BRINGING OUR BEST INSIGHTS TO THE DAY’S NEWS
Click to get this newsletter once a week
Brought to you by Alex Panas, global leader of industries, & Becca Coggins, global leader of functional practices and growth platforms
Welcome to the latest edition of Only McKinsey Perspectives. We hope you find our insights useful. Let us know what you think at Alex_Panas@McKinsey.com and Becca_Coggins@McKinsey.com.
—Alex and Becca
In the news. Many retailers and brands are reluctant to embrace gen-AI-based storefronts, according to Adweek. Each major AI company has its own processes and platforms for shopping experiences, which means retailers would need to translate their catalogs into multiple formats—while also ceding control of their transaction data and how their products are displayed. This holiday season, most retailers are focusing on their core e-commerce platforms instead of gen AI experimentation, ad agencies report. But as AI’s role in the shopping experience evolves quickly, retailers that adopt these tools faster may gain a competitive edge. [Adweek]
On McKinsey.com. Agentic commerce, or shopping powered by AI agents, represents a seismic shift in the consumer experience. Agents could anticipate customers’ needs, navigate shopping options, negotiate deals, and execute transactions, transforming shopping in the process, write McKinsey Partners Katharina Schumacher and Roger Roberts and their coauthor. To reap the potential benefits, businesses across the commerce ecosystem—from brands and retailers to logistics companies and payment services—may need to adapt their operating models while minding the risks to consumer trust, data, and tech infrastructure. See how companies can prepare for the future of shopping.Explore the opportunities and risks of agentic commerce
In the news. Among the Nobel Prize winners feted at today’s ceremony are the economists behind the concept of “creative destruction” as a spur to economic growth. Philippe Aghion, Peter Howitt, and Joel Mokyr will share the economic sciences prize for their work on innovation’s role in generating growth over the past two centuries, notes The Wall Street Journal. Mokyr, who received half the prize, has studied the process of innovation that fueled the Industrial Revolution and created the conditions for steady growth ever since. Aghion and Howitt, who shared the other half, created mathematical models to explain how the broader economy benefits from technological progress, which can harm some businesses at the same time. [WSJ]On McKinsey.com. The most successful companies use innovation not only to expand their leads within their industries but also to disrupt new ones, say Senior Partners Marc de Jong and Matt Banholzer and their coauthors. Their research reinforces that the ability to innovate is a top source of competitive advantage across industries, especially in sectors undergoing significant disruption: energy, for example, where supply disruptions and large investments in sustainability require companies to evolve their businesses. What’s more, 14 of the 20 most profitable global companies accelerated their growth by making significant innovation investments in their core businesses or by creating entirely new markets outside their core—sometimes both.Innovate to grow
In the news. Multiple studies show that companies backed by private equity (PE) consistently deliver stronger returns faster and achieve much higher productivity gains than their publicly or family-owned peers. While PE-backed firms operate in a different context than other companies, Harvard Business Review notes that their methods—and successes—apply to businesses of all stripes. So, what can every company learn from private equity? The PE edge lies in six core practices, including continual due diligence to analyze the full potential of their businesses and building a management team that reflects how the company creates value. [HBR]On McKinsey.com. While operational improvements are crucial to a company’s ability to realize outsize returns, another important factor is strong CEO performance. If the CEO of a PE portfolio company lacks the right leadership capabilities, operational changes are less likely to be sustained or may never materialize, write McKinsey’s Kurt Strovink, Marla M. Capozzi, and Sacha Ghai. The authors note the increasing importance of leadership to EBITDA growth and value creation: In a survey of PE general partners, 94 percent said that portfolio company leadership contributed an average of 53 percent toward investment returns.Develop outperforming CEOs
—Edited by Joanna Pachner, executive editor, Toronto
Was this forwarded to you? Sign up here.
Or send us feedback—we’d love to hear from you.
Follow our thinking
McKinsey Insights - Get our latest thinking on your iPhone, iPad, or Android.
