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Is your organization addressing holistic health? A leader’s guide
by "McKinsey Leading Off" <publishing@email.mckinsey.com> - 04:45 - 4 Dec 2023 -
Six priorities could help leaders create value in the net-zero transition
On Point
Brought to you by Liz Hilton Segel, chief client officer and managing partner, global industry practices, & Homayoun Hatami, managing partner, global client capabilities
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Cleaner mining. At a time when companies are clamoring for critical inputs needed for the clean-energy transition, greenhouse gas emissions within the mining industry are set to increase. But some miners, facing pressure from customers who seek greener supply chains, are limiting their reliance on fossil fuels. Rather than using diesel, the Indonesia-based subsidiary of a global mining company powers its smelters using hydroelectricity. That switch can prevent about 1.1 million tons of emissions from entering the atmosphere each year, the company said. [AP]
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Steadfast on sustainability. Navigating the net-zero economy has become more complicated over the past 12 months amid supply chain pressures and lackluster economic growth. For some leaders, the current pressures are creating tension between near-term financial performance and net-zero commitments. Despite the headwinds, leaders can make bold moves to create value in the net-zero transition, vaulting past those that may slow down their sustainability efforts, McKinsey senior partner Tomas Nauclér and coauthors explain.
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Powerful priorities. McKinsey research on the 2007–08 financial crisis reveals the moves companies made that contributed to superior performance. To reap the benefits of a net-zero economy, leaders can consider a set of priorities that combine the tactics of the best-performing companies of the 2007–08 crisis with actions taken by early sustainability leaders—such as building and scaling new green businesses. Discover six priorities that can enable organizations to play offense in the net-zero transition and generate growth.
— Edited by Belinda Yu, editor, Atlanta
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Copyright © 2023 | McKinsey & Company, 3 World Trade Center, 175 Greenwich Street, New York, NY 10007
by "McKinsey On Point" <publishing@email.mckinsey.com> - 01:21 - 4 Dec 2023 -
The week in charts
The Week in Charts
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by "McKinsey Week in Charts" <publishing@email.mckinsey.com> - 03:26 - 2 Dec 2023 -
Securing a successful net-zero transition
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Though momentum has been meaningful, the world is still not on track to meet the goals of the 2015 Paris Agreement, which include limiting the rise of global warming to well below 2.0°C (and ideally to no more than 1.5°C) relative to preindustrial levels. How can stakeholders reduce the odds of initiating the most catastrophic impacts of climate change? As global leaders gather for COP28, the United Nations’ annual conference on climate change, check out this month’s first featured story from McKinsey’s Mekala Krishnan, Sven Smit, Humayun Tai, Daniel Pacthod, Tomas Nauclér, Blake Houghton, Jesse Noffsinger, and Dirk Simon. In the report, the authors outline principles that can guide stakeholders in addressing the four key objectives of the net-zero transition simultaneously—and even help accelerate the progress of the transition. Our second featured story proposes ten key requirements for a systemic approach to climate adaptation. Other highlights in this month’s issue include the following topics:
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how CFOs can approach generative AI (gen AI) company-wide and climb the gen AI learning curves
Gen AI: A guide for CFOs
How should CFOs approach generative AI—enterprise-wide and in the finance function—and what can they do right now to rapidly climb the learning curve?
Be proactive
CEOs’ choice for growth: Building new businesses
Business leaders and investors see now as an opportune time to build new businesses. New survey data reveals what’s really needed.
Download the full report
Innovative growers: A view from the top
McKinsey research shows that a focus on aspiration, activation, and execution can help companies out-innovate and outgrow peers.
Invest productively
Reframing employee health: Moving beyond burnout to holistic health
A new McKinsey Health Institute survey across 30 countries offers insights into how organizations can help create a workplace that prioritizes physical, mental, social, and spiritual health.
