of the day,” a curated collection of our first 100 articles related to the coronavirus, our suite of tools to help leaders respond to the pandemic, and how our editors choose images that help readers visualize the impact of an invisible threat.


This briefing note was edited by Katy McLaughlin, a senior editor in the Southern California office.




COVID-19: Briefing note #49, April 7, 2021

In the new world of work, which are the ties that bind?

As economies reopen, many companies plan to combine remote work with time in the office to get the best mix of productivity and collaboration. But with employees feeling anxious and burned out, getting the balance of the new hybrid model right is critical. We surveyed 5,000 employees to find out what they’re saying about remote work and summarized the findings in a dozen charts. Here’s an important one: any communication helps a little, but detailed information on policies and plans helps much more (exhibit).

Organizations with clearer communication are seeing benefits to employee well-being and productivity.
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Along with employee burnout and anxiety has come a lot of soul-searching. After a year of the COVID-19 pandemic, people are reexamining and remaking every part of their lives, especially their jobs. In another survey, we found that more than 70 percent of employees say that their sense of purpose is defined by their work. Companies that ignore this do so at their peril because employees also say that if their job doesn’t give them purpose, they’ll leave for one that will.

This week, we looked into the next normal for several sectors, starting with airlines. Leisure trips will fuel the recovery, but it won’t be easy or quick. As senior partner Alex Dichter explains in a companion video, the industry could take on as much as $1.1 trillion in new debt by 2024. A successful return to profit will depend on its ability to restructure, raise equity, and invest for growth.

Other key findings from our sector research this week:

  • For automakers and other mobility companies, the future will be clean, connected, and electric.
  • Fuel retail will also be affected. The industry has thrived by offering well-stocked convenience stores. Now, forecourt owners will need to add new lines, including electric-vehicle charging.
  • The resumption of the credit cycle will offer new opportunities in consumer lending.
  • Eat your own cooking: semiconductor companies make the chips that make artificial intelligence (AI) possible, and can benefit by applying AI to their own operations.
  • Every industry is moving to the cloud—but not all will succeed. The McKinsey Quarterly Five Fifty forecast is “cloudy, with a chance of billions.”

We were pleased to speak with two notable industry leaders this week. John Waldron of Goldman Sachs discussed business priorities in the postpandemic era with global managing partner Kevin Sneader and senior partner Carolyn Dewar. And Twilio CEO Jeff Lawson talked about how to close the communication gaps between business leaders and software developers in a conversation with senior partner Paul Roche and partner Shivam Srivastava.

Business leaders crave new perspectives. In Our Asian Voices, a new feature, 72 Asian colleagues at McKinsey raise their voices and share their stories—on what Asian identity means, what allies can do to support them, and how they are processing this moment. Our Author Talks series features the writers of the best new business books; in this week’s edition, Joann S. Lublin talks about power moms. For more perspectives, please see the full collection of our coronavirus-related content, visual insights from our “chart of the day,” a curated collection of our first 100 articles related to the coronavirus, our suite of tools to help leaders respond to the pandemic, and how our editors choose images that help readers visualize the impact of an invisible threat.


This briefing note was edited by Mark Staples, an executive editor in the New York office.




COVID-19: Briefing note #48, March 31, 2021

It’s year two of the COVID-19 crisis. What comes next?

One year ago this month, WHO declared a global pandemic. Through a long and dismal year, McKinsey has tracked the development of COVID-19 and its devastation and disruption. Today, we mark the milestone with a set of new reports and articles that look ahead with considerable optimism to the second year of the pandemic.

Public health is still the chief concern. In the latest installment of our perspectives on when the pandemic will end, we see progress toward normalcy during the second quarter of 2021 in the United Kingdom and the United States and herd immunity in the third quarter (Exhibit 1). The new wave of cases in the European Union means that these transitions are likely to come later. But new variants of the coronavirus and other risks threaten that timeline.

Earlier peak, longer tail: Q3 now likelier for herd immunity, given vaccine availability, but variants of concern could prolong the end.
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New US COVID-19 cases rose sharply in late 2020 and, until recently, declined nearly as steeply during the first few months of 2021. This pattern is similar to that of other respiratory viruses in the winter months, but in this case, many are not sure precisely why it has happened. One unexplored factor may be at work: the different patterns of human interactions. Some people get out and about much more than others, but most epidemiological models don’t account for that.

The global economy has rebounded from the lows of 2020 (stock markets have too, though in different ways), but its future direction is hazy, even by the standards of economic forecasting. Throughout the crisis, we have offered two essential tools for business leaders to plot a course; this month, we updated both of them. In April 2020, we published a set of nine scenarios as part of our economic model and surveyed thousands of global business executives about their economic outlook. Our latest survey finds greater optimism about the economy and corporate prospects than at any time since the crisis began—and on a few fronts, more than in the past several years (Exhibit 2). Still, weak demand continues to threaten corporate growth, and the pandemic remains the biggest risk to growth in respondents’ countries. See our interactives about the scenarios and the surveys here.

