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“When looking at the risks of recession, the fact that we’re facing record inflation, and the uncertainty in the business world right now, I think about the challenges that women have always faced and the way they’ve coped with them: having to do more with less, having to be scrappy, and having to bring in perspectives from across organizations. The approaches that women have either been forced to take or have had the impulse to take are going to be incredibly valuable right now in navigating these uncertain times.”

—Julia Boorstin, CNBC senior media and tech correspondent, creator of the Disruptor 50 franchise, and author of When Women Lead: What They Achieve, Why They Succeed, and How We Can Learn from Them (Simon & Schuster, October 2022), in a recent edition of Author Talks.

by "McKinsey Week in Charts" <publishing@email.mckinsey.com> - 03:22 - 29 Oct 2022

Calm leadership through crisis, the new age of industrial technology, and a conversation with CNBC’s Julia Boorstin

Readers & Leaders

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THIS MONTH'S PAGE-TURNERS ON BUSINESS AND BEYOND

Crisis can often trigger reactive behavior, and for good reason: when we’re scared, we stick to what we know. In this edition of Readers & Leaders, take a first glance at the upcoming book Deliberate Calm, a guide to navigating an increasingly complex—and sometimes frightening—world. The right solutions require leaders to practice self-awareness and adaptive decision making, say authors Jacqueline Brassey, Aaron De Smet, and Michiel Kruyt. This week, The Titanium Economy, McKinsey’s new book on the burgeoning industrial sector, hit bookshelves. Earlier this month, CNBC’s Julia Boorstin explained why cultural hurdles have made woman leaders inherently exceptional. Catch more conversations from Author Talks, as well as new reads from this month’s bestselling business books, prepared exclusively for McKinsey by NPD BookScan. Itching for more? Visit McKinsey on Books for the latest, and to get Readers & Leaders in your inbox monthly, click here to subscribe.

AUTHOR TALKS

When circumstances get complicated, having a practice of calm and consciousness can help empower leaders to face challenges proactively, not reactively. Combining cognitive science, consciousness exercises, and more than 50 years of collective boardroom experience, McKinsey senior knowledge expert Jacqueline Brassey, senior partner Aaron De Smet, and former partner Michiel Kruyt offer Deliberate Calm: How to Learn and Lead in a Volatile World. In an upcoming edition of Author Talks, the authors explain how people can confront external uncertainty by first connecting with their inner self.

“Whether there is a particular thing that matters to you or you want to change a particular behavior or you want to learn something new or you want to engage in something difficult that you never did before . . . it’s about having a growth mindset, self-compassion, and kindness. I practice those. One of the things that I personally do is watch my sleep. I work on reframing that and on exercise, mindfulness, and meditation, as well. Be kind. You will make mistakes, and that is an important part of deliberate calm, as well. You have to make mistakes to learn.”

—Jacqueline Brassey, McKinsey senior knowledge expert, in an upcoming edition of Author Talks. Preorder Deliberate Calm: How to Learn and Lead in a Volatile World (Harper Collins, November 2022).

IT BEARS REPEATING

OUT NOW

Industrial-technology companies are leading the American economy into a new era of sustainable, inclusive growth. In The Titanium Economy: How Industrial Technology Can Create a Better, Faster, Stronger America (Public Affairs, October 2022), Asutosh Padhi, managing partner for McKinsey in North America, and coauthors Gaurav Batra and Nick Santhanam reveal how this underrecognized sector—which is responsible for B2B products such as recycled lumber and color enamels—is driving long-term gains in innovation and employment. Order your copy.

“Titanium economy companies have been going about doing what they’re actually good at, which is delivering great returns for their shareholders, taking care of customers, taking care of employees, doing the job around communities, and cleaning the environment—but they have never really found an opportunity to pull it all together and tell the story.” —Asutosh Padhi, managing partner for McKinsey in North America, in a recent edition of Author Talks.

IN CASE YOU MISSED IT

How to turn your work enemies into allies: “You do want to validate part of their perspective—maybe there’s part that you agree with—and then try to get them to contribute in a more constructive way.” Watch the full interview with Amy Gallo.