Move the needle
The State of Fashion 2024: Finding pockets of growth as uncertainty reigns
Fashion companies will face economic headwinds, technology shifts, and an evolving competitive landscape in 2024. However, shifting consumer priorities will continue to offer opportunities.
Sashay away
Who is productive, and who isn’t? Here’s how to tell.
More than 50 percent of workers say their productivity is down. Managers who understand what motivates different types of workers can boost their engagement and help them find more satisfaction at work.
Boost productivity and performance
McKinsey Explainers
Find direct answers to complex questions, backed by McKinsey’s expert insights.
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McKinsey Themes
Browse our essential reading on the topics that matter.
Get up to speed
McKinsey on Books
Explore this month’s best-selling business books prepared exclusively for McKinsey Publishing by Circana.
See the lists
McKinsey Chart of the Day
See our daily chart that helps explain a changing world—as we strive for sustainable, inclusive growth.
Dive in
McKinsey Classics
Lack of certainty about the future is the very reason you need a strategy. Read our 2018 classic “How to confront uncertainty in your strategy.”
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The Daily Read
Our Daily Read newsletter highlights an article a day, picked by our editors.
Subscribe now— Edited by Eleni Kostopoulos, managing editor, New York
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by "McKinsey Highlights" <publishing@email.mckinsey.com> - 11:57 - 2 Dec 2023 -
EP88: Linux Boot Process Explained
EP88: Linux Boot Process Explained
Forwarded this email? Subscribe here for moreThis week’s system design refresher:
How Git Works: Explained in 4 Minutes (Youtube video)
Linux Boot Process Explained
The Evolving Landscape of API Protocols in 2023
Explaining the 4 Most Commonly Used Types of Queues in a Single Diagram
A Brief Overview of Kubernetes
Streamline API Development With Postman Workspaces (Sponsored)
Solve problems together. They are the go-to place for development teams to collaborate and move quickly while staying on the same page.
With workspaces, teams can:
Automatically notify other team members about changes to APIs as updates sync in real-time.
Set up manual or automated workflows to support different stages of API development.
Enable faster onboarding for both internal and external partner developers
Create collaborative hubs for troubleshooting API calls and maintaining a log of common steps to follow.
How Git Works: Explained in 4 Minutes
Linux Boot Process Explained
Almost every software engineer has used Linux before, but only a handful know how its Boot Process works :) Let's dive in.
The diagram below shows the steps.
Step 1 - When we turn on the power, BIOS (Basic Input/Output System) or UEFI (Unified Extensible Firmware Interface) firmware is loaded from non-volatile memory, and executes POST (Power On Self Test).
Step 2 - BIOS/UEFI detects the devices connected to the system, including CPU, RAM, and storage.
Step 3 - Choose a booting device to boot the OS from. This can be the hard drive, the network server, or CD ROM.
Step 4 - BIOS/UEFI runs the boot loader (GRUB), which provides a menu to choose the OS or the kernel functions.
Step 5 - After the kernel is ready, we now switch to the user space. The kernel starts up systemd as the first user-space process, which manages the processes and services, probes all remaining hardware, mounts filesystems, and runs a desktop environment.
Step 6 - systemd activates the default. target unit by default when the system boots. Other analysis units are executed as well.
Step 7 - The system runs a set of startup scripts and configure the environment.
Step 8 - The users are presented with a login window. The system is now ready.Latest articles
If you’re not a paid subscriber, here’s what you missed this month.
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The Evolving Landscape of API Protocols in 2023
This is a brief summary of the blog post I wrote for Postman.
In this blog post, I cover the six most popular API protocols: REST, Webhooks, GraphQL, SOAP, WebSocket, and gRPC. The discussion includes the benefits and challenges associated with each protocol.
Thank you, Abhinav Asthana, Rebecca Johnston-Gilbert, K.C. Patrick 💥 📈, Mackenzie Lawson, Kevin Keene, Ashley Lowe for the great collaboration.
You can read the full blog post here.Explaining the 4 Most Commonly Used Types of Queues in a Single Diagram
Queues are popular data structures used widely in the system. The diagram below shows 4 different types of queues we often use.