In every region but Latin America, a majority of respondents expect improvements in their countries’ economies.
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Productivity has long been a weak spot in global growth, but the crisis might have kick-started a rise in productivity. As companies shifted rapidly to online channels, automated production tasks, increased operational efficiency, and sped up decision making and innovation of operating models, productivity also rose—and more growth may be in store. New McKinsey Global Institute research finds that there is potential to accelerate annual productivity growth by about one percentage point in the period to 2024. The stakes are high. One percentage point of additional productivity growth per year in every country to 2024 would imply an increase in per capita GDP ranging from about $1,500 in Spain to about $3,500 in the United States.

How do companies find the extra gear needed for a sustained burst in productivity? As our researchers suggest, speed thrills but also chills: companies need to work through five critical questions in the next few months to lock in the speed of the pandemic response in a way that does not wreck mental health or cause employees to burnout. According to a McKinsey survey, productivity is up for about half of all workers, with the other half reporting no change or lower productivity. Tilting that balance will be vital.

Also this week: The McKinsey Podcast listened in on the postpandemic state of fashion (it’s sweatpants today, but tomorrow will be different). And our industry researchers took a look at African banking in the new reality and the path forward for European grocers.

Business leaders crave new perspectives. In Our Asian Voices, a new feature, 72 Asian colleagues at McKinsey raise their voices and share their stories—on what Asian identity means, what allies can do to support them, and how they are processing this moment. Our Author Talks series features the writers of the best new business books; in this week’s edition, Saadia Madsbjerg speaks on making money moral. For more perspectives, please see the full collection of our coronavirus-related content, visual insights from our “chart of the day,” a curated collection of our first 100 articles related to the coronavirus, our suite of tools to help leaders respond to the pandemic, and how our editors choose images that help readers visualize the impact of an invisible threat.


This briefing note was edited by Mark Staples, an executive editor in the New York office.




COVID-19: Briefing note #47, March 24, 2021

After a year when consumers did everything differently, what changes will stick?

Consumer behavior has changed: it’s a truism of COVID-19 analysis. What’s missing is a sense of what behaviors have changed for good and what are likely to revert to prepandemic norms. A new report from the McKinsey Global Institute offers a view: e-grocery shopping is here to stay, while remote learning for primary grades could be headed for the dustbin of history. We devised a “stickiness” index (or, if we’re being academic, a gauge of behavior plasticity) to assess all the big shifts of 2020 (exhibit).

What behaviors will stick and what will not differ by sector and geography, but overall we find e-grocery is the most sticky and remote education the least.
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This week, we spoke with two prominent executives about what’s stuck with them from their pandemic experience. Chris Kempczinski, CEO of McDonald’s, spoke with senior partner Greg Kelly about how the company has worked hard to stay relevant. For a restaurant chain in the crisis, that means excelling at delivery; McDonald’s expanded the number of its locations offering delivery to more than 30,000. Leena Nair, chief human-resources officer of Unilever, shared her strategies for caring about 150,000 employees with senior partner Mary Meaney and executive editor Astrid Sandoval. For those in the workforce wondering when 2020’s pace of work might relent, here’s one encouraging sign: Nair says, “This speed is unsustainable.”

Also this week, our industry researchers examined the potential for Vietnam to rebuild tourism, the ecosystem opportunity for mobility companies, and the pleasant surprises B2B companies have discovered as they adapted to online sales.

Finally, in the pandemic, many of us have spent more time with our children than we used to, and we’ve learned from them. In our new edition of McKinsey for Kids, we attempt to return the favor by taking a look at the food distribution system and food waste. Please share it with your young people, and let us know what they think.

Business leaders crave new perspectives. Check out our series of Author Talks, which features the writers of the best new business books. This week’s additions to the series include Gregory B. Fairchild on the next frontier in racial equality and Nicolai Tillisch on how to frame ambition (and not let it frame you). For more perspectives, please see the full collection of our coronavirus-related content, visual insights from our “chart of the day,” a curated collection of our first 100 articles related to the coronavirus, our suite of tools to help leaders respond to the pandemic, and how our editors choose images that help readers visualize the impact of an invisible threat.


This briefing note was edited by Mark Staples, an executive editor in the New York office.




COVID-19: Briefing note #46, March 17, 2021

In 2020, consumer goods and retail were shaken. What will it take to return to stirring performance?

The future usually arrives in an orderly fashion. But for consumer goods and retail, a year like no other meant that the future showed up early, and in an ugly mood. In March 2020, COVID-19 shut down retail locations across the world, forcing consumers to change their buying behaviors, and as a consequence, these two sectors may never be the same again.

Two new reports look at the changes wrought by COVID-19 in the United States and assess their long-term effects. In consumer goods, we examine four effects on demand and costs. Demand has proved highly variable and may remain so for some time; company performance has been all over the map, even within the same category; growth soared in 2020, and large companies captured a big chunk of it (exhibit); and most costs will likely remain higher in 2021.

Due to an advantage in product availability—the main reason consumers switched brands—large companies had the highest absolute growth in 2020.
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In retail, our research with the Retail Industry Leaders Association finds that success in a post-COVID-19 world will require hastened progress on four long-standing imperatives and three new strategies that will be increasingly critical in coming years. Consider one of the older yet still fundamental challenges: the shift to omnichannel, led by digital shopping. Our survey reveals that 65 percent of retailers base decisions about their store network on brick-and-mortar performance, without considering how changes might affect omnichannel. In a world where consumers pick their retailers based on digital offerings, that’s a recipe for irrelevance.