13 hacks for speeding up bureaucratic slowdowns in work and life: “Bureaucracies don’t have feelings, they have frameworks. You have to find out what forms you need to fill out and what rules you need to follow to make your change happen and do it.” Watch the full interview with Marina Nitze.

What will happen when the era of globalized business ends? “I think that we’ve reached the end of pure economic globalization. Countries are going to have to decide if they share each other’s values. If we don’t, it’s going to become more and more problematic to form trade and business alliances.” Watch the full interview with Rana Foroohar.

How to avoid panicked decision making by remaining focused on the future: “In the current global scenario, it’s really important that we shift away from short-termism to a long-term focus. Making short-term decisions is the equivalent of hitting a rough ice patch in the road and slamming on the brakes.” Watch the full interview with Ari Wallach.

BUSINESS BESTSELLERS TOP

8

Don’t you wish there was trick-or-treating for books? We do too. Get your favorite candy (or some fruit) and check out this month’s top business bestsellers in eight categories, prepared exclusively for McKinsey by NPD BookScan. Explore the full lists on McKinsey on Books.

BUSINESS OVERALL

Atomic Habits: An Easy & Proven Way To Build Good Habits & Break Bad Ones by James Clear (Avery Publishing Group)

BUSINESS HARDCOVER

Atomic Habits: An Easy & Proven Way To Build Good Habits & Break Bad Ones by James Clear (Avery Publishing Group)

DECISION MAKING

Blink: The Power of Thinking Without Thinking by Malcolm Gladwell (Hachette Book Group)

ECONOMICS

Blind Spot: The Global Rise of Unhappiness and How Leaders Missed It by Jon Clifton (Simon & Schuster)

ORGANIZATIONAL BEHAVIOR

Atomic Habits: An Easy & Proven Way To Build Good Habits & Break Bad Ones by James Clear (Avery Publishing Group)

WORKPLACE CULTURE

Who Moved My Cheese? An A-Mazing Way to Deal with Change in Your Work and in Your Life by Spencer Johnson (Penguin Group USA)

DIVERSITY & INCLUSION

Caste: The Origins of Our Discontents by Isabel Wilkerson (Random House)

SUSTAINABILITY

Beloved Economies: Transforming How We Work by Jess Rimington and Joanna L. Cea (Macmillan)

BOOKMARK THIS

If you’d like to propose a book or author for #McKAuthorTalks, please email us at Author_Talks@Mckinsey.com. Given the high volume of requests, we will respond only to those being considered.

—Edited by Molly Liebergall, a digital editor in McKinsey’s New York office

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by "McKinsey Readers & Leaders" <publishing@email.mckinsey.com> - 11:24 - 29 Oct 2022

Preparing for future pandemics, creating value at work, and more big reads for the weekend

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CURATED PICKS FOR YOUR DOWNTIME, FROM OUR EDITORS

Joyce Yoo
Digital Editor, New York

Are you ready for the weekend? Take a moment to unwind and catch up on this week’s big reads on getting ready for the next pandemic, creating value at work, how hydrogen can help the world reach net-zero emissions, and more.

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Are public health systems ready for the next pandemic? Lieven Van der Veken, Matt Wilson, and their coauthors detail four areas where governments can focus their efforts to prepare.

Improve preparedness

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What’s the difference between doing work and creating value at work in an agile context? Christopher Handscomb and his coauthors explore four ways companies can shift their focus from productivity to value.

Be thoughtful

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Bernd Heid and his coauthors present five charts which show how hydrogen could play a key role in a low-carbon future.

Maximize the potential

Our weekly briefing note on sustainable and inclusive growth explores how the public sector can fight climate change, holiday shopping, cars becoming smartphones on wheels, and more.

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Quote of the day

“The most important thing is to be honest about where mental health and well-being sits on the hierarchy. If it’s up among the top key priorities for business as I think it should be, then put structure and responsibility around it—as you would with other priorities for your business.”

