Good Judgment Is a Competitive Advantage in the Age of AI
02/10/2023
It wasn’t that long ago that AI was considered the domain of elite experts or data scientists. Companies spoke effusively about its potential to transform business, but only a fraction of their employees had access to it. With generative AI, the game has changed — suddenly everyone is a potential programmer thanks to tools like […]
Where Should Your Company Start with GenAI?
13/09/2023
To best understand generative AI (GenAI), look at it through bifocal lenses. Through the top lens, one sees the long view of big, looming issues, such as accuracy, privacy, and bias, as well as GenAI’s potential impact on “knowledge workers” and even economy-wide job losses and societal risks. While this view is important, we have […]
How bold is your business transformation? A new way to measure progress
22/08/2023
Today’s volatile business environment continues to challenge organizations no matter their size, industry, or geography. Just a few broad trends tell the story: new digital entrants are gobbling up market share across industries; ecosystem-based strategies are gaining ground; and companies committed to environmental, social, and governance (ESG) criteria are increasingly attractive to employees and investors […]
The Value of Digital Transformation
17/08/2023
“Show me the money!” Cuba Gooding Jr., playing Rod Tidwell, made those words a cultural touchstone in the movie Jerry McGuire. He was not just voicing his concerns about committing to a sports agent, played by Tom Cruise in this case; he was also questioning Cruise’s commitment. Business leaders, shareholders, and board members have increasingly […]
The triple play: Growth, profit, and sustainability
16/08/2023
Consistent and profitable growth has been hard to achieve since the global financial crisis, making it critical for companies to explicitly choose growth in their mindsets, pathways, and execution capabilities.1“Choosing to grow: The leader’s blueprint,” McKinsey, July 7, 2022. Many executives believe making that growth sustainable and inclusive requires inscrutable trade-offs, forgoing revenue and profit for the […]
Using AI to Build Stronger Connections with Customers
08/08/2023
The surge of generative artificial intelligence (AI) applications is spurring exciting innovations and consumer experiments, but it also worries many people who are concerned about data privacy or only being able to communicate with a company through a bot. These concerns are especially acute in industries where customer interactions and data privacy are critical, such […]
3 Steps to Prepare Your Culture for AI
24/07/2023
As business leaders, today we find ourselves in a place that’s all too familiar: the unfamiliar. Just as we steered our teams through the shift to remote and flexible work, we’re now on the verge of another seismic shift: AI. And like the shift to flexible work, priming an organization to embrace AI will hinge […]
13 Principles for Using AI Responsibly
19/07/2023
Love it or loath it, the rapid expansion of AI will not slow down anytime soon. But AI blunders can quickly damage a brand’s reputation — just ask Microsoft’s first chatbot, Tay. In the tech race, all leaders fear being left behind if they slow down while others don’t. It’s a high-stakes situation where cooperation […]
Four essential questions for boards to ask about generative AI
18/07/2023
Company executives are scrambling to understand and respond to generative AI. This technology is still nascent, but of those who have used it, few doubt its power to disrupt operating models in all industries. Here is a view of how CEOs might start preparing for what lies ahead.1“What every CEO should know about generative AI,” […]
Unlocking commerce in the metaverse
16/06/2023
It’s hard to escape the metaverse. The emerging virtual world is the driving force behind the internet’s evolution, and consumers are increasingly seeking more immersive experiences and demanding the ability to interact with products and brands before making a purchase. That enthusiasm has the potential to drive $5 trillion in value creation by 2030,1Value creation […]
Leading a Midsize Business Through Change
15/05/2023
One of the sacred principles of change management is “stakeholder involvement,” i.e. engaging and including people who will be affected by the change in the process of making it happen. GE’s well known “change acceleration model,” or CAP, refers to it as “mobilizing commitment.” Kotter’s eight-step framework for change emphasizes doing this through “building a […]