This week, the McKinsey Global Survey returned for its annual look at IT strategy. The pandemic made clear that the technology imperative is stronger than ever. One key finding: more than half of respondents said that technology transformations have lifted revenues, reduced costs, and improved employee experiences in the past two years.

Finally this week, new research in operations finds that “lighthouses”—leading-edge manufacturing sites—are demonstrating that the benefits of an infusion of digital can go beyond mere productivity to create a higher base for future growth. A new report from our organizational researchers examines how HR can build the organization of the future; our corporate-finance experts look at the state of corporate restructuring in Europe; and The McKinsey Podcast talks through what it will take to build a more resilient and responsive government.

With vaccinations underway, executives everywhere are thinking about the critical next months of the pandemic. Start with the McKinsey Download Hub to find McKinsey’s latest research, perspectives, and insights on the management issues that matter most, from leading through the COVID-19 crisis to managing risk and digitizing operations. Also consider our special collection of reports on the next normal, which are a product of Our New Future, a multimedia series we created with CNBC. Our report collection includes a 172-page report on technology and data transformation, a 130-page report on the path to true transformation, a 206-page report on reimagining the postpandemic organization, a 157-page report on the challenge of climate change, and a 202-page report on reimagining operational resilience.

You can also see the full collection of our coronavirus-related content, visual insights from our “chart of the day,” a curated collection of our first 100 articles related to the coronavirus, our suite of tools to help leaders respond to the pandemic, and how our editors choose images that help readers visualize the impact of an invisible threat.


This briefing note was edited by Mark Staples, an executive editor in the New York office.




COVID-19: Briefing note #45, March 10, 2021

After a year of COVID-19, women in the workplace want out, and companies seek growth in all directions.

Here’s one of the more intriguing statistics from last year’s Women in the Workplace research: 77 percent of men think they share the load at home equally with their partners, while just 40 percent of women agree. Sounds like the guys have some “splainin” to do. Given that imbalance, and the enormous burden (three hours a day, or more) that COVID-19 has added to women’s workload, it may be less surprising that one-quarter of women in corporate America are thinking about leaving. Senior partners Alexis Krivkovich and Lareina Yee dig into the details, in the latest edition of The McKinsey Podcast. And our salute to International Women’s Day charts the impact to date and hints at the way forward.

This week, McKinsey’s Inside the Strategy Room podcast looked at a different kind of exit: the shift that companies need to make as COVID-19 fades and the next normal takes hold. Senior partner Martin Hirt and partner Anna Koivuniemi explain how, with all signs pointing toward a significant, possibly historic economic rebound, companies need to pull out all the stops. Our research shows that outperformers seek growth in every dimension: core expansion, geographic, up and down the value chain, and in adjacent spaces.

Regarding that rebound: stock markets seem to have embraced the possibilities. Our latest capital-markets research reviews the four acts of the 2020 stock-market drama (interactive). What comes next is anybody’s guess. But the “Mega 25,” which reeled in 40 percent of total public market gains in 2020, will have much to say about future developments.

Interactive

Also this week, our industry researchers investigated the potential for incumbent telcos to unleash digital attackers and surveyed consumers on all things mobility: autos, both gas and electric powered; trucks; and autonomous vehicles.

With vaccinations underway, executives everywhere are thinking about the critical next months of the pandemic. Start with the McKinsey Download Hub to find McKinsey’s latest research, perspectives, and insights on the management issues that matter most, from leading through the COVID-19 crisis to managing risk and digitizing operations. Also consider our special collection of reports on the next normal, which are a product of Our New Future, a multimedia series we created with CNBC. Our report collection includes a 172-page report on technology and data transformation, a 130-page report on the path to true transformation, a 206-page report on reimagining the postpandemic organization, a 157-page report on the challenge of climate change, and a 202-page report on reimagining operational resilience.

You can also see the full collection of our coronavirus-related content, visual insights from our “chart of the day,” a curated collection of our first 100 articles related to the coronavirus, our suite of tools to help leaders respond to the pandemic, and how our editors choose images that help readers visualize the impact of an invisible threat.


This briefing note was edited by Mark Staples, an executive editor in the New York office.




COVID-19: Briefing note #44, March 3, 2021

This week in McKinsey research: online learning has underwhelmed. Vaccine development, however, is on pace for a surprising milestone.

Although teachers around the world have different styles and standards for learning, there is one thing on which they seem to agree: a computer is no match for a classroom as a place for kids to learn. We asked teachers in eight countries to rate the effectiveness of remote learning between March and July of 2020. They gave it an average score of five out of ten (Exhibit 1). The grades were especially harsh from teachers in Japan and the United States, where nearly 60 percent rated the effectiveness of remote learning at between one and three out of ten. That barely beats skipping school altogether. While the quality and support systems around remote learning have likely improved since then, this is still a striking indictment.