—Sam Harvey, professor of psychiatry from University of New South Wales on the stigma of mental health in the workplace in “Building a mentally resilient workforce”

Chart of the day

Chart of total shareholder returns during the 2007-2009 financial crisis

How well do you know the numbers behind the changes in business, society, and the world? Take the McKinsey weekly quiz to find out.

ready to unwind?

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Data Points: Your weekly quiz

Take the quiz

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What is diversity, equity, and inclusion?

The answer to this question—and others—is available in our new McKinsey Explainers series. Early access to the full series is available exclusively on our Insights app.

Learn and grow

34-Across: Like many companies these days ... and like the answers to the six asterisked clues

Know the answer? Test yourself with the latest McKinsey Crossword, All In | No. 99.

Embrace inclusion

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OUR BEST IDEAS, QUICK AND CURATED | OCTOBER 28, 2022

by "McKinsey Daily Read" <publishing@email.mckinsey.com> - 06:30 - 28 Oct 2022

Webinar: Sangoma 3rd Party Integration: All You Should Know

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In this complimentary webinar we will showcase Sangoma's seamless integration with 3rd party business tolls like MS Teams. In this 60 minutes webinar, our business and technical experts will explain updated features and benefits that your business will get with this integration.

Discussion Points:

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by "Sangoma Technologies" <webannounce@sangoma.com> - 06:02 - 28 Oct 2022

How Europe’s CEOs can push through swirling economic currents

The Shortlist

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Edited by Barbara Tierney
Senior Editor, New York

This week, how Europe’s business leaders can place smart bets on the future. Plus, e-scooters get a leg up with investors, and Tech for Execs on the importance of creating a cloud “sandbox” for developers.

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Continental drift. Inflation is rising, business signs are weakening, war is continuing, winter is coming: Europe at the tail end of 2022 is facing headwinds that make the future more difficult to imagine than usual. An energy crisis, born of the Ukraine conflict , threatens to derail the net-zero transition . Semiconductor shortages and labor shortages remain. The latest McKinsey scenarios, undertaken in partnership with Oxford Economics , suggest that European GDP will most likely contract overall in 2023.

Growth mindset. Today’s European business leaders are accustomed to crisis, given the era’s myriad monetary and political tests (not to mention a global pandemic). In an article on this defining moment, senior partners Hemant Ahlawat , Homayoun Hatami , María del Mar Martinez and their colleagues write that to flourish, European organizations have to understand that playing defense in a volatile environment isn’t enough. Businesses must anticipate and respond to crises and opportunities, placing smart bets on the future—even a murky one.

Gaming out scenarios. One concrete way to augment organizational resilience is by scenario planning rather than forecasting, which has failed to capture recent events such as supply chain problems. Scenario narratives can be developed and stress-tested in analytics-based simulations and connected to early-warning systems based on key indicators. For instance, a leading automotive company created two hypothetical scenarios—a technological disruption and a market breakdown—then assessed the potential impact of each scenario on the business. The analysis suggested that up to 60 percent of sales losses could be mitigated, leading to a decision to diversify geographically, among other solutions.

Fluid analysis. Analytics and data are key to this approach, as we saw during the 2008–09 crisis, when financial institutions responded to stress-test requirements. Like then, companies can widen the scope of their scenario planning by creating triggers and regularly revisiting and adjusting their goals as the environment changes. A one-time analysis won’t be enough.

Betting on future growth. European business leaders face a deeply unsettled economy, with potentially existential risks for those companies with weaknesses in their balance sheets and business models. We see this in the technology arena, where Europe is vulnerable across all sectors on growth and competitiveness , hindering long-term resilience and jeopardizing future growth and strategic autonomy. Reacting swiftly during a downturn can position companies to grow more over the long term. Given seismic events within its own continent, a robust Europe is needed now more than ever.

Off the charts

Investors get a kick out of e-scooters

Since the start of the COVID-19 pandemic, micromobility companies (those providing bicycles, mopeds, and e-kickscooters) in Asia, Europe, and North America have captured nearly $4 billion in investments. The share of those investments going specifically to e-kickscooters jumped 50 percentage points from 2018 to 2022, McKinsey analysis shows.

