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McKinsey Quarterly 2016 Number 2: Overview and full issue

By Allen Webb

This issue of the Quarterly, available here as a PDF download, examines the economic dynamics of digital disruption, Pixar’s approach to continuous innovation, the future of performance management, and China’s e-commerce landscape.

Download the full issue of McKinsey Quarterly 2016 Number 2 (PDF–4.2MB).

Digital disruption is hitting every industry at varying speeds and intensity. Executives know this, and they also recognize that time is of the essence for incumbents seeking to transform digital from a threat into an opportunity. That urgency, though, sometimes gives rise to haphazard responses, such as the one described by McKinsey director Angus Dawson in a recent McKinsey Podcast:

I was having a conversation with a client a couple of weeks ago. They went through what they were describing as their digital strategy. Having explored it a bit with them, we ended up coming to an agreement that what they had wasn’t a digital strategy, it was a list of priorities for digitization. Explicitly, it was how are we going to reduce the cycle time in our end-to-end processes, how are we going to improve the customer experience and build new apps, and so forth. It was about how they digitize. It was not actually the choices they were making about a big disruptive economic force . . . The word “strategy” is used too loosely with digital to mean our priorities for digitization, not the choices we’re going to make in terms of where and how we compete. . . .

You can listen to the podcast with Angus and Martin Hirt, the global knowledge development leader for McKinsey’s Strategy Practice, on iTunes or McKinsey.com. And read about how to make those strategic choices in this issue’s cover story, where Angus, Martin, and their colleague Jay Scanlan lay out “The economic essentials of digital strategy.” To get strategic about digital, they say, we need to ground it in economics, starting with the fundamentals of supply and demand. The importance of those fundamentals is reinforced by new research from the McKinsey Global Institute, which shows that the economic impact of digital information flows is rapidly overtaking that of traditional trade in goods and services, and suggests several priorities for senior leaders seeking to exploit the resulting opportunities.

A powerful digital strategy, of course, is a necessary but not sufficient condition for success in the digital age. Truly being digital also requires transforming corporate operating models in a number of critical areas. For example, this issue of the Quarterly offers perspectives from McKinsey’s chief learning officer Nick van Dam and two colleagues on the shift underway toward a “blended” learning model that integrates digital platforms with personal engagement. You’ll find an article by three McKinsey HR experts on the role digital tools can play in upending our outdated, inefficient, and often frustrating systems for evaluating people and giving feedback on their performance. Digital communications platforms also have a powerful role to play in galvanizing support for change, say McKinsey’s Tessa Basford and Bill Schaninger in, “Winning hearts and minds in the 21st century.”

Integrating an effective digital strategy with a rational set of digital initiatives is a leadership challenge of the first order. “Leading in the digital age” offers wisdom on how to navigate from two seasoned business leaders and two academics. And who better than Ed Catmull, who cofounded and still leads Pixar, the company that created the world’s first computer-animated feature film, to inspire the digital leaders of tomorrow? Interviewing Catmull was a treat. His management approach, which emphasizes embracing messiness, sending subtle signals, and counteracting fear, is a valuable reminder that even in the most digital organizations, people make all the difference.

Download the full issue of McKinsey Quarterly 2016 Number 1 (PDF–4.2MB).

About the author(s)

Allen Webb is the editor in chief of McKinsey Quarterly and is based in McKinsey’s Seattle office.
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