As classes went online, teachers saw the effectiveness of instruction decline.
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Reopening schools depends in part on COVID-19-vaccine development, manufacturing, and distribution. In our estimate, if all clinical trials succeed, and if manufacturing commitments to scale up production hold true, more than 14 billion doses could be produced by the end of the year (Exhibit 2). Since most vaccines require two shots, that’s enough to vaccinate nearly 80 percent of the global population.

Public announcements indicate target global vaccine-manufacturing capacity of more than 14 billion doses by end of 2021.
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That said, there’s a lot of green between the ball and the pocket: new variants of concern have emerged; not all populations have equitable access to supplies; and technology transfer at the required scale is complex and far from assured.

These challenges also worry business leaders seeking the next normal. We recently surveyed 300 European senior executives to understand their strategy during COVID-19 and find out what was working best. One critical finding was that business-model innovation was by far the most important strategic lever. Almost 90 percent of the successful companies said that new digital experiences, new partnerships, faster product development, and other changes to the business model had made them more effective.

This week, our diversity and inclusion researchers produced two new reports. In the first, we consider the Black experience in the US private sector, which we hope serves to highlight the scale of the issues facing Black workers and leads to better understanding of the challenges they face, thereby galvanizing action for system-level change and better and scaled solutions. In the second, we look closely at private equity, in which gender and racial diversity are stronger in entry-level positions than in more senior roles. One idea for asset managers to consider: diversity assessments of investment targets, to assess risk and to understand the value-creation opportunity from improving diversity, equity, and inclusion.

Finally, the new edition of the Five Fifty looks at healthcare, where ten promising innovations might speed effective responses to future pandemics and health crises.

With vaccinations underway, executives everywhere are thinking about the critical next months of the pandemic. Start with the McKinsey Download Hub to find McKinsey’s latest research, perspectives, and insights on the management issues that matter most, from leading through the COVID-19 crisis to managing risk and digitizing operations. Also consider our special collection of reports on the next normal, which are a product of Our New Future, a multimedia series we created with CNBC. Our report collection includes a 172-page report on technology and data transformation, a 130-page report on the path to true transformation, a 206-page report on reimagining the postpandemic organization, a 157-page report on the challenge of climate change, and a 202-page report on reimagining operational resilience.

You can also see the full collection of our coronavirus-related content, visual insights from our “chart of the day,” a curated collection of our first 100 articles related to the coronavirus, our suite of tools to help leaders respond to the pandemic, and how our editors choose images that help readers visualize the impact of an invisible threat.


This briefing note was edited by Mark Staples, an executive editor in the New York office.




COVID-19: Briefing note #43, February 19, 2021

The pandemic has hit America hard. Our new #America2021 series looks at how the country can recover.

The US presidential transition is always a time for the country to reflect and reset. The 2021 transition is much more than that; given the once-in-a-century pandemic, it is a watershed moment. This week, we published a series of five memos offering our latest perspectives on four issues confronting the country and how public- and private-sector leaders could organize to drive change on them.

Defeat COVID-19. Will 2021 be the year in which the United States gains a decisive upper hand in its fight against the pandemic? We argue that it is reasonable to hope that the first half of the year could be a bridge to “normalcy,” when many aspects of social and economic life can resume without fear of excess mortality. This memo condenses the recent history of the COVID-19 crisis into must-see charts and sets out six considerations for those building bridges to normalcy.

Rebuild the economy. For America’s leaders, innovators, and changemakers, the post–World War II recovery offers valuable lessons for encouraging productivity, innovation, and social-capital creation in a post-COVID-19 future. Global managing partner Kevin Sneader and senior partner Shubham Singhal explore the good policies, political commitment, and hard work that will be needed to replicate those successes.

Advance racial equity. Repairing the frayed social fabric in the United States is not a new problem. But as the civil unrest of 2020 showed, it has become increasingly urgent. Our experts contribute ideas for inclusive growth for all races and the impact, in particular, of higher Black participation in different roles in the economy—a goal that the pandemic has set back.

Commit to climate action. The global transition to a low-carbon economy is well underway. In the United States, 23 states have established emission-reduction goals, and 12 have instituted carbon-pricing policies. Making good on those intentions will require new information, products, operations, and market innovations from public officials and business leaders. Our experts bring the best of McKinsey’s decades of research to the task.

Organize for change. To make all this happen, public-sector leaders will need to move swiftly and decisively, bringing the whole of government to bear across all four priorities, even as they revitalize a federal workforce with plummeting morale and lack of trust in government leadership. In the final memo of the series, we distill the lessons from successful government-change programs in a set of tactical ideas for leaders to consider.

Also this week, the McKinsey Global Institute published the first of three reports that examine the postpandemic economy. In The future of work after COVID-19, we assess the lasting impact of the pandemic on labor demand, the mix of occupations, and the workforce skills required in eight countries with diverse economic and labor-market models: China, France, Germany, India, Japan, Spain, the United Kingdom, and the United States. Our research concludes that because of the pandemic, up to 25 percent more workers than previously estimated may need to switch occupations.

