Before the end of this decade, autonomous vehicles (AVs), electric vehicles (EVs), and shared forms of mobility are poised to transform the mobility landscape. How will the auto insurance landscape evolve to adapt to this wave of disruption? This is a large question with many, many answers. At ITC Vegas 2023, McKinsey brought together a group of 20 leaders from auto insurance, automotive, and mobility to discuss the future of…
On the surface, the cloud journey for many European companies is an impressive story. A stunning 95 percent of European companies in our recent survey say they’re capturing value from cloud, and more than one in three say they intend to have more than half of their workloads on cloud. But scratch below the surface, and the story is a little less rosy. The vast majority of the value companies…
McKinsey’s Carolyn Dewar, Scott Keller, and Vik Malhotra chat with McKinsey Global Publishing leader Raju Narisetti about the global impact of their best-selling book, CEO Excellence: The Six Mindsets That Distinguish the Best Leaders from the Rest (Scribner/Simon & Schuster, March 2022), and reflect on why the book is as relevant today as it was two years ago. An edited version of this third and final installment of our three-part…
From baby boomers to Gen Zers, the question of how the four generations comprising today’s workforce can best work together gets a lot of attention. Personal and professional experiences, levels of training, employer expectations, and career outlook can vary across generations. In nursing, tenure is a particularly nuanced factor that adds complexity to the discussion on workforce dynamics and may be one of the more definitive features of employee experience…
At a glance Macroeconomic challenges continued If 2022 was a tale of two halves, with robust fundraising and deal activity in the first six months followed by a slowdown in the second half, then 2023 might be considered a tale of one whole. Macroeconomic headwinds persisted throughout the year, with rising financing costs, and an uncertain growth outlook taking a toll on private markets. Full-year fundraising continued to decline from…
While global trade has risen dramatically since the 1990s and has continued to improve the lives of millions of people, geopolitical concerns have lately been rising too. Terms such as “reshoring” and “friendshoring” have seen increased use in corporate presentations by more than 20-fold in the past few years. For example, in recent years China’s share of US imported manufactured goods fell from 24 to 15 percent. The latest value-added…
A few years into his tenure in treasury at PepsiCo, Arun Nayar realized that to rise higher, he would need to supplement his financial expertise with operational know-how. To get that experience, he persuaded the company’s leaders to give him a lateral role overseeing finance in the global operations division, an area he knew nothing about.“When I went into those meetings, it was a different language,” he recalls. “That was…
‘The OHI is like an MRI,’ says McKinsey partner Bryan Hancock on this episode of McKinsey Talks Talent. He joins partner Brooke Weddle and global editorial director Lucia Rahilly to discuss McKinsey’s recently updated Organizational Health Index: how it works, what has changed, and why it’s still among the best predictors of whether your company will thrive over the long term.This transcript has been edited for clarity and length. The difference organizational…
As generative AI (gen AI) applications such as ChatGPT and Sora take the world by storm, demand for computational power is skyrocketing. The semiconductor industry finds itself approaching a new S-curve—and the pressing question for executives is whether the industry will be able to keep up. Leaders are responding by committing substantial capital expenditures to expand data centers and semiconductor fabrication plants (fabs) while concurrently exploring advancements in chip design,…
Executives’ latest views on the global economy and their countries’ economies lean much more positive than they did at the end of 2023. In the latest McKinsey Global Survey on economic conditions, the outlook on domestic conditions in most regions has become more hopeful, despite ongoing shared concerns about geopolitical instability and conflicts. In a year brimming with national elections, respondents increasingly see transitions of political leadership as a primary…
In this episode of McKinsey on Building Products, a podcast dedicated to the exploration of software product management and engineering, McKinsey senior partner Chandra Gnanasambandam and partner Rikki Singh sits down with Pali Bhat, chief product officer of Reddit. Bhat has been at the forefront of product innovation for several large technology platforms, including Google. During their conversation, Bhat and Gnanasambandam, and Singh discuss how to find untapped opportunities to…
Connecting with others can feel like an art, but it’s also a science. In this edition of Author Talks, McKinsey Global Publishing’s Lucia Rahilly chats with Charles Duhigg, a New York Times best-selling author and writer for the New Yorker, about his new book, Supercommunicators: How to Unlock the Secret Language of Connection (Random House, February 2024). Duhigg reveals why meaningful connection can feel so elusive—and breaks down what you can…
Fashion brands, big and small, have made ambitious, public commitments to creating more sustainable apparel by 2030. But keeping pace with their decarbonization commitments has been a challenge across the industry. About two-thirds of brands, according to a new McKinsey analysis, are behind on their own decarbonization schedules, and 40 percent have seen their emissions output increase since making their sustainability commitments. Today, the global fashion industry accounts for an…
In the first quarter of 2024, consumers in Europe once again reported having mixed feelings about the economy, but their concerns didn’t stop them from spending on discretionary items. Travel and self-care were two categories that these consumers expressed interest in. Even so, cautious consumers continued to trade down. The following charts highlight findings from our latest ConsumerWise research in five European countries: France, Germany, Italy, Spain, and the United Kingdom.…