How Midsize Companies Can Drive Digital Transformation
12/05/2023
The last few years have brought unprecedented challenges, opportunities, and evolution for companies of all sizes. The middle market is no exception. In fact, the pandemic served as an accelerator for a number of initiatives that were perhaps just wishes and dreams for mid-sized companies a handful of years ago, but are now very much […]
How Midsize Companies Can Keep Up with AI
08/05/2023
What do the internet, smartphones, social media, the metaverse, and generative AI have in common? Answer: they’re all part of the same, ongoing innovation movie. We’ve seen this movie before, and if the Fast & Furious series can create double-digit sequels (movie number 10 coming soon), we should expect the same from technology. Somehow, we […]
The next frontier of customer engagement: AI-enabled customer service
24/04/2023
How to engage customers—and keep them engaged—is a focal question for organizations across the business-to-consumer (B2C) landscape, where disintermediation by digital platforms continues to erode traditional business models. Engaged customers are more loyal, have more touchpoints with their chosen brands, and deliver greater value over their lifetime. Yet financial institutions have often struggled to secure […]
Getting Employee Buy-In for Organizational Change
10/03/2023
Most advice about building internal support for organizational change reiterates perfunctory platitudes, reminding leaders to communicate reasons for the change, or even to be excited about the change themselves. But in working with hundreds of companies going through organization change I’ve learned that this approach is simply not enough. In fact, research shows, that this […]
11 Tech Trends to Watch in 2023
07/03/2023
It can be tough to keep up with the rapid pace of innovation. Each new year delivers the full spectrum of progress from game-changing breakthroughs to incremental advancements in a wide variety of fields. In a noisy media landscape fueled by hype and speculation, it can be tough to know where true value is being […]
Digital transformations: The five talent factors that matter most
17/01/2023
Digital transformations—whether digitalizing an entire company or setting up a digital and advanced-analytics (DnA) start-up within the organization—are a significant challenge. We have frequently seen these transformations stumble along the way, and leaders often have difficulty sustaining any improvements over time. Across the transformation journey, talent and technology are critical to success, from planning and […]
The digital revolution is brewing in the industrials sector
24/11/2022
Over the past 20 years, industrial players have pursued value creation through a focus on product margin optimization, channel sales excellence, and programmatic M&A. These strategies proved fruitful in the prepandemic era. From 2014 to 2019, traditional financial measures of value creation reflected robust sector-level performance: ROIC rose 13 percent—in excess of the typical sector-level […]
Visualizing the Rise of Global Economic Uncertainty
04/10/2022
Over the last six years, companies have had to grapple with five major “uncertainty shocks”: First it was Brexit in 2016, followed by the U.S. presidential election, China-U.S. trade-tensions, the Covid-19 pandemic, and in 2022 the Ukraine war. These shocks reflect a new normal of greater global turbulence, driven by domestic and international political fragmentation. […]
Digital Transformation Is Changing Supply Chain Relationships
12/08/2022
The digital transformation of businesses is creating new products, processes, and services. But to provide these new offerings, companies must share information and assets with each other in ways that were previously off-limits. For example, digitized services may require competitors to share physical assets such as warehouse space. This, in turn, means that companies will […]
Organizational Transformation Is an Emotional Journey
08/08/2022
The road is littered with failed transformation programs that were set up in the traditional way: Leaders define objectives, design a project plan, agree on KPIs, and recruit the right people. As many executives, academics, and consultants can relate to, the rate of failure in transformations is still far too high, and one that organizations […]
Your Corporate Purpose Changed. Has Your Strategy Kept Up?