With vaccinations underway, executives everywhere are thinking about the critical next months of the pandemic. Start with the McKinsey Download Hub to find McKinsey’s latest research, perspectives, and insights on the management issues that matter most, from leading through the COVID-19 crisis to managing risk and digitizing operations. Also consider our special collection of reports on the next normal, which are a product of Our New Future, a multimedia series we created with CNBC. Our report collection includes a 172-page report on technology and data transformation, a 130-page report on the path to true transformation, a 206-page report on reimagining the postpandemic organization, a 157-page report on the challenge of climate change, and a 202-page report on reimagining operational resilience.

You can also see the full collection of our coronavirus-related content, visual insights from our “chart of the day,” a curated collection of our first 100 articles related to the coronavirus, our suite of tools to help leaders respond to the pandemic, and how our editors choose images that help readers visualize the impact of an invisible threat.


This briefing note was edited by Mark Staples, an executive editor in the New York office.




COVID-19: Briefing note #42, February 10, 2021

From lab to jab: How will the world ship vaccine doses to those in need? Our latest logistics research takes a look.

More than 12 billion vaccine doses have been announced by manufacturers for release in 2021, subject to successful clinical trials. The earth’s population is 7.8 billion. Coverage for a first dose seems adequate, until you consider the logistics. Manufacturing is concentrated in a handful of countries; regions without manufacturing must import the vaccine (exhibit).

Our projections of intercontinental flows show that Asia (excluding India and China) and Africa will be the biggest recipients of COVID-19 vaccines.
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Our new research looks into the considerable obstacles blocking these flows, including the need for ultracold supply chains, lack of air-cargo capacity, and counterfeiting. What’s needed is collective action on an unprecedented scale among manufacturers, governments, customs authorities, and others.

Some countries, such as the United Kingdom, are equipped with adequate vaccine manufacturing to meet domestic needs. But the United Kingdom faces other problems, such as the plight of small and medium-size businesses, which we described in June 2020. Our update shows that on many measures, life is getting better for these companies. But many are still dependent on government support, and anxious about what comes next.

Companies everywhere are reckoning with the first-order effects of the pandemic and trying to anticipate those of the second order. In this week’s episode of the McKinsey Talks Talent podcast, our experts help you get out in front of the changes in middle management. Faster, flatter, leaner: companies have been trying for decades to thin their ranks. But amid the challenges of the pandemic, middle managers can still make valuable contributions, in new ways.

Stock markets seem to have established their own form of herd immunity. This week, marking the 50th anniversary of Nasdaq, senior partner Vijay D’Silva and executive editor Roberta Fusaro spoke with Nasdaq CEO Adena Friedman about how markets are staying relevant, and partner Tim Koller weighed in on how markets should be more inclusive, share more information, inspire innovation, and bring the world together.

Also new this week, we explored the nine traits of future-ready companies, tracked down a winning formula for specialty chemical companies, and spoke with the new CEO of NXP Semiconductors.

Finally, we conclude Our New Future, a series of management discussions in partnership with CNBC; our final topic is the need for resiliency. Senior partner Katy George leads the discussion, joined by Arvind Krishna, CEO of IBM. One essential insight: resiliency isn’t a lever to be pulled; rather, it’s a combination of actions, technologies, and strategies that companies work on every day.

With vaccinations underway, executives everywhere are thinking about the critical next months of the pandemic. Start with the McKinsey Download Hub to find McKinsey’s latest research, perspectives, and insights on the management issues that matter most, from leading through the COVID-19 crisis to managing risk and digitizing operations. Also consider our special collection of reports on the next normal, which are a product of Our New Future, a multimedia series we created with CNBC. Our report collection includes a 172-page report on technology and data transformation, a 130-page report on the path to true transformation, a 206-page report on reimagining the postpandemic organization, a 157-page report on the challenge of climate change, and a 202-page report on reimagining operational resilience.

You can also see the full collection of our coronavirus-related content, visual insights from our “chart of the day,” a curated collection of our first 100 articles related to the coronavirus, our suite of tools to help leaders respond to the pandemic, and how our editors choose images that help readers visualize the impact of an invisible threat.


This briefing note was edited by Mark Staples, an executive editor in the New York office.




COVID-19: Briefing note #41, February 3, 2021

Executives still feel positive about the economy, advanced industrial companies are plotting their exit from the pandemic, and more.

The pandemic continues to dominate global economic sentiment. In our newest McKinsey Global Survey of more than a thousand executives from all industries, the outlook is still positive, though not quite as strong as in early December 2020 (exhibit). Majorities of executives continue to believe that conditions in their home economies and in the global economy will improve over the next six months.

Executives maintain a positive outlook on the economy, though their views have tempered.
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We also ask leaders about their home countries. The story there is mixed. Sentiment in India is up and is nearly as positive as it is in China. But in Asia–Pacific and Europe, the share of executives that is optimistic fell by double digits. And in Latin America, just 30 percent are optimistic, the lowest figure globally.

Advanced industrials companies are among the world’s largest—and those most affected by the pandemic. Worldwide, these firms (including advanced electronics, aerospace and defense, and automotive and assembly companies) employ almost 25 million people and generate about $9.3 trillion in annual revenue. The crisis has hurt sales, margins, and growth. In our new comprehensive report, we outline ten actions that industrials can take to undo the damage and pivot to a postcrisis future. Among the ideas: take advantage of the stunning developments in e-commerce. Companies that embed digital sales into their marketing models see five-times-faster revenue growth compared with previous levels, as well as 30 percent higher acquisition efficiency and cost reductions of 40 to 60 percent within sales.

