This week, how businesses are emerging faster, smarter, and more resilient. Plus, four myths about building a software business, and reading picks from Claudy Jules, a McKinsey partner and expert on leadership and organizational health based in Washington, DC. |
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Sunny side up. Optimism about the global economy is growing. In the April McKinsey Global Survey on the economy, executives' views were as decidedly positive as they were in March, even as the pandemic continues to be an acute risk for India and other nations. Globally, 73 percent of respondents believe that conditions in the world economy will improve in the next six months—the largest share to say so all year. |
The ‘unleashing.’ In a recent conversation on the state of global business and the future of M&A, John Waldron, president and COO of Goldman Sachs, put it this way: “I think we are about to see an unleashing of the global economy, although it will be uneven and may benefit certain parts of the economy over others.” He added: “There is a real sense of optimism in the CEO community. The economy has proven to be much more resilient than many of us predicted in the spring and summer of 2020.” |
Sustainable speed. So what happens now, as businesses recover from COVID-19-related disruption? First, for companies to achieve long-term resilience—a broad tent that encompasses innovative leadership, building a learning culture, supply-chain upgrades, and digitization upskilling—they have to make sure that the adrenaline-fueled pace of the past year remains sustainable into the future. To do this, they must address the mental health of their workforce and the burnout many employees are feeling. They also have to ask fundamental questions about capacity, including what kind of demand shift they should expect and how they can reimagine capital allocation. Some leaders are already making strides in these areas. |
Watch the customer. On the consumer-demand front, the good news is that during the pandemic, many companies developed a deeper understanding of customer behavior through real-time and detailed consumer segmentation. What is still unclear is which services will return and in what form. Will pandemic preferences for home-based products, such as streaming and meal delivery, stick, or will consumers revert to their prepandemic habits? Stay tuned. |
Disruption junction. As companies have learned, most operations functions were not prepared to handle the shocks from the pandemic. But many have created great transparency into demand, supply chains, and production capabilities, helping them respond in real time to rapidly changing conditions. The goal is to go beyond the perennial challenge of cost efficiency and include resilience as a driver of operations-related decisions. Digitization and integration with stakeholders from end to end creates the foundation for growth. |
Building skills. Workforces have been heroic in the pandemic age, shifting on a dime to new ways of working. Businesses understand how important new skills are, and they're looking to address a skills gap that has been building since before the pandemic began. In our newest McKinsey Global Survey on reskilling, most respondents said that skill building (more than hiring, contracting, or redeploying employees) is the best way to close those gaps and that they have doubled down on their efforts. The results also point to a shift in the most important skills to develop, which tend to be social and emotional in nature: empathy, leadership, and adaptability. |
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OFF THE CHARTS |
Decision time for telcos |
Over the past decade, telecommunications companies have been under continuous pressure as their traditional value pools have eroded. The telco landscape of the next decade will be shaped by the extent to which today's leaders can recognize the magnitude of the disruption already underway—and act with speed and conviction to reimagine how their organizations can thrive in this new reality. |
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VIDEO |
Funny business |
Naomi Bagdonas and Connor Diemand-Yauman, lecturers at Stanford's Graduate School of Business, have fun exploring the intersection of humor, business, and leadership. “Humor is one of the most powerful forces an organization has for building genuine connection, well-being, and intellectual safety among our colleagues,” Bagdonas noted. Not to mention the fact that “laughing has unparalleled effects on our neurochemistry and behaviors,” Diemand-Yauman said. “It makes you more creative and resourceful and more resilient to stress.” That's no joke. |
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MORE ON MCKINSEY.COM |
Four myths about building a software business | Many companies now expect software products and digital solutions to contribute to sales directly or to underpin the competitive advantage of their business models. Here are four common pitfalls to avoid. |
A disconnect in mental-health needs | May is Mental Health Awareness month in the US, and surveys of the US workforce show that even as the pandemic's end may be in sight, employees continue to struggle, with many perceiving gaps in support. |
How companies capture the value of sustainability | What makes the difference between a sustainability program that produces business value and one that doesn't? A new survey identifies practices that distinguish value-creating companies from others. |
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WHAT WE'RE READING |
Claudy Jules |
Claudy Jules, a partner in McKinsey's Washington, DC, office, helps businesses, governments, and social-sector organizations with leadership and organizational health. He has particular expertise in high tech, media, telecom, and private equity. |
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One of my all-time favorite novels is Native Son by Richard Wright, who revealed to me that Black men can express their voice in powerful ways. The novel altered the conventional wisdom about the literary purview of Black writers. After last year's tragic killing of George Floyd, I found myself drawing parallels to the book's main character, Bigger Thomas, and the plight of Black men then and now. |
As a history lover, I recommend Kenneth T. Jackson's Crabgrass Frontier: The Suburbanization of the United States—a guided social and economic tour of how the American suburbs developed. Jackson delves into how the steamboat allowed the first suburbanites to commute by ferry and experience the glories of the American lawn; he also discusses the darker side of suburban sprawl and segregation. |
I also enjoyed Team of Rivals: The Political Genius of Abraham Lincoln by Doris Kearns Goodwin. Her typology is instructive for any leader (or for anyone advising leadership teams) who wants to know how to generate a deeper understanding of causes and consequences. |
During the height of the COVID-19 crisis last year, as I grieved the loss of so many lives, I found myself returning to a book a dear friend gave me to help me process the killing of my father many moons ago. The book, The Courage to Grieve: The Classic Guide to Creative Living, Recovery, and Growth Through Grief by Judy Tatelbaum, reminded me of the energy it took to confront unfinished business as a way to bring closure to my father's untimely death. Through my own personal work, I found comfort in the notion of embracing the alienated part of myself in order to move forward. Tatelbaum's book gave words to feelings that had been indescribable. |
Having worked at Google, I have a passion for how advances in AI turbocharge an organization's overall effectiveness. Competing in the Age of AI: Strategy and Leadership When Algorithms and Networks Run the World, by Marco Iansiti and Karim R. Lakhani, offers a pragmatic view of how companies can create and capture value, with examples of companies that have transformed their operating models to compete and win. |
Finally, I recommend Black Panther: A Nation Under Our Feet Book One by Ta-Nehisi Coates. I grew up on Marvel comic books, and Black Panther was the first Black superhero I was exposed to and connected with (did I mention I was an aspiring cartoonist?). As an adult, it's so fun to be able to enjoy a childhood favorite that is brought to life by a best-selling author. At its core, Black Panther is a story of becoming, of overcoming adversity, and of resilience—themes we can all relate to in some shape or form. |
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— Edited by Barbara Tierney |
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BACKTALK |
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