Leaders: Do you know your company’s superpower?

In a McKinsey Live webinar, managing partners Liz Hilton Segel and Homayoun Hatami said that successful companies around the world are led by CEOs who have chosen to pursue a “superpower”—that is, one differentiating factor (or, at most, two) that separates the company from the competition. Such a superpower is an institutional capability—an integrated set of people, processes, and technology that creates value by helping the company consistently do something better than its competitors. It stems from the corporate strategy, is integral to the company and industry, and can give a company an enduring edge that makes it a winner.

For example, historically it is lean manufacturing for Toyota; for French luxury-goods company LVMH, it’s craftsmanship and the entrepreneurship of it brand leaders; for Disney, it’s creativity and customer experience. It could be a world-class analytics capability, supply-chain management, analytics-based pricing, scientific innovation, or employee autonomy, to name just a few.

Unlike a superhero, a company is neither born with a superpower nor able to magically acquire one overnight. Building a superpower that will determine company success takes time. It requires relentless focus and dedication, complex coordination, and strong momentum. To be successful, a CEO needs a vision and a C-Suite that embraces the journey to drive its execution.

The VECTOR approach is a framework that comprises the six elements needed to build a successful and sustainable institutional capability:

• Vision and leadership—A shared vision of the company’s successful future that usually starts with the company’s founder or CEO and is shared by the leadership team
• Employees—A complete and well-functioning system of people and talent
• Culture and mindset—An enterprise-wide mindset shift that thousands of employees internalize
• Technology—Includes good data, easy accessibility, modernized architecture, software, and, increasingly, generative AI, which could play a huge role by turbocharging* the superpower to maximize its benefit
• Organization—A structure and ways of operating with clearly defined roles and responsibilities, reporting structures, and decision rights
• Routines—High-quality, well-designed processes, along with outstanding employee coaching

McKinsey is building its own superpower: knowledge. It has an internal generative AI solution called Lilli, a platform that searches within and synthesizes the firm’s huge stores of knowledge. The resulting ability will allow McKinsey’s teams to serve the best insights more quickly and efficiently, with new levels of internal productivity.

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For more on this topic, read “What’s your superpower? How companies can build an institutional capability to achieve competitive advantage,” the blog post “Meet Lilli, our generative AI tool that’s a researcher, a time saver, and an inspiration,” the McKinsey report The economic potential of generative AI: The next productivity frontier, and the recently published book Rewired: The McKinsey Guide to Outcompeting in the Age of Digital and AI.