Our researchers continue to track the long-running crisis of our time: climate change. In a new report, we address the potential for voluntary carbon markets. Some companies need carbon credits to offset emissions they can’t get rid of by other means. Others might have credits to sell. But carbon markets have a mixed track record. To build a better one, buyers, sellers, and a few other stakeholders need to come together. Our research for the Taskforce on Scaling Voluntary Carbon Markets, led by Mark Carney and Bill Winters, explains what’s needed. And in this week’s edition of the McKinsey Podcast, McKinsey experts discuss what can be done to truly decarbonize global business at scale.

Also new this week, we outline a new portfolio model for biotech; consider the potential for “smart quality” assurance in pharmaceuticals; and share tips for government leaders to unlock diversity and inclusion. Finally, we are pleased to speak with Richard N. Haass, president of the Council on Foreign Relations, about his new book The World: A Brief Introduction (Penguin Press, May 2020), in the latest installment of Author Talks.

With vaccinations underway, executives everywhere are thinking about the critical next months of the pandemic. Start with the McKinsey Download Hub to find McKinsey’s latest research, perspectives, and insights on the management issues that matter most, from leading through the COVID-19 crisis to managing risk and digitizing operations. Also consider our special collection The Next Normal: The Recovery Will Be Digital. The first four installments—a 172-page report on technology and data transformation, a 130-page report on the path to true transformation, a 206-page report on reimagining the postpandemic organization, and a 157-page report on the challenge of climate change—are available now. The final installment is coming as part of Our New Future, a multimedia series we created with CNBC.

You can also see the full collection of our coronavirus-related content, visual insights from our “chart of the day,” a curated collection of our first 100 articles related to the coronavirus, our suite of tools to help leaders respond to the pandemic, and how our editors choose images that help readers visualize the impact of an invisible threat.


This briefing note was edited by Mark Staples, an executive editor in the New York office.




COVID-19 and the great reset: Briefing note #40, January 27, 2021

Vaccine rollout has run into problems. Our new research explores where and why.

McKinsey research intently continues to examine the progress of SARS-CoV-2 vaccine development and distribution. Last week, we updated our series on the end of the pandemic to consider the emergence of new strains of the virus and a slow start to vaccine rollout. Both represent serious threats to the timetable. This week, we looked more closely at the problems in vaccine distribution. We start by mapping the operating path, from raw materials to post-vaccination care (interactive). At every step, risks and challenges are emerging. But so too are collaborative approaches that can help countries achieve herd immunity.

Interactive

The pandemic has been a tough, real-life stress test for government disbursement schemes, highlighting not only opportunities but also gaps and vulnerabilities. Our new research across 12 countries shows both. One key finding: getting aid to those who need it is greatly bolstered by digital payment channels, a basic digital identification system used by most people, and simple data on individuals and businesses that are tethered to that digital ID.

Gone but not forgotten: in the crisis, global CO2 emissions briefly plunged, then resumed. Today, as economies rebuild, the climate challenge is again top of mind. For a new report published this week, we teamed up with the World Economic Forum (WEF) to examine natural climate solutions. Simply put, these are techniques to increase carbon storage and avoid emissions—through better conservation, restoration, and management of our priceless natural resources. There is no clear path to mitigate the damaging effects of climate change that doesn’t include natural climate solutions. The case is complete when you consider the urgent need to slow the destruction of the natural world. (We’re also collaborating with WEF on the Davos Agenda, the first of two events being held in place of its usual annual meeting.)

Also this week, we looked at procurement in the next normal, the greatly exaggerated rumor of the death of the vending machine in Japan, the dramatic shifts in sporting goods over the past year, and the rising value of industrial brands.

With vaccinations underway, executives everywhere are thinking about the critical next months of the pandemic. Start with the McKinsey Download Hub to find McKinsey’s latest research, perspectives, and insights on the management issues that matter most, from leading through the COVID-19 crisis to managing risk and digitizing operations. Also consider our special collection The Next Normal: The Recovery Will Be Digital. The first four installments—a 172-page report on technology and data transformation, a 130-page report on the path to true transformation, a 206-page report on reimagining the postpandemic organization, and a 157-page report on the challenge of climate change—are available now. The final installment is coming as part of Our New Future, a multimedia series we created with CNBC.

You can also see the full collection of our coronavirus-related content, visual insights from our “chart of the day,” a curated collection of our first 100 articles related to the coronavirus, our suite of tools to help leaders respond to the pandemic, and how our editors choose images that help readers visualize the impact of an invisible threat.


This briefing note was edited by Mark Staples, an executive editor in the New York office.




COVID-19 and the great reset: Briefing note #39, January 20, 2021

Asia is at an inflection point. New research looks at developments in industrial technology, renewables, travel, ASEAN’s vast human capital, and China’s education system.

In 2020, the largest health and economic crisis in recent history forced companies across sectors into extraordinary measures to protect their people and maintain operations. Did the technologies of the ongoing Fourth Industrial Revolution (or Industry 4.0) help? Our new survey of industrial companies (two-thirds in Asia) suggests three outcomes, starting with a huge win for companies that had already scaled digital technologies (exhibit). Those that were still scaling faced a reality check, and 2020 was a wake-up call for those that hadn’t yet started on their Industry 4.0 journeys.