Chart of publicly disclosed investments into electric-mobility companies

Check out our chart of the day here.

INTERVIEW

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Toxic no more: How to finally address employee burnout

A recent McKinsey Health Institute report on employee burnout finds that one out of four employees around the globe experiences toxic behavior in the workplace. Some suffer through it in silence; some lash out; some just leave. In a recent interview with McKinsey, Tessa West, New York University psychology professor and author of Jerks at Work: Toxic Coworkers and What to Do About Them, discusses the cognitive, emotional, and physiological effects that workplace toxicity can have on individuals and their coworkers, and how stress can “cascade” through the organizational levels. She also talks about strategies for identifying and tackling toxic behaviors and related stress on personal and systemic levels.

More on McKinsey.com

Winners take all in global apparel, fashion, and luxury | Luxury and sportswear have delivered consistently high returns to retailers through turbulent years. But outliers from other categories offer insights into how companies can outperform in a volatile global apparel market.

Managing software cybersecurity risks | As software-related vulnerabilities continue to grow, companies need new programs and management techniques to innovate faster and to create safer, more secure digital products.

Embedded finance: Who will lead the next payments revolution? | Customer loyalty apps, digital wallets, accounting software, shopping-cart platforms: the possibilities for embedded finance keep growing. Here’s how incumbents and new entrants can claim a share of the market.

TecH for execs

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Ready to play in your sandbox?

Our experts serve up a periodic look at the technology concepts leaders need to understand to help their organizations grow and thrive in the digital age.

What it is. A cloud development environment, or “sandbox,” is a dedicated area where software developers can develop code to be deployed to users quickly. It can be created in minutes via infrastructure as code (IaC) automation.

Why it’s important. Companies are looking to increase the clock speed of their organizations. How quickly developers can create and deploy code is a critical component in enabling the business’s overall speed.

In the past, developers would develop directly on their laptops. While that approach can work in isolated cases with a small number of teams, it does not scale. Problems include nonstandardized tooling, underpowered laptops unable to process and run big data, and bug-ridden code that worked locally on a developer’s laptop but not when deployed more broadly.

Development environments, or sandboxes, solve these issues by being a self-service model. Development teams (sometimes called agile pods or squads) can set one up within a broader cloud environment, with standardized tools (used to develop, store code, test, package, and deploy code), dedicated memory, and compute capabilities, as well as access to data.

What you can do about it. Developing an effective self-service sandbox capability can be daunting for some engineers, given its complexity. Talk to your chief information officer about internal developer platforms (IDPs), a capability that simplifies the process of provisioning infrastructure, security, and tooling through a user-friendly interface. And ask whether the platform engineering team can provide a set of standardized common tools that all sandboxes can take advantage of, such as asset repositories, testing tools, or even standardized monitoring tools.

What technology concepts would you like us to help explain next? Let us know.

Share this Tech for Execs

BACKTALK

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TODAY’S NEWS. TOMORROW’S INSIGHTS.
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by "McKinsey Shortlist" <publishing@email.mckinsey.com> - 02:26 - 28 Oct 2022

Why is corporate growth so difficult to achieve?

On Point

Edited by Alexandra Mondalek
Associate Editor, New York

Growth kit

In the news

•

Resilience starts now. A recent CEO survey indicates that 98% of executives expect a global recession to come in the next several months. There’s less consensus, however, about how long a downturn might last and how severe it might be. Seemingly contradictory economic signals—such as increased consumer spending in spite of high inflation—also make predicting the future more difficult than usual. Given the ambiguity, executives are adopting a range of measures, including closing offices, to shore up business resiliency. [Fortune]

•

Recession proof? Warehouses are a bright spot in the logistics business—and the broader economy—despite some industry leaders warning of economic headwinds. While rents for warehouses soar, they remain, at 6%, only a fraction of a company’s supply chain costs. Meanwhile, the cost of transporting goods makes up roughly half of such expenses. The big-box boom that’s expanding warehouse demand can be polarizing, though: some claim it is further damaging the environment, while others say that new warehouse jobs are a boon for local economies. [Economist]

A typical company grew at a measly 2.8% per year during the ten years preceding the COVID-19 pandemic.

