To get a sense of the future, McKinsey`s financial and risk experts, with contributions from the McKinsey Global Institute, offer eight charts illustrating the decline of the virus in certain regions, the increase in economic stability, and short-term growth (exposure). Other graphs examine how economies have recovered from past crises and model possible outcomes. For some, the pandemic has strained business and operating models to the point of making inroads. Organizations will eventually reduce or permanently halt these activities. This can include moving certain business functions into the (e.B SaaS ecosystem) or removing a product or service altogether. In some cases, retirement is long overdue. Simply put, relief is always needed for various reasons in order to avoid further destruction of the business. But there are not enough public resources to give capital to all small businesses, which means that aid should be targeted at businesses that have been hardest hit by COVID-19. In our third author`s lecture, Azeem Azhar, creator of exponential View, is featured in his new book The Exponential Age: How Accelerating Technology Is Transforming Business, Politics and Society (Diversion Books, September 2021), entitled Exponential: How to Bridge the Gap Between Technology and Society (Random House Business, September 2021). Azhar hopes the book will serve as a roadmap on how companies can cope with the impact of AI, automation and big data. This week, we spoke to two prominent leaders about what has prevented them from living their experience of the pandemic. Chris Kempczinski, CEO of McDonald`s, spoke with Greg Kelly, senior partner, about how the company has worked hard to stay relevant.
For a restaurant chain in crisis, this means outperforming each other in terms of delivery; McDonald`s has increased the number of its sites where delivery is offered to more than 30,000. Leena Nair, Unilever`s Chief Human Resources Officer, shared her strategies for serving approximately 150,000 employees with senior partner Mary Meaney and editor Astrid Sandoval. For those who work and wonder when the pace of work might slow down in 2020, here`s an encouraging sign: Nair says, „This speed is not sustainable.“ Unfortunately, for small businesses, the shock of COVID-19 is not creative destruction, but destructive destruction. At the height of the crisis, in April 2020, 90% of small business owners reported that COVID-19 had had a negative impact on their business. [ii] Some small businesses were better prepared, but overall, businesses struggled because of the regulations needed to protect public safety, which limited consumer demand – not because they were less productive than their competitors. Simply letting businesses fail through no fault of their own would not only cost jobs, but also destroy all the intangible learning and know-how that small business owners have developed with their employees. This „company-specific capital“ can be lost very quickly and it is very difficult to transfer it to another company or rebuild it through additional activity. [iii] As a result, widespread bankruptcies of small businesses could significantly increase the time it takes for the labour market to recover. The past year has been a wild race for financial advisors, who have guided clients through the turbulence and experienced a record 9% year-over-year growth in median wealth per advisor. McKinsey`s annual report on the state of wealth management in North America for retail clients collected data from approximately 70,000 North American financial advisors. The results included that fee revenues increased but were offset by lower fee prices. Business leaders feel good about the global economy.
In the McKinsey Global Economic Sentiment Survey in April, 73 percent of respondents said they believe conditions will improve over the next six months. The proportion of managers who expect conditions to deteriorate has more than halved in the last three months. Sentiment is most positive in North America and Greater China, and most negative in India and Latin America, where the pandemic has recently wreaked havoc. We`re all tech executives now, to some extent. In all sectors, competitive differentiation today is the result of superior digital capabilities and technological equipment, more agile delivery and increasingly tech-savvy management. To better understand how large banks are getting more results with their technology budgets, we looked at how their workforce is configured in three dimensions: spend, roles, and talent. Banks that have reconfigured all three have seen a significant increase in the output of their technology budgets. Consumer goods (CPG) manufacturers need to leverage digital and analytical capabilities to increase productivity. FmCG companies also need to solve the mystery of e-commerce, which offers a growth channel, but not necessarily profitable.
In the McKinsey on Consumer and Retail podcast, Lidiya Chapple and Tatiana Sivaeva of McKinsey explain how fmCG companies can cost-effectively meet the needs of online consumers. Energy companies are under social pressure and increased regulation to significantly reduce dependence on fossil fuels. Industry-leading companies should consider a promising solution: autonomous factories. These future assets connect technology, data, and advanced visualizations to operations to ensure facilities learn from every action taken, as well as historical data and derived information. These plants are gradually improving their operation over time to operate with a lower carbon footprint as well as safer and more cost-effective. When a crisis becomes a recovery or vice versa, leaders must switch between managing the present and the future. This week, McKinsey looked at how industries such as healthcare, aviation, consumer goods trading and wealth management can plan for the long term, even as they face the immediate disruptions of the pandemic. The bottom line: Modeling, forecasting, and planning are all important, but bold investing is key. The global economy has recovered from the lows of 2020 (stock markets too, albeit in different ways), but its future direction is unclear, even by the standards of economic forecasts. Throughout the crisis, we offered two essential tools for executives to plan a course; This month, we updated both.
In April 2020, as part of our business model, we published a series of nine scenarios and surveyed thousands of leaders around the world about their economic outlook. Our latest survey shows greater optimism about the economy and business prospects than at any time since the beginning of the crisis – and on some fronts more than in recent years (Figure 2). Nevertheless, weak demand continues to threaten business growth and the pandemic remains the biggest risk to growth in respondents` countries. Check out our interactive information on scenarios and investigations here. Also in Author Talks, Paul Polman, co-founder and chairman of IMAGINE and former CEO of Unilever, discusses his book Net Positive: How Courageous Companies Thrive by Giving More Than They Take (Harvard Business Review Press, October 2021). Leadership and system changes are needed so that companies can focus on success in solving the world`s problems. Nine months into the first mass COVID-19 vaccination programme, only 1.4% of people in low-income countries have received at least one dose. The problem is not only supply, but also distribution and the lack of a solid cold chain infrastructure in some parts of the world. Solving these problems is the only way to move from where we are now to the post-COVID-19 era. Once the challenge of vaccination – and the pandemic itself – is overcome, CEOs will be faced with a new set of priorities that our experts set out this week. We also explored mindsets and skills, including automation, partnership and development, and supporting various talents that will be essential for future leaders.
Forward-thinking retail companies are creating thoughtful policies for hybrid work, training employees to recover from burnout, and proactively training their workforce. In the McKinsey on Consumer and Retail podcast, partners Bryan Hancock and Ashish Kothari discuss retail companies that need to add new capabilities due to the massive shift of industries to omnichannel during the pandemic. They share examples of companies that have replaced certain jobs with automation and then redirected employees` time and energy to new tasks that can grow the business. Business development is one of the top strategic priorities for companies – twice as much as in recent years. Indeed, executives expect half of their company`s revenue in five years to come from products, services or companies that don`t yet exist, according to McKinsey`s latest global survey of new business creation. This year`s survey provides insights to get companies to accelerate the learning curve. Our most important conclusion of COP26 was that the net zero imperative is no longer being questioned – it has become an organisational principle for businesses. McKinsey`s analysis shows that a net-zero transition would require $150 trillion in capital spending, two-thirds of which would be in developing countries. Net zero liabilities go beyond the formation of supply chains, market mechanisms and financing models. We suggest five considerations that can help leaders define an effective net-zero emissions agenda for the coming years. „Business forecasts exist to make astrology beautiful,“ says Kevin Sneader, McKinsey`s global managing partner, paraphrasing John Kenneth Galbraith`s famous joke before describing eight trends he predicts will define in 2021 and beyond.
Despite the complexity of trying to look to the future, McKinsey experts this week suggest what awaits financial markets, business organization and medical research. In an in-depth analysis of the state of black America, our experts envision what the future of nearly 13 percent of the U.S. workforce might look like. .