Companies whose Industry 4.0 implementation is more mature reported a stronger ability to respond to the COVID-19 crisis.
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Other technologies are also changing life in Asia. While coal is expected to remain a significant component of India’s energy mix, the country is placing big bets on renewable power, which could make up nearly half of the global total electricity capacity by 2035. Among the biggest believers is Sumant Sinha of ReNew Power. Our interview explores why renewables are different in Asia.

Our 2020 research offered a perspective on the coming rebound in travel: how far, how fast, and where. Now, in an interview with McKinsey, the president of online travel unicorn Traveloka explains the nuts and bolts of the rebound. The critical moves for this company? Giving a thousand employee-volunteers the tools they needed to help customers with more than 150,000 refund requests; extending credit to strapped customers who were having trouble saving for their big trip; and thinking about the local market beyond the big beach destinations popular with international tourists.

For many people, those beaches are a major part of the allure of ASEAN countries, along with sunshine, great food, and history. But as our recent research shows, there is more to ASEAN than just that, and now is a good time to rethink ASEAN and its 650 million people, $3 trillion economy, ten countries, and history of robust growth: 5 percent over the past 20-plus years. In the latest Future of Asia Podcast, our experts delve into the question of whether ASEAN can maintain that track record after the difficult challenges of COVID-19. Short answer: yes, if the region can harness its extraordinary resources.

Across Asia, and the world, work is changing as digitization and automation spread. Hundreds of millions of people may need to raise and refresh their skills; some may need to change occupations. Up to one-third of these transitions may be needed in China. If China gets this right, it could establish a helpful reference point to other economies. The McKinsey Global Institute’s new report looks at the skills revolution that the country needs to keep raising its standard of living.

Also this week, our researchers looked at scenario-based cash planning, the next wave of M&A in advanced industries, lessons from the fastest growing companies in logistics, and the potential for digital and analytics in steel.

With vaccinations underway, executives everywhere are thinking about the critical next months of the pandemic. Start with the McKinsey Download Hub to find McKinsey’s latest research, perspectives, and insights on the management issues that matter most, from leading through the COVID-19 crisis to managing risk and digitizing operations. Also consider our special collection The Next Normal: The Recovery Will Be Digital. The first four installments—a 172-page report on technology and data transformation, a 130-page report on the path to true transformation, a 206-page report on reimagining the postpandemic organization, and a 157-page report on the challenge of climate change—are available now. The final installment is coming as part of Our New Future, a multimedia series we created with CNBC.

You can also see the full collection of our coronavirus-related content, visual insights from our “chart of the day,” a curated collection of our first 100 articles related to the coronavirus, our suite of tools to help leaders respond to the pandemic, and how our editors choose images that help readers visualize the impact of an invisible threat.


This briefing note was edited by Mark Staples, an executive editor in the New York office.




COVID-19 and the great reset: Briefing note #38, January 13, 2021

The COVID-19 crisis wrenched energy demand from its growth trajectory and workers from their cubicles. What happens next?

For a time in 2020, we stopped driving, flying, commuting. And we stopped buying the fuel needed to do these things. Today, even as economies have restarted, fuel demand remains subdued. McKinsey’s Global Energy Perspective 2021, an annual report, analyzes the ways in which the COVID-19 pandemic has permanently shifted energy-demand curves. Demand is likely to return to 2019 levels within one to four years, with electricity and gas rebounding fastest (Exhibit 1). But we do not foresee a return to the previous trajectory of growth in demand.

Exhibit 1

In the longer term, the energy transition—already underway before 2020—will accelerate. Power consumption doubles by 2050 as energy demand electrifies, wealth increases, and green hydrogen picks up momentum. Oil demand peaks in 2029; gas, in 2037. But fossil fuels continue to play a major role in the energy system in 2050. Our reference-case modeling helps you understand all the twists and turns.

With workforces now located in kitchens, basements, and attics, what will happen to all those sleek urban office towers and their glossy suburban counterparts? The answer has to start with their current tenants. Our latest survey of CXOs, which focused on the corporate center, finds that most companies are intensely debating the issues raised by COVID-19’s work-from-home experiment, and many companies are planning substantial shifts in the next three to nine months (Exhibit 2). In the short term, 70 percent of corporate-center executives plan to reconfigure office space, as do 54 percent of business-unit leaders. Over the midterm, 30 percent of corporate centers want to terminate existing leases early, compared with 14 percent of business units. Finally, as they look to the longer term, 55 percent of corporate centers plan to shift toward fewer and lower-cost locations. Business heads showed more willingness to stay put.

Corporate centers are planning a more radical optimization of office space.
We strive to provide individuals with disabilities equal access to our website. If you would like information about this content we will be happy to work with you. Please email us at: McKinsey_Website_Accessibility@mckinsey.com

In a crisis, it’s all hands on deck. Bank tellers are becoming financial advisors; fresh-faced managers are leading enormous projects; and companies are intently searching for people with the aptitude to become data analysts and mobile web designers. In this month’s edition of the McKinsey Quarterly Five Fifty, we document the trend underpinning it all: reskilling.