On McKinsey.com

•

The ‘growth code.’ A study of 5,000 of the world’s largest public companies over the past 15 years reveals that creating a business that has healthy, sustainable growth is difficult to achieve. From 2009 to 2019, only one in eight of those organizations grew more than 10% per year. To help companies buck these trends, McKinsey partners Chris Bradley and Rebecca Doherty and their coauthors outline ten rules for achieving growth. For example, periodic pruning of slow-growing areas of a business and reinvesting the proceeds into new areas can jump-start growth.

•

Grow where you know. A successful company must both excel in its core offering and create adjacent business areas that may complement the original product or service. Companies that grow into related industries in a way that makes their portfolios more similar earn an additional one or two percentage points of TSR every year. In a slowing global economy, with inflation and geopolitical uncertainty on the rise, see all ten rules for growth that business leaders should know.

Learn the ten growth rules

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AN ARTICLE A DAY, PICKED BY OUR EDITORS

by "McKinsey On Point" <publishing@email.mckinsey.com> - 12:43 - 28 Oct 2022

Quiet quitting and performance management

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Digital Editor, New York

Performance management is always tricky—but this year, managers are staring down a particularly daunting set of challenges. Worn-out workers. Weakening work relationships. Quiet quitting, compounding two-plus years of record regular-old quitting. Inflation. And for some, maybe that means “you won’t have the difficult conversation because the thought of losing another employee is devastating,” as senior partner Bill Schaninger puts it. If year-end has you worried, don’t miss this new episode of the McKinsey Talks Talent podcast, where Bill speaks with Bryan Hancock, global lead of McKinsey’s talent work, about the trends that have managers on edge—and how to handle them.

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Quiet quitting and performance management

Churn is up. Engagement is down. And year-end reviews are here. Are you worried that giving feedback will make workers feel worse?

Understand the disconnect

Quote of the day

“You make a lot of mistakes. And the most important thing is you recognize you made a mistake, and you correct it as fast as hell and go on. And then don’t think too much about it. Focus on going forward.”

—Peter Carlsson, cofounder and CEO of Northvolt on the journey of building a green business in “Giga-scaling low-carbon batteries: A chat with Northvolt CEO Peter Carlsson”

Chart of the day

Chart detailing that bisexual and transgender employees are more likely than other surveyed employees to report experiencing microaggressions at work.

Our latest research shows that luxury shoppers in Japan are using online channels while also holding fast to the in-store experience. How can brands thread the needle?

ALSO NEW

Japanese luxury shoppers are embracing omnichannel

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Identifying opportunities and starting to build a new green business in the industrial sector

As climate change intensifies, industrial companies will need a new approach for developing sustainable products and services.

Chart the path forward

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Reshaping retail banks: Enhancing banking for the next digital age

The current model of universal retail banking is unsustainable over the long term. To thrive, banks need to reinvent themselves, focusing on businesses where they can achieve and extend market leadership in the new digital world.

Reshape the operation

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The 2022 State of Software Quality | API Survey

by "McKinsey Daily Read" <publishing@email.mckinsey.com> - 06:14 - 27 Oct 2022

Our Annual API Survey Trends Survey is Here. Help Us, and You’ll Help Others!

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by "Molly from Smartbear" <readyapi-team@smartbearmail.com> - 10:41 - 27 Oct 2022

Webinar: Understanding Mobility-as-a-Service - the Future of Urban Mobility

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What is mobility-as-a-service (#MaaS) and why does it affect us all? Public transport, car sharing, cabs, Uber - the mobility of the future will be versatile. But how will the experience of getting from A to B be a smooth ride, how does it work behind the scenes, and most importantly, what does our mobile future look like?

On November 10, Nick Maynard, Head of Research at Juniper & Erick Burgueño Salas, research expert for mobility and logistics at Statista will present a comