Insights to Impact

ON CREATING SUSTAINABLE AND INCLUSIVE GROWTH

Brought to you by Sven Smit, chair of insights and ecosystems and of the McKinsey Global Institute, & Tracy Francis, chief marketing officer

Welcome to Insights to Impact, a new McKinsey newsletter delivering a weekly roundup of analysis that’s influencing decision makers. Each Friday, we’ll offer insights across geographies, industries, and capabilities to help leaders identify new opportunities to spur innovation and growth, sustainably.

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This week’s headline findings

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McKinsey’s Global Banking Annual Review 2023 tracks a significant transition, in which the world’s financial funds are shifting away from banking’s balance sheets.

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Europe has a unique opportunity to capitalize on the transformative power of generative AI.

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Shifting technology trends are forcing telecom companies to reassess how they attract and retain tech talent.

Do these insights resonate with you? What else should we be writing about now? Tell us by emailing insightstoimpact@mckinsey.com.

Rising interest rates have boosted global banking profits, giving the sector its best results since 2007. But a “great banking transition” is under way: transactions and balance sheets are drifting toward other types of institutions—including digital-payments specialists and alternative-asset-management firms. In this year’s Global Banking Annual Review, senior partners Miklós Dietz, Alexander Edlich, Asheet Mehta, Eckart Windhagen, and coauthors outline five priorities for financial institutions hoping to future-proof themselves. Among the authors’ suggestions: develop distinctive technology, elevate risk functions (which could have a broader role to play in a fast-changing environment), and either scale or exit the transaction business.

Europe’s regional attributes create unique opportunities and challenges as organizations increasingly look to make the most of generative AI (gen AI), say senior partners Holger Harreis, Gökhan Sari, Alexander Sukharevsky, and coauthors. For example, Europe’s multiple languages and cultures and complex regulatory environment could complicate the use of gen AI, but these same characteristics might also offer local players a home field advantage.

Telecom companies might once have been the employer of choice for tech talent, but fiercer competition for STEM graduates is making hiring more difficult, even as telcos’ demand for tech talent increases. Tech trends shaping the industry—including AI and quantum technology—make attracting, cultivating, and retaining tech talent more important than ever. Senior partner Tomás Lajous and coauthors outline a three-phase telco talent approach: identify the talent implications of the business strategy, assess talent gaps and define priorities, and design a tech talent operating model.

OTHER FINDINGS OF NOTE

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Partners Rajesh Krishnan, Zachary Silverman, Dominic Skerritt, and coauthor highlight survey results suggesting that four elements underlie successful organizational transformations: will, skill, rigor, and scope.

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Senior partner Liz Hilton Segel interviews Lila Snyder, the CEO of Bose. Snyder says organizational transformation requires finding people who have “the gene for change.”

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Senior partner Jeffrey Algazy and coauthors encourage medical affairs teams at pharmaceutical companies to focus on five priorities, including integrating end-to-end data into decision making and developing differentiated medical strategies.

WHAT WE’RE READING

The case study collection Rewired in Action illuminates companies that have launched digital transformations to build value. Supported by technical and industry expertise from McKinsey, these organizations have changed their trajectories through the integration of digital and AI.

A recent edition of Author Talks features BBC journalist Ros Atkins speaking about his new book, The Art of Explanation: How to Communicate with Clarity and Confidence (Wildfire, September 2023). Atkins says that good communication can flow from asking oneself, “Does this sound like me?”

In case you missed it

A report from the McKinsey Global Institute examines the potential for accelerated economic growth to simultaneously raise the world’s living standards and limit global warming. These twin goals are intertwined in complex ways: newly empowered populations might increasingly demand more emissions-intensive products and services, but these populations are also often most exposed to climate-related risks. McKinsey analysis suggests that the combined investment to close both empowerment and net-zero gaps could amount to 8 percent of global GDP annually over the next decade. Senior partners Kweilin Ellingrud, Tracy Francis, Sven Smit, Jonathan Woetzel, and coauthors say that businesses and the market economy could be capable of generating half these required resources through growth and innovation. The full report can be downloaded from McKinsey.com.

— Edited by Seth Stevenson, senior editor, New York

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