11/07/2022
The key question for leaders tasked with setting corporate strategy is, “What is this company’s ultimate purpose?” Fortunately, the basic approach to answering that question has been clearly articulated by the U.S. Business Roundtable. In August 2019 it issued the “Statement on the Purpose of a Corporation,” signed by 181 CEOs from Apple to Walmart. […]
Why AI Customer Journeys Need More Friction
01/07/2022
In marketing circles, friction has become synonymous with “pain point.” Eradicating it, conventional wisdom goes, is crucial to building a customer-centric strategy that yields competitive advantage. Taking a cue from policy applications of behavioral economics, marketers seek to “nudge” people along the customer journey and remove friction in the battle against “sludge.” At many firms, […]
Capture a digital transformation’s value today
23/06/2022
While some of the obstacles to digital-transformation success are well known, McKinsey Global Survey on digital strategy and investments asked business leaders about the evolution of these challenges, digital tech’s role in their businesses, and companies’ strategic responses. 2 2. The online survey was in the field from January 25 to February 4, 2022, and garnered […]
The Data Storytelling Toolbox: Data Management, Digital Transformation, and Master Data
09/06/2022
Scott Taylor believes in data storytelling. More to the point, he believes that telling a “data story” leads to Data Governance success. Taylor is a consultant and “Data Whisperer” at MetaMeta Consulting, and author of the book, Telling Your Data Story. In his presentation “Data Storytelling for Data Management” at DATAVERSITY®’s Enterprise Data World Conference, […]
Flexible work and the innovative organization
06/06/2022
Despite the upheaval caused by the COVID-19 pandemic—and partly because of it—innovation and digitization have been happening at a record-breaking pace. A McKinsey survey of top executives around the world found that companies accelerated their digitization of customer, supply chain, and internal operations by an average of three years. Indeed, over the past two years, countries […]
The next frontier in consumer goods: Digitally enabled innovation
27/05/2022
With digitally enabled innovation, our work has shown that consumer packaged goods (CPG) companies can bring new products to market 50 percent faster, at a third lower cost, and with double the return on investment. While the industry has embraced new technologies in many parts of the business, from manufacturing to marketing, most organizations are […]
The board’s role in cloud
19/05/2022
Few companies are unaware of the potential benefits of cloud. Far fewer, however, have captured them at scale. For companies looking to increase their speed of innovation, the efficiency of their IT, and the business value their technology generates, finding the formula to unlock cloud’s value is paramount. Boards have an important role to play […]
How to Map Out Your Digital Transformation
10/05/2022
At the start of the pandemic, businesses around the globe found themselves exposed to an unexpected boost in digitalization. Those who promised to keep the wheels turning were given carte blanche to do whatever it took to keep a company running. But as many now return to the office, they also realize that the digitalization […]
3 Obstacles to Globalizing a Digital Platform
05/05/2022
As technology progresses, it has become increasingly easy for digital platform companies to reach customers around the globe. This ease of access can make scaling up seem effortless — after all, virtual marketplaces are borderless by nature, and so it can be tempting for these businesses to view the entire world as their target market […]
Building new supply-chain management skills for a digital age
30/03/2022
What expertise will your next generation of warehouse managers require? Computer programming? Data analytics? Advanced robotics? Maybe all those things and more. If you are like the 71 global companies that responded to a 2021 supply chain survey, you probably accelerated your investments in digital technology as your supply chain grappled with COVID-19 challenges. What’s […]
How Brands Can Enter the Metaverse
08/03/2022
There are quite a few people who believe that the latest paradigm shift for the internet is already well underway: the metaverse, they say, is almost here. When companies investing in a space and the media declare a moment, it’s reasonable to take a beat and see whether the reality can live up to the […]
How Your Brand Should Use NFTs
02/03/2022
Non-fungible tokens (NFTs) are going mainstream in 2022. You can now show off your favorite NFTs as your Twitter or Reddit profile picture, with Facebook and Instagram soon to follow. Driven in part by a FOMO reminiscent of the 1990s dotcom anxiety of bricks-and-mortar companies, mass-market players and luxury brands alike are launching NFT collections […]
Agile Doesn’t Work Without Psychological Safety
22/02/2022
Twenty-one years ago, 17 software engineers published the Manifesto for Agile Software Development, more commonly known as the Agile Manifesto. Responding to the bureaucratic waterfall model of software development, with its linear phases and heavy documentation, these engineers advocated a more flexible approach, one that could adapt and succeed in a highly dynamic environment. That […]
How Leaders Can Balance the Needs to Perform and to Transform
14/01/2022
Leaders are facing two relentless sources of pressure right now. The first is the intense demand to perform— to deliver excellent short-term results despite radical shifts in what customers need and want, where and how people choose to work, and whether supply chains work at all. The second is the urgent need to transform — to […]
Designing a Seamless Digital Experience for Customers
21/12/2021
Over the last couple of years, more and more companies have been trying to fundamentally reshape the way in which they interact with their customers — a trend that has been accelerated by the recent Covid-19 pandemic. Perhaps the biggest change firms have made is that, rather than having a few episodic interactions, they are […]
What CIOs need from their CEOs and boards to make IT digital ready
20/12/2021
To innovate at scale and outperform competitors in the digital age, companies need to be tech forward. That means embedding tech into their business strategy and operating model. For most organizations, that requires a digital-ready IT function—one that is fast, adaptable, focused on the end user, and able to deliver business value. As any CIO […]
Can companies build on their digital surge?