Building advanced AI is like launching a rocket. The first challenge is to maximize acceleration, but once it starts picking up speed, you also need to focus on steering.Jaan TallinnFor AI/ML to make a sizable contribution to a company’s bottom line, organizations must scale the technology across the organization, infusing it in core business processes, workflows, and customer journeys to optimize decision making and operations in real time. This is…
Pick battles big enough to matter and small enough to win.Jonathan Kozol Many companies set their digital and AI transformations up to struggle from the start by getting the scope of the change wrong. Some companies start too small, believing an incremental approach will lower risk. This is a mistake. Successful transformations need to change something meaningful in the business, where there is a noticeable amount of value at stake…
At a glance The past quarter century has been a success story for global productivity. Median economy productivity has jumped sixfold. Thirty emerging economies, with 3.6 billion people, are in the “fast lane” of improvement; if they maintained this pace, they would converge to advanced-economy productivity levels within roughly the next quarter century. Yet amid this global revolution, many economies have experienced productivity stagnation. Advanced-economy productivity growth has slowed by…
The business case for marketplace sustainability is now well established: sustainability leaders decarbonize faster, enjoy higher multiples, and see stronger growth in their sustainable product lines. But how can marketplaces effectively attract customers to their sustainable offerings? McKinsey research shows that some features are more powerful than others in driving outcomes. For example, sustainability-conscious customers are more likely to buy if marketplaces offer bundled delivery or less packaging. However, they…
Both customers and regulators have signaled a strong desire for logistics providers to reduce their emissions. The market for green logistics, while still nascent, could expand quickly. Based on the Scope 3 reduction targets and logistics needs of about 2,800 of the world’s largest companies across industries, we estimate the demand for green logistics in 2025 will be approximately $50 billion, comprising roughly 2 percent of overall logistics spend. We…
An old fashioned type writer with a sheet of paper advancing from it. The paper has the pattern of a brain made of recently typed letters imprinted upon it. Let’s say you’re making spaghetti marinara for dinner. Sauce from a jar is perfectly fine. But what if you buy your tomatoes and basil from the farmers market to make your own sauce? Chances are it will taste a lot better.…
A profile of a 3d head made of concrete that is sliced in half creating two separate parts. Pink neon binary numbers travel from one half of the a head to the other by a stone bridge that connects the two parts.You’ve read the think pieces. AI—in particular, the generative AI (gen AI) breakthroughs achieved in the past year or so—is poised to revolutionize not just the way we create…
Ingredients made with biotechnology could play an important role in the future of food—and they’re beginning to come to market. Over the past five years, $4 billion has been invested to develop novel ingredients ranging from mycelium proteins to animal-free eggs. These ingredients are made through fermentation to create proteins and fats that can function like conventional proteins, but they are animal-free and can be more sustainable. Novel ingredients offer…
Globally, we face major demographic shifts that offer both daunting challenges and transformational opportunities for the future. There are specific ramifications for workforce composition and service delivery in the public sector. In particular, communities are better served when organizations reflect their constituents, paying special attention to the changing needs and preferences of citizens. In the coming years, we will see a very differently shaped public sector. Long-term trends such as…
Consumers remain upbeat as retail sales in the main economies show steady growth, despite elevated prices (Exhibit 1). Growing sentiment in the US saw the Consumer Confidence Index (Conference Board) rise to 114.8 in January, up from a revised 108.0 in December. By contrast, consumer confidence in Brazil dropped to its lowest level since May 2023 but is still 5.0 points higher than in January 2023. US retail and food…
As the agriculture technology (agtech) industry adapts to a new normal in fundraising—and a vastly different macroeconomic climate than in years past—investment opportunities are slowly starting to emerge. Instead of waiting on the sidelines for conditions to stabilize, strategic companies and financial investors can use this limited window of opportunity to make bold moves and gain a competitive advantage.Over the past few years, the agtech industry has faced a major…
How do you create a superior customer experience while also improving cost efficiency, productivity, and employee experience? The tension between service and cost is a perennial challenge for organizations, and it becomes particularly acute during periods of economic uncertainty. Many companies are finding themselves in such a period right now. But today’s business leaders have advantages that their predecessors did not. The rapid evolution of AI technologies has redefined operational…
Ever since OpenAI’s ChatGPT exploded into public view in late 2022, the possibilities of generative AI (gen AI) have captured imaginations throughout the business world. When it comes to crafting an effective talent strategy, organizations have focused mostly on how gen AI can increase productivity levels. This is understandable, given the trillions in value at stake. However, it may not be the most strategic approach. To match the right talent…