Also this week, we researched the long-term effects of the pandemic on biopharma, explained the nine keys to becoming a future-ready company, and considered the long-run implications of 2020 on cybersecurity in Latin America.

Executives everywhere are thinking about the critical next months of the pandemic. Start with the McKinsey Download Hub to find McKinsey’s latest research, perspectives, and insights on the management issues that matter most, from leading through the COVID-19 crisis to managing risk and digitizing operations. Also consider our special collection The Next Normal: The Recovery Will Be Digital. The first four installments—a 172-page report on technology and data transformation, a 130-page report on the path to true transformation, a 206-page report on reimagining the postpandemic organization, and a 157-page report on the challenge of climate change—are available now. The final installment is coming as part of Our New Future, a multimedia series we created with CNBC.

You can also see the full collection of our coronavirus-related content, visual insights from our “chart of the day,” a curated collection of our first 100 articles related to the coronavirus, our suite of tools to help leaders respond to the pandemic, and how our editors choose images that help readers visualize the impact of an invisible threat.


This briefing note was edited by Mark Staples, an executive editor in the New York office.




COVID-19 and the great reset: Briefing note #37, January 6, 2021

One year ends, another begins. From disruption to transition, McKinsey research traces the pandemic’s arc.

One way or another, 2021 is likely to be the year when the world transitions to the next normal. As executives take stock of what’s just happened, and what’s to come, they won’t go far wrong by considering the ten trends that authors Kevin Sneader and Shubham Singhal analyzed and the effects of those trends on the global economy, business, and society. First up in the next normal: “revenge shopping” as many consumers open their wallets for goods and services they’ve done without recently. Other trends to ponder—none traditionally associated with recessions—include startling growth in the number of new businesses, an incredible rise in productivity, permanent changes in consumer behavior, and the “bio revolution,” which may soon create different mechanisms of production for 60 percent of the global economy’s physical inputs. One thing’s for sure: 2022 won’t look anything like 2019.

Our recent survey of global executives focused on the here and now: even in the short term, optimism is growing. Our December 2020 survey of global executives detected the highest levels of optimism since the COVID-19 pandemic began (exhibit). Executives in Europe, North America, and developing markets report concerns more acute than others did; those in Europe, for example, remain especially worried about unemployment. But even these respondents are less downbeat than they were in the previous quarter. Looking ahead, the respondents’ expectations for their home economies are increasingly positive: 61 percent say global economic conditions will be better six months from now, up from 51 percent in mid-October.

Respondents’ outlook for the global economy has again improved, after peaks and valleys in recent survey results.
We strive to provide individuals with disabilities equal access to our website. If you would like information about this content we will be happy to work with you. Please email us at: McKinsey_Website_Accessibility@mckinsey.com

The United States is the global economy’s linchpin; it’s no surprise that the rollout of COVID-19 vaccines there is under intense scrutiny. Our latest research details five challenges to at-scale vaccine adoption. Chief among these: consumer skepticism. According to our most recent US consumer research, 63 percent of respondents are cautious about the vaccines or unlikely to be vaccinated. The antidote? Conviction, convenience, and costlessness. If the 100 million Americans who are uncertain about the COVID-19 vaccine can be brought around through a combination of education, easy access, and affordability, the benefits will be enormous. We estimate that new investment of about $12 billion, in addition to current programs, could bring forward the pandemic’s end by three to six months and generate an additional $800 billion to $1.2 trillion in US GDP.

Also this week, our industry researchers examined four topics: consumers’ uptake of US fintech offerings, the resilience imperative for medtech supply chains, B2B sales in Brazil, and the future of insurance in Africa.

Finally, we closed the books on 2020 by offering three summaries of a difficult, often desperate, and, yes, disruptive year: highlights of our publishing, including our top ten, insights from the McKinsey Quarterly and the McKinsey Global Institute, and editors’ picks; a tale of 2020 in 20 McKinsey charts; and, similarly, the 20 photos and illustrations that helped us tell the visual story of a remarkable time. Thank you for reading, and best wishes for a better new year.

Executives everywhere are thinking about the critical next months of the pandemic. Start with the McKinsey Download Hub to find McKinsey’s latest research, perspectives, and insights on the management issues that matter most, from leading through the COVID-19 crisis to managing risk and digitizing operations. Also consider our special collection The Next Normal: The Recovery Will Be Digital. The first four installments—a 172-page report on technology and data transformation, a 130-page report on the path to true transformation, a 206-page report on reimagining the postpandemic organization, and a 157-page report on the challenge of climate change—are available now. The final installment is coming as part of Our New Future, a multimedia series we created with CNBC.

You can also see the full collection of our coronavirus-related content, visual insights from our “chart of the day,” a curated collection of our first 100 articles related to the coronavirus, our suite of tools to help leaders respond to the pandemic, and how our editors choose images that help readers visualize the impact of an invisible threat.


This briefing note was edited by Mark Staples, an executive editor in the New York office.


For McKinsey’s 2020 perspectives on the business impact of COVID-19, visit our archive of several dozen briefing notes published throughout the year.

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