08/11/2021
In mid-2020, the CEO of a Fortune 500 company was looking at the spike in the business’s digital sales and the remarkable speed of its growth. He was pleasantly surprised by how well the digital side of the business had performed, and he complimented his digital leaders. Secure that the digital business was doing well, […]
Dynamic talent allocation and the future of work
22/10/2021
The pandemic has also increased pressure on organizations to respond to three long-term talent trends that have been building for at least a decade: on-demand skills are scarce, made worse by digitization and automation; responding rapidly to changing and uncertain conditions is essential; and flexibility reigns supreme. Reskilling is an important part of the response to […]
Strategy for a digital world
20/10/2021
Digital’s ascendancy is visible not only in the dominance of hyperscale tech companies but in the success of non-digital-native companies such as John Deere, Goldman Sachs, BHP, Disney, and Bosch, among others. These companies have invested heavily in new digitally enabled strategies and business models. Not only did they enter the pandemic with bigger technology […]
The 4 Tiers of Digital Transformation
27/09/2021
It’s easy to acknowledge the game-changing role digital technologies are playing in the modern economy. The challenge, to which most companies have yet to rise, is figuring out how to fully capture the different kinds of value that these technologies offer. Developing a strategy for digital transformation that fully leverages this value is also not […]
5 Questions Boards Should Be Asking About Digital Transformation
01/07/2021
The CEO of a large retail company recently brought a $500 million digital-transformation-investment plan to his board. The board reviewed the proposal, but after asking a number of questions, they were unable to evaluate it. Was it too costly? Was it aiming too low? Was it focused on the right priorities? One board member admitted […]
What’s next for digital consumers
18/06/2021
The COVID-19 pandemic has driven rapid adoption of digital channels across countries and industries, but digital’s growth has plateaued in the past six months and may begin to slip back once the pandemic eases—even as total digital adoption stays well above prepandemic levels. That’s one of the findings from a new McKinsey survey of global […]
Inside IKEA’s Digital Transformation
15/06/2021
What does it mean for one of the world’s most recognizable retail brands to go digital? For almost 80 years, IKEA has been in the very analogue business of selling its distinct brand of home goods to people. Three years ago, IKEA Retail (Ingka Group) hired Barbara Martin Coppola — a veteran of Google, Samsung, […]
The future of the $1.5 trillion wellness market
11/06/2021
The concept of wellness has been around for a long time. Remember Jane Fonda workout tapes, neon legwarmers, and the “cookie diet”? These days, consumers view wellness through a much broader and more sophisticated lens, encompassing not just fitness and nutrition but also overall physical and mental health and appearance. They also have more choice in […]
Transformation in uncertain times: Tackling both the urgent and the important
10/02/2021
In ordinary times, successful leaders continually strive to master the balance between the urgent and the important, both in their organizations and their daily schedules. But today’s CEOs face unprecedented financial, health and safety, and operational challenges. For them, the problem isn’t balancing the urgent with the important. It’s that most everything is both urgent […]
How to find and maximize digital value in any M&A deal
17/11/2020
The digital revolution is changing the dynamics of M&A transactions. IT used to represent a cost that needed to be managed and controlled as two organizations came together. Today, IT and digital capabilities are often the driving force behind the transaction. But, even when an acquisition centers around a company’s other attractive assets, digital capabilities […]
A Measured Approach to Regulating Fast-Changing Tech
06/11/2020
Paul Taylor/Getty Images Amid the economic upheaval caused by Covid-19, technology-driven disruption continues to transform nearly every business at an accelerating pace, from entertainment to shopping to how we work and go to school. Though the crisis may be temporary, many changes in consumer behavior are likely permanent. Well before the pandemic, however, industries and […]
How nine digital front-runners can lead on AI in Europe
27/10/2020
Globally, researchers are working to discover how artificial intelligence (AI) can be usefully applied across a range of commercial and public-sector situations. Much of the most exciting work is taking place in tech clusters, particularly in China and the United States, which are attracting some of the brightest global talent. Europe is also seeing rising […]
Tech Should Enable Change, Not Drive It
22/10/2020
Hiroshi Watanabe/Getty Images The world is changing in rapid, unprecedented ways, but one thing remains certain: as businesses look to embed lessons learned in recent months and to build enterprise resilience for the future, they are due for even more transformation. As such, most organizations are voraciously evaluating existing and future technologies to see if […]
Tech Is Transforming People Analytics. Is That a Good Thing?