Southeast Asia’s economies exhibited robust performance in the fourth quarter 2023. GDP grew in all economies, with growth in Indonesia, Singapore, Thailand, and Vietnam increasing during this period, while Malaysia and the Philippines recorded slower growth (Exhibit 1). Strong domestic demand, backed by stable employment prospects and easing prices, along with a continued recovery of the services sector—particularly tourism—and early signs of improvement in exports demand supported growth. The view…
At a glance More than two-thirds of Black and Latino US residents live in the nation’s largest cities, compared to less than half of White residents. While this means some of the issues and barriers facing these two groups are highly concentrated, solutions also can be highly targeted. Nowhere do either Black or Latino residents experience even three-quarters the average overall well-being of their White neighbors, although Latino–White disparities are…
Subscribe to get the Insights to Impact briefing in your inbox weekly March 14, 2024 This week’s headline findings: Customer demands. Organizational customer care leaders find themselves trapped in no-man’s-land as they balance preparing for an AI-enabled future with managing escalating customer expectations in a rapidly digitizing contact center environment. Partners Eric Buesing, Julian Raabe, and coauthors report that more than 80 percent of organizations are investing in generative AI or plan…
Generative AI (gen AI) presents a once-in-a-generation opportunity for companies, with the potential for transformative impact across innovation, growth, and productivity. The technology can now produce credible software code, text, speech, high-fidelity images, and interactive videos. It has identified the potential for millions of new materials through crystal structures and even developed molecular models that may serve as the base for finding cures for previously untreated diseases.McKinsey research has estimated…
At a glance Health can be meaningfully modified by factors outside traditional healthcare systems, including work factors. Employers have considerable opportunities to improve health through six modifiable drivers: social interaction, mindsets and beliefs, productive activity, stress, economic security, and sleep. Globally, improving employee health and well-being could create $3.7 trillion to $11.7 trillion in economic value. Imagine a world in which employers make evidence-based investments in the health of their…
This year US health insurers have to navigate strong crosscurrents from demographic shifts, regulatory changes, and member preferences. How they react now can have an impact for years to come. By Gabe Isaacson, Dan Jamieson, Sonja Pedersen-Green, and Cara Repasky The undeniable story of early 2024 for US health insurers has been the sustained economic pressures that Medicare Advantage (MA) payers are experiencing. This was borne out in 2023 year-end…
Customer care leaders are facing their greatest challenge in decades. They must prepare their organizations for an AI-enabled future while simultaneously meeting tough commercial targets and rising customer expectations. Our latest global survey suggests that many companies are struggling on all these fronts.Major disruptions are always painful, and the transition from a care paradigm dominated by human agents to one steered by AI technologies may be the biggest disruption in…
As 2024 gains momentum, it’s significant to note that this year is marked by the Year of the Dragon according to the Chinese zodiac. The dragon, symbolizing strength and good fortune, frames the backdrop for China’s journey forward after a challenging 2023. The previous year saw China navigating the aftermath of the pandemic, with its economy starting to recover from stringent lockdowns and travel restrictions.Despite substantial challenges in the real…
In this episode of The Committed Innovator, American Red Cross chief innovation officer Sajit Joseph speaks with McKinsey innovation leader Erik Roth about the challenges and opportunities involved with innovation in a not-for-profit setting, where the goal is return on impact and teams can include volunteers. This is an edited transcript of their discussion. You can listen to the full episode on your preferred podcast platform. Every time we go…
M &A can offer a powerful lever for executing strategy, transforming organizations, and delivering exceptional value creation. In this episode of the Inside the Strategy Room podcast, two McKinsey experts talk about how executives under pressure to create more value for shareholders and stakeholders can benefit from using a transaction as an opportunity to transform the entire organization. Alex Liu is a partner in McKinsey’s Minneapolis office and a leader…
Many types of artificial intelligence (AI) capabilities have accelerated in recent years due to tumbling costs of data storage and processing, rapidly expanding data availability, and improved data storage and modelling techniques. In general, analytical AI can analyze historical data and make numeric predictions, while generative AI (gen AI) allows machines to produce new outputs similar to human-generated content. Gen AI, in particular, has been building momentum since 2017 and…
CEOs who place marketing at the core of their growth strategies are twice as likely as their peers to have greater than 5 percent annual growth, according to a recent survey McKinsey conducted with input from the Association of National Advertisers (ANA). CEOs and chief marketing officers (CMOs) must work together closely for any marketing plan to flourish. On this episode of The McKinsey Podcast, McKinsey partner Robert Tas joins…
Inspiring leaders motivate their teams to embrace the opportunities and growth inherent in change, according to Neeti Bhalla Johnson, the president of Global Risk Solutions at Liberty Mutual Insurance (Liberty). Born in India and raised in Kenya, Bhalla Johnson is passionate about furthering diversity, equity, and inclusion at the insurer, cosponsoring a group for Asian professionals there and participating in its women’s networking and advocacy group. She spoke with McKinsey…