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Davos 2024: What leaders need to know

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Leading Off

Brought to you by Liz Hilton Segel, chief client officer and managing partner, global industry practices, & Homayoun Hatami, managing partner, global client capabilities

The World Economic Forum’s annual meeting, which took place last week in Davos, Switzerland, brought together the world’s top decision makers to debate global issues. Known simply as “Davos,” the event has a unique significance for leaders worldwide. “The power of Davos is its ability to convene,” McKinsey global managing partner Bob Sternfels told Leading Off. “It is an opportunity for leaders in government and business to come together and be thoughtful about how to work together. With the current convergence of multiple generation-defining issues at once, from disruptive technologies to geopolitical dynamics, these dialogues have never been more important.” This week, we bring you Davos highlights selected for their relevance to leaders who wish to take swift action on these issues.
An image linking to the web page “Geopolitics and the geometry of global trade” on McKinsey.com.

Throughout history, cooperation and conflict have coexisted—and in today’s volatile world, cooperation may need to take the lead. Leaders may find the joint WEF/McKinsey Global Cooperation Barometer 2024 a useful tool to design positive actions. The barometer uses 42 indicators to measure the state of global cooperation in five areas: trade and capital, innovation and technology, climate and natural capital, health and wellness, and peace and security. So far, the barometer’s results are mixed. For example, global cooperation in innovation and technology advanced significantly from 2012 to 2020 but fell off during the COVID-19 pandemic. Promoting greater cross-border collaboration—such as international student exchanges—and harmonizing global regulation of frontier technologies may be two critical areas for leaders to address.

That’s McKinsey senior partners Kate Smaje and Rodney Zemmel on the overwhelming buzz around this new technology, which dominated many sessions at Davos. “[It] stands to have a profound impact on how we live and work,” they observe. “But the very excitement around gen AI is in danger of distracting business leaders from some other core business imperatives.” The McKinsey experts point to ten such fundamentals “that are often overlooked under the stresses of day-to-day demands and technology hype.” For example, it’s relatively easy to innovate but much harder to scale: an estimated 40 percent of digital and AI transformations stall at the scaling phase. Leaders need to “understand the specific capabilities it takes to scale and build them into the road map,” suggest Smaje and Zemmel.
An image linking to the web page “Financial inclusion and sustainable, inclusive growth in action” on McKinsey.com.

Among the main topics of discussion at this year’s Davos meeting was sustainable inclusive growth—and financial inclusion could be an important way to contribute to that growth. In a discussion with McKinsey senior partner André Dua, Michael Froman, president of the Council on Foreign Relations and former vice chairman and president of strategic growth at Mastercard, notes that the private and public sectors need to work together to help more people gain access to economic opportunity. For example, in many economies, “you’ve got people who are sending money to their friends and family and are dependent on expensive remittance providers,” says Froman. “And all of those services can be provided more affordably, but it really involves financial institutions, networks, and others finding ways to reach that market and making those services available in an affordable manner.”
An image linking to the web page “Everyone in My Family Has Killed Someone” on harpercollins.com.

Missed Davos this year? Prepare for it like a pro in 2025 with the tips we’ve gathered. We checked in with McKinsey leaders on how they passed the time during their long commute to the Alpine resort. Note for next year: bring a book. Indulging in a juicy read was among the diversions. “I read a book by Benjamin Stevenson called Everyone in My Family Has Killed Someone,” one senior partner told us. “It’s a nod to Agatha Christie in a more modern way, where [the author] sets himself and his family in this isolated mountain village and bad things happen.” Or you could get a head start on Davos by preparing for upcoming meetings with key stakeholders, including CEOs. Simply type the person’s name into a podcast app, suggests another senior partner: “Almost inevitably, they’ve done some podcast, and it’s great to listen to the person talk about their journey and what they’re focused on in their own words, and even weave in some of those tidbits into the discussion. It really shows that you’ve done your preparation for it.”

Lead by taking action.

— Edited by Rama Ramaswami, senior editor, New York

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by "McKinsey Leading Off" <publishing@email.mckinsey.com> - 04:05 - 22 Jan 2024