22/10/2020
Illustration by Shani Pleasants A century ago, Frederick Taylor’s Scientific Management laid the foundations for modern HR. His central premise was that organizations should turn their workplaces into real-world psychology labs, measuring and monitoring employees’ every move in order to boost their performance and reduce their stress levels. The paradigm was revolutionary, and led famous […]
How CPG companies can adapt their digital marketing in the next normal
15/10/2020
At many US consumer-packaged-goods (CPG) companies business has been turned on its head. Even for companies in categories that experienced rapid growth, the past several months have been dizzying. A historic drop in US consumer confidence was accompanied by pantry loading for essential items such as household supplies (up 76 percent in March) and packaged […]
How COVID-19 has pushed companies over the technology tipping point–and transformed business forever
09/10/2020
In just a few months’ time, the COVID-19 crisis has brought about years of change in the way companies in all sectors and regions do business. According to a new McKinsey Global Survey of executives, 1 1. The online survey was in the field from July 7 to July 31, 2020, and garnered responses from […]
How to win with digital marketplaces
10/09/2020
Digital marketplaces have been the buzz of the consumer industry for the past several years, yet many brands and retailers still struggle to understand if and how to partner successfully with them. As a result of marked shifts in consumer behavior during the COVID-19 pandemic, digitization has accelerated even further: 40 percent of consumers are […]
How companies can create value from digital ecosystems
08/09/2020
While ecosystem-building has been a red-hot topic in the business world in recent years, the COVID-19 crisis has amplified the importance of digital interactions and will likely further accelerate the adoption of digital-ecosystem business models. Our global consumer sentiment surveys indicate that the spike in online sales will continue to some extent even after the […]
Lessons from Chinese Companies’ Response to Covid-19
28/08/2020
The past months have provided an opportunity to study a once-in-a-lifetime moment — how companies function during an unprecedented global pandemic while also navigating an accelerated shift to digital operations. China was weeks ahead of the rest of the world in dealing with the pandemic and its fallout, so their experience is of interest. We […]
Reskilling workers for industry 4.0
26/08/2020
Technological progress is enabling machines to complete many of the tasks that once required human beings. That new automation revolution will have a major effect on employment in the coming years. Nearly every job will change, many quite profoundly, and the overwhelming majority of today’s employees will need to develop new skills. Preparing for the […]
Companies Need to Rethink What Cybersecurity Leadership Is
27/07/2020
Jorg Greuel/Getty Images For businesses today, cyber risk is everywhere. Yet for all the investments they’ve made to secure their systems and protect customers, companies are still struggling to make cybersecurity a vibrant, proactive part of strategy, operations, and culture. The root cause is twofold: (1) Cybersecurity is treated as a back-office job and (2) […]
The telltale signs of successful Digital M&A
03/07/2020
The old saw that the best deals are the ones you don’t make doesn’t apply when it comes to digital acquisitions—you’ve got to make them, research has consistently shown. You also need to do them well, and that can be challenging, because buying in the digital, analytics, and technology space—what we call “digital deals”—is different […]
How business leaders can plan for the next normal
30/06/2020
Dealing with the coronavirus crisis and its aftermath could be the imperative of our times. Indeed, we have argued that it augurs the “imminent restructuring of the global economic order.” As Ian Davis, one of our previous managing partners, wrote in 2009 in the midst of the global financial crisis: “For some organizations, near-term survival is […]
Setting up small and medium-size enterprises for restart and recovery
19/06/2020
Governments’ economic responses to the COVID-19 pandemic have included an array of measures to help people and businesses weather the storm. Small and medium-size enterprises (SMEs) are in an especially difficult position. Plunging demand has forced them to lay off workers, and many don’t have the financial resources to survive in this climate. In many […]