Simple FIFO Queue
A simple queue follows FIFO (First In First Out). An new element is inserted at the tail of the queue, and an element is removed from the head of the queue.
If we would like to send out email notifications to the users whenever we receive a payment response, we can use a FIFO queue. The emails will be sent out in the same order as the payment responses.Circular Queue
A circular queue is also called a circular buffer or a ring buffer. Its last element is linked to the first element. Insertion takes place at the front of the queue and deletion at the end of the queue.
A famous implementation is LMAX’s low-latency ring buffer. Trading components talk to each other via a ring buffer. This is implemented in memory and super fast.Priority Queue
The elements in a priority queue have predefined priorities. We take the element with the highest (or lowest) priority from the queue. Under the hood, it is implemented using a max heap or a min heap where the element with the largest or lowest priority is at the root of the heap.
A typical use case is assigning patients with the highest severity to the emergency room while others to the regular rooms.Deque
Deque is also called double-ended queue. The insertion and deletion can happen at both the head and the tail. Deque supports both FIFO and LIFO (Last In First Out), so we can use it to implement a stack data structure.
Over to you: Which type of queue have you used?
A Brief Overview of Kubernetes
Kubernetes, often referred to as K8S, extends far beyond simple container orchestration. It's an open-source platform designed to automate deploying, scaling, and operating application containers.
Where Docker Lags, Kubernetes Excels
Docker revolutionized containerization, making it accessible and standardized. However, when it comes to managing a large number of containers across different servers, Docker can fall short. Kubernetes steps in here, providing a more robust, cluster-based environment for managing containerized applications at scale. It offers high availability, load balancing, and a self-healing mechanism, ensuring applications are always operational and efficiently distributed.Solving the Container Management Puzzle
The primary problem Kubernetes solves is the complexity of managing multiple containers across various servers. It automates the distribution and scheduling of containers on a cluster, handles scaling requirements, and ensures a consistent environment across development, testing, and production.
Kubernetes' Container Runtime Interface (CRI) is a significant leap forward, enabling users to plug in different container runtimes without recompiling Kubernetes. This flexibility means organizations can choose from a variety of runtimes like Docker, containerd, CRI-O, and others, depending on their specific needs.
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by "ByteByteGo" <bytebytego@substack.com> - 11:39 - 2 Dec 2023 -
Net zero must also be net affordable, net reliable, net competitive
The Shortlist
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Curated by Liz Hilton Segel, chief client officer and managing partner, global industry practices, & Homayoun Hatami, managing partner, global client capabilities
COP28 is here. Thousands of CEOs and other leaders have touched down in Dubai to take stock of progress toward net zero and forge ahead to a better future. In this special sustainability edition of the CEO Shortlist, we offer our latest research on one of the world’s biggest problems. We hope you enjoy the read.
—Liz and Homayoun
Let’s get real. The real estate industry accounts for around 40 percent of global emissions. The good news is that the technology to replace oil burners and coal furnaces and dramatically improve energy efficiency already exists. It’s just a matter of deploying it.
How? Check out A new way to decarbonize buildings can lower emissions—profitably, a fresh take by Brodie Boland, Daniel Cramer, Alastair Green, Darya Guettler, Focko Imhorst, and Marita Winslade.
All for one, one for all? Not since Alexandre Dumas has the world hoped for so much from the meetup of three plus one. Emissions reduction is the stated goal of net zero. But companies and society will need to account for three other goals too: affordability, reliability, and industrial competitiveness. What will be the denouement?
En garde. Take a stance with An affordable, reliable, competitive path to net zero, by Mekala Krishnan, Humayun Tai, Daniel Pacthod, Sven Smit, Tomas Nauclér, Blake Houghton, Jesse Noffsinger and Dirk Simon.
Alone, you can go fast. Together, you can go far. When it comes to tackling global warming, cooperation is not just a nice-to-have. But how can we ensure the solutions will justify the considerable effort of rallying disparate entities with competing priorities?
McKinsey’s Sustainability experts have a plan. Get the download in The role of public–private–philanthropic partnerships in driving climate and nature transitions, a new report by Hamid Samandari, Daniel Pacthod, Shally Venugopal, Mekala Krishnan, Tracy Nowski, Adam Kendall, Jared Goodman, and Piers Rosholt.
Seven down, seven to go. The net-zero journey is at a halfway point, seven years after the Paris Agreement and seven years before the 2030 deadline. What progress will this year’s Conference of the Parties bring?
Watch What CEOs can expect at COP28, a McKinsey Live webinar with Cindy Levy and Daniel Pacthod.
We hope you find our sustainability content inspiring and helpful. See you in two weeks with four more McKinsey ideas for the CEO and others in the C-suite.Share these insights
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by "McKinsey CEO Shortlist" <publishing@email.mckinsey.com> - 04:43 - 1 Dec 2023 -
What is the global stocktake?
On Point
Brought to you by Liz Hilton Segel, chief client officer and managing partner, global industry practices, & Homayoun Hatami, managing partner, global client capabilities
•
Focus on fossil fuels. In 2030, countries across the globe are expected to produce roughly twice the amount of fossil fuels than would be allowed under global warming goals set in 2015, according to a new UN report. Phasing out fossil fuels is “one of the pivotal issues” that UN member nations are discussing at COP28, said a scientist and one of the report’s main authors. None of the world’s 20 biggest fossil fuel producers have agreed to limit coal, gas, and oil production to levels consistent with keeping global warming to 1.5°C. [Reuters]
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Cutting greenhouse gases. The global stocktake report outlines four areas in which progress is necessary. One area, mitigation, highlights the need to reduce greenhouse gas emissions by 43, 60, and 84% from 2019 levels by 2030, 2035, and 2050, respectively, to limit global warming to 1.5°C. See our McKinsey Explainer to connect with McKinsey experts—such as senior partner Cindy Levy and colleagues—on the global stocktake and discover what could happen now as UN member states consider the stocktake’s recommendations.
— Edited by Belinda Yu, editor, Atlanta
Introducing Insights to Impact
Be among the first to subscribe to this free newsletter delivering a weekly roundup of analysis that’s influencing decision makers. Each Friday, we’ll offer insights across geographies, industries, and capabilities to help leaders identify new opportunities to spur innovation and growth, sustainably.
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by "McKinsey On Point" <publishing@email.mckinsey.com> - 01:19 - 1 Dec 2023 -
The path to net zero, family-owned businesses, public–private–philanthropic partnerships to address climate change, and more: The Daily Read weekender
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Brought to you by Liz Hilton Segel, chief client officer and managing partner, global industry practices, & Homayoun Hatami, managing partner, global client capabilities
QUOTE OF THE DAY
chart of the day
Ready to unwind?
—Edited by Joyce Yoo, editor, New York
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by "McKinsey Daily Read" <publishing@email.mckinsey.com> - 12:06 - 1 Dec 2023 -
Watch On-demand Webinar: Hear real experiences from Cargill and Nestle about Universal Automation!
Schneider Electric
Watch On-demand
Don't miss the insightful dialogues from Cargill, Nestle, and Gr3N!Want to create hardware-independent automation applications?
Universal Automation is an independent, non-profit organization that enables and promotes a world of Plug & Produce industrial applications, where proven-in-use, vendor-independent software components are plugged together to realize advanced use cases in a cost-efficient and sustainable way, bridge IT and OT, and unleash full digitization of the industry.
Watch our recorded webinar of the panel discussion with UniversalAutomation.org (UAO) and three of their members, Cargill, Nestle, and Gr3n, to learn about the mission of the organization and to hear real experiences and use cases from industrial leaders in their journey towards true Industry 4.0.
© 2023 Schneider Electric, All Rights Reserved. Schneider Electric trademarks are owned by Schneider Electric or its affiliated companies in the United States and other countries. All other trademarks are property of their respective owners.
by "Schneider Electric" <reply@se.com> - 10:01 - 30 Nov 2023 -
Discover the Benefits SmartBear's Open Source Tools Bring to the SDLC
SmartBear
Open-source tooling can be incredibly helpful in the software development lifecycle, with increased transparency and shorter development cycles. The SmartBear Open-Source team is coming together to talk about API Open-Source tools like SoapUI, Swagger, Pact and more.
We are excited to extend this invitation to you to join us next week on December 5. This webinar will be a great way to learn about API open-source tools that can be used in your API development. You will have also an opportunity to connect with developers and get involved in these communities.
You Will Gain Insights into:- How and where to leverage SmartBear’s open-source tools in the SDLC
- The unique features and capabilities of SmartBear’s open-source tools
- How you can connect or get involved with our open-source communities
Hope to see you there!
Regards,
SmartBear API Team
by "SmartBear API Team" <api-lifecycle-team@smartbearmail.com> - 02:53 - 30 Nov 2023 - How and where to leverage SmartBear’s open-source tools in the SDLC
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An affordable, reliable, competitive path to net zero
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by "McKinsey & Company" <publishing@email.mckinsey.com> - 02:12 - 30 Nov 2023 -
COP28: Driving climate action and growth
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Brought to you by Liz Hilton Segel, chief client officer and managing partner, global industry practices, & Homayoun Hatami, managing partner, global client capabilities
New from McKinsey & Company
While there’s been undeniable headway in reducing emissions, the world is not transitioning quickly enough to achieve the goals that societies, governments, and organizations envision. The transition must not only reduce emissions but do so affordably, reliably, and while enabling countries to remain competitive, according to new McKinsey Global Institute research led by Mekala Krishnan, Sven Smit, Humayun Tai, Daniel Pacthod, Tomas Nauclér, Blake Houghton, Jesse Noffsinger, and Dirk Simon. On the kick-off of COP28—two intense weeks to bring our world one step closer to net zero—explore the report and other recent insights on achieving a well-managed transition.
Join our virtual COP28 program to watch live, in-depth, inspiring discussions that drive climate action and growth, and bookmark the Sustainability Blog for daily conference highlights.For daily insights on COP28, visit our McKinsey Themes series.
— Edited by Eleni Kostopoulos, managing editor, New York
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by "McKinsey & Company" <publishing@email.mckinsey.com> - 11:42 - 30 Nov 2023 -
Unlock Highly Relevant Search with AI
Unlock Highly Relevant Search with AI
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The 6 Most Impactful Ways Redis is Used in Production Systems
The Tech Promotion Algorithm: A Structured Guide to Moving Up
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We are considering launching a new ‘How We Built This’ series where we take a behind-the-scenes look at how innovative companies have created scalable, high-performing systems and architectures. Let us know if this is something you’d be interested in reading!
In today’s issue, we are fortunate to host guest contributor Marcelo Wiermann, Head of Engineering at Y Combinator startup Cococart. He’ll be sharing insights into Cococart’s use of semantic search to power new in-store experiences.
How agile teams can leverage LLMs, Vector Databases, and friends to quickly launch cutting-edge semantic search experiences for fame & profit
It’s remarkable how so many things are made better with great search. Google made it easy for normal folks to find whatever they needed online, no matter how obscure. IntelliJ IDEA’s fuzzy matching and symbol search helped programmers forget the directory structure of their code bases. AirTag added advanced spatial location capabilities to my cat. A well-crafted discovery feature can add that “wow” factor that iconic, habit-forming products have.
In this post, I’ll cover how a fast-moving team can leverage Large Language Models (LLMs), Vector Databases, Machine Learning, and other technologies to create a wow-inspiring search and discovery experience with startup budget and time constraints.
Semantic Search
Semantic Search is a search method for surfacing highly relevant results based on the meaning of the query, context, and content. It goes beyond simple keyword indexing or filtering. It allows users to find things more naturally and with better support for nuance than highly sophisticated but rigid traditional relevancy methods. In practice, it feels like the difference between asking a real person or talking to a machine.
Tech companies across the world are racing to incorporate these capabilities into their existing products. Instacart published an extensive article on how they added semantic deduplication to their search experience. Other companies implementing some form of semantic search include eBay, Shopee, Ikea, Walmart, and many more.
Source: Instacart The motivation for embracing semantic search is simple: more relevant results lead to happier customers and more revenue. Discovery, relevancy, and trustworthiness are some of the hardest problems to solve in e-commerce. An entire ecosystem of solutions exists to help companies address these challenges.
Many solutions today rely on document embeddings - representing meaning as vectors. Since semantic search alone may not provide sufficient relevant hits, traditional full-text search is often used to supplement resuts. A feedback loop based on user interactions (clickes, likes, etc.) provides input to continuously improve relevancy.
The key processes are: indexing, querying, and tracking
Document indexing Indexing is done by converting a document’s content to an embeddings vector through a text-to-vector encoder (e.g. OpenAI’s Embeddings API). The vectors are inserted into a vector database (e.g. Qdrant, Milvus, Pinecone). Text-to-vector encoding models like sentence-transformers convert text snippets into numeric vector representations that capture semantic meaning and similarities between text. Documents are also indexed in a traditional full-text search engine (e.g. Elasticsearch)
Query and feedback loop... Keep reading with a 7-day free trial
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by "ByteByteGo" <bytebytego@substack.com> - 11:40 - 30 Nov 2023 -
This month’s Remote Global update features two major announcements, insights on remote work, and an on-demand webinar to boost your contractor skills.
This month’s Remote Global update features two major announcements, insights on remote work, and an on-demand webinar to boost your contractor skills.
november
2023
Featured news
Say hello to Remote Talent: Revolutionizing Global Hiring!
Exciting news for businesses seeking top-notch international talent! Remote has launched Remote Talent, a trailblazing platform designed to transform the way companies recruit and manage global teams. Say goodbye to traditional job boards' limitations and hello to a world of opportunities.
🚀 Ready to expand your team's horizons? Explore Remote Talent Today and unlock the power of global talent! Special launch offer: 90% off your first listing!
New product announcement
Revolutionize Your Freelancing Game with Remote's New Freelancer Hub!
Step into the future of freelancing with Remote's newly launched Freelancer Hub! Designed to streamline your workflow, this all-in-one platform offers customizable contract templates, efficient client onboarding, and a seamless invoicing system. Say goodbye to payment uncertainties with lightning-fast payouts in your preferred currency
Ready to elevate your freelance business? Explore Remote Freelancer Hub today and sign up for free – no credit card required. Transform how you work, get paid, and grow!
Learning and insights
Return-to-office mandates aren’t working: Most workers are ready to quit for a remote job, even if it means a pay cut.
That’s bad news for bosses who are holding onto the hope of a full office return
How Leaders Can Build Stronger Teams Through Better Conversations
Opening up in the workplace can foster trust, improve morale and even drive better business outcomes.
Gen Zers are saying 'no thanks' to promotions for reasons that go beyond money
For years, the corporate path was clear: Work hard and get promoted! Become a manager! Climb the ladder!
On-demand webinar
Watch on-demand: Streamline contractor management with Remote
Dive into our on-demand webinar and unlock secrets to efficient contractor management. Learn how to streamline onboarding, minimize admin tasks, and simplify payments, with insights from Fluz's journey with Remote.
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by "Remote" <hello@remote-comms.com> - 06:47 - 30 Nov 2023 -
[Online workshop] Troubleshooting Applications and back end performance with APM 360
New Relic
Register for this free online workshop on the 14th December at 10 AM GMT/ 11 AM CET for a comprehensive introduction to New Relic APM 360, the cutting-edge solution for modern distributed applications.
APM 360 allows you to get a unified view of critical telemetry data across your stack and development lifecycle. Prevent issues before they escalate and troubleshoot faster with integrated infrastructure monitoring, error user impact analysis, and distributed tracing. APM 360 helps eliminate blind spots with guided workflows, ensuring comprehensive observability.
In this online workshop, you’ll learn how to:
- Use new UI components to troubleshoot, assess user impact, and uncover coverage gaps
- Work with the updated infrastructure table to assess underlying backend issues
- Utilise the new distributed tracing component to quickly assess impacted services
- Explore the error user impact chart
- Determine root cause with errors inbox and error stack traces data
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What is COP?
On Point
Brought to you by Liz Hilton Segel, chief client officer and managing partner, global industry practices, & Homayoun Hatami, managing partner, global client capabilities
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CFOs’ carbon-cutting efforts. Managing climate risk has climbed to the top of C-suite agendas, and many organizations are aiming to cut greenhouse-gas emissions to net zero by 2050. CFOs must ensure that sustainability initiatives are doable from a financial and operational standpoint, and are folded into companies’ greater business plans, according to the senior vice president and CFO of a global energy company’s North American arm. About 30% of CFOs are leading their organizations’ low-carbon transition strategies, a recent UN report has found. [Fortune]
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What happened last. Each year, McKinsey convenes global leaders alongside COP to discuss how to implement ambitious climate goals. Based on conversations with leaders and delegates from COP27 last year, McKinsey attendees saw ten main takeaways to accelerate the net-zero transition. The first is that the private sector has a critical role to play, particularly with cross-business collaboration, global coleader of McKinsey Sustainability Daniel Pacthod and colleagues note. See our McKinsey Explainer “What is COP?” for all ten takeaways.
— Edited by Belinda Yu, editor, Atlanta
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by "McKinsey On Point" <publishing@email.mckinsey.com> - 01:17 - 30 Nov 2023 -
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Generative AI can get a boost from boards
Re:think
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FRESH TAKES ON BIG IDEAS
ON BOARDS AND GEN AI
What are a board’s responsibilities regarding generative AI?Frithjof Lund
Boards are increasingly discussing generative AI (gen AI), but they tend to focus more on the risks than on the business opportunities. The risk side of gen AI is important, of course. In addition to the fundamental risks of business model disruption, there are multiple regulatory, compliance, and governance risks relating to intellectual property, privacy, and data security. There are concerns about the “AI black box”—that is, the lack of transparency around how gen AI arrives at results—and about social biases that may be perpetuated in the data used to train AI algorithms. Accountability for accuracy, the potential for gen AI to stoke misinformation, and even the environmental impact of gen AI’s energy use for data processing all pose additional risks. Given these wide-ranging concerns, boards need to be satisfied that management continually reviews, measures, and audits gen AI activities.
However, it’s even more important for boards to understand the opportunities gen AI presents. This technology has the potential to affect every industry and every part of a company’s operations, including finance, marketing, and strategy. While I do see that some management teams want to move faster on gen AI opportunities than their boards are prepared to, that’s not the case everywhere. Today, boards can catalyze change in the institutions they govern. Often, managers have grown up in one industry or even one company, which gives them a certain view. The board can bring perspectives from other sectors or parts of the world that encourage management to be bolder. By asking the right questions—without crossing the boundary into operational issues—boards can raise management’s aspirations.
Key questions include the following: How will gen AI affect your industry and your company? What is the value at stake? There are already proven, bankable use cases, such as programming, customer engagement, and content creation, in which we see significant productivity increases. Board directors need to understand how this technology affects the competitive environment, because being a front-runner can deliver sustainable advantages.
Another important question boards should ask management is, how will the organization scale gen AI? Here, we can learn from past experiences with technology adoption. In earlier digitization efforts, including process automation and advanced analytics, for example, only one in ten use cases were implemented at scale. This was largely due to people ultimately finding it easier to perform certain tasks the traditional way. We believe the number of scaled applications of gen AI will be even lower. So how do you identify them? How do you organize the leadership structure to guide these initiatives?“In earlier digitization efforts, including process automation and advanced analytics, only one in ten use cases were implemented at scale. We believe the number of scaled applications of gen AI will be even lower.”
The board needs to understand whether an organization has the necessary capabilities, talent, and culture to embrace the changes gen AI requires. This technology will eventually become a commodity. It’s in the organizational capabilities—the change management and cultural adjustments needed to integrate new tools and processes into daily operations—where work has to be done.
Ultimately, directors have to balance the trade-offs between business opportunities and risk management. In numerous discussions with boards, I find only nascent understanding of this technology. To provide oversight and management support, boards will need to build their own capabilities. They can hold deep dive sessions with experts from within or outside the organization. Some boards are testing immersion sessions wherein they work with gen AI tools and explore use cases.
There are also implications for board composition. In the early days of digitization, every board wanted to have one digital director—ideally young, with experience at a major tech company. Most boards have since realized that they actually need a critical mass of directors with digital expertise. Boards also need to consider how to approach oversight. Some are creating technology advisory boards or board committees. Our view is that gen AI will be so fundamental that you will need the entire board to be at least literate in it—you can’t fully outsource it to an advisory panel or a committee.
The question I personally find fascinating is how boards will incorporate this technology into their own work. I can envision directors using gen AI to prepare for meetings or to answer questions they have between them. I think we will see more proprietary, gen AI–powered assistants that help board directors get instant answers. At least one company in Asia has gone so far as to give AI a seat on the board and a vote. That seems extreme to me—until the board gains a high level of trust in the technology, that vote may be challenged—but maybe I’m too conservative.ABOUT THIS AUTHOR
Frithjof Lund is a managing partner in McKinsey’s Oslo office.
MORE FROM THIS AUTHOR
UP NEXT
Ari Libarikian on business building
Now more than ever, CEOs are making the creation of new revenue streams their top strategic priority. Generative AI is a big part of the reason why.
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by "McKinsey Quarterly" <publishing@email.mckinsey.com> - 03:15 - 29 Nov 2023 -
Not all employees are productive. Do you know how to motivate them?
On Point
Brought to you by Liz Hilton Segel, chief client officer and managing partner, global industry practices, & Homayoun Hatami, managing partner, global client capabilities
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Feeling invisible. Employees who think they matter to an organization give their best at work, contributing powerfully to a workplace’s productivity and creativity. But in the era of hybrid work, there’s a risk that workers might instead perceive themselves as anonymous faces on a video screen. Roughly a third of US employees say they feel invisible in the workplace, according to a 2023 survey. One strategy to help employees feel affirmed and recognized is to provide opportunities for workers to form friendships with colleagues. [HBR]
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What lost productivity costs. With the COVID-19 pandemic forcing big changes in how, when, and where people work, companies are struggling to find objective ways to gauge employee effectiveness. It’s a critical challenge as labor costs have increased and worker productivity has declined. Employee disengagement and attrition could cost a median-size S&P 500 company at least $1.1 billion in lost value over five years, McKinsey senior partner Aaron De Smet and coauthors explain.
— Edited by Belinda Yu, editor, Atlanta
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by "McKinsey On Point" <publishing@email.mckinsey.com> - 01:05 - 29 Nov 2023 -
Is your middle manager stuck in the menial?
Five Fifty
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Bogged down by administrivia, middle managers are unable to perform their most crucial task: managing people. Dated assumptions add fuel to the fire, forcing people into roles they aren’t good at and don’t enjoy, say McKinsey’s Emily Field, Bryan Hancock, and Bill Schaninger. It’s time to reenvision the middle tier.
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by "McKinsey Quarterly Five Fifty" <publishing@email.mckinsey.com> - 04:27 - 28 Nov 2023