Preparing for the next normal via digital manufacturing’s scaling potential
17/06/2020
The coronavirus pandemic is changing manufacturing operations to a degree never before seen. As organizations and leaders seek to ensure the health and safety of their people, they are also reacting to supply-chain shifts that are impacting sourcing and distribution logistics. Supplier resilience is being brought into sharp focus, and labor shortages are bringing many […]
Why Now Is the Time for “Open Innovation”
16/06/2020
Jorg Greuel/Getty Images Amidst the gloom and doom of the early months of the Covid-19 crisis, something surprisingly uplifting started to happen: Companies began to come together to work openly at an unprecedented level, putting the ability to create value before the opportunity to make a buck. The German multinational Siemens, for instance, opened up […]
Digital collaboration for a connected manufacturing workforce
15/06/2020
Many experts predicted that with the coming of the Fourth Industrial Revolution (4IR), automation and advanced technologies would rapidly displace factory jobs and workers world-wide. Thus far, this prediction has not panned out. In fact, our research with the World Economic Forum (WEF) reveals that leading factories (“Lighthouses”) have invested significantly in people. And the […]
Digital adoption through COVID-19 and beyond
11/06/2020
By now, most C-suite executives have led their companies to digitize at least some part of their business to protect employees and serve customers facing mobility restrictions as a result of the COVID-19 crisis. As one CEO of a large tech company recently stated, “We are witnessing what will surely be remembered as a historic […]
How to scale your digital transformation
04/06/2020
When a team of top executives from a North American bank entered a converted warehouse run by a European telecom giant, they couldn’t believe what they were seeing. Engineers were live-coding in small teams with designers and businesspeople and reviewing the results right away with customers. They were making adjustments to feedback on the fly. […]
How to restart stalled digital initiatives and transformations
02/06/2020
At organizations pursuing digital transformations, more than seven in ten survey respondents say the progress of these efforts has slowed or stalled at some point. In their latest McKinsey Global Survey on the topic, 1 1. The online survey was in the field from May 16 to May 31, 2019, and garnered responses from 1,256 C-level […]
Driving digital change during a crisis: The chief digital officer and COVID-19
29/05/2020
Amid the humanitarian crisis that has upended lives and cast a veil of uncertainty over the future, one thing is clear: we are living in a much more digital world. As governments around the world institute nationwide lockdowns, the demand for digital services and products, from both customers and employees stuck at home, has hit […]
Direct-To-Consumer Brands Are Finding New Ways To Engage With Customers
27/05/2020
Even before the pandemic arrived, acquisition channels and costs were on the top of mind for a lot of direct-to-consumer brands. Since they can’t rely on exposure through big retail chains and online marketplaces, they have to find their own ways to reach customers while staying cost-effective. A lot has changed in the world over […]
The digital-led recovery from COVID-19: Five questions for CEOs…
27/05/2020
There’s a popular meme going around that neatly captures the tipping point of digital. It’s a short questionnaire asking who is driving your digital transformation. The first two options are “CEO” and “chief digital officer.” Below that, highlighted with a bright red circle, is “COVID-19.” The coronavirus pandemic is a humanitarian crisis that continues to […]
How the CPG industry can prepare for the next normal
07/05/2020
As the coronavirus pandemic spreads across the globe, threatening both lives and livelihoods, consumer-packaged-goods (CPG) manufacturers continue to play an important role: producing essential items we all rely on for our health and well-being. CPG leaders have focused on meeting this demand while guarding the safety of employees and customers. At the same time, forward-thinking […]
How the Coronavirus Crisis Is Redefining Jobs
06/05/2020
Martin Barraud/Getty Images The outbreak of Covid-19 has forced organizations into perhaps the most significant social experiment of the future of work in action, with work from home and social distancing policies radically changing the way we work and interact. But the impact on work is far more profound than just changing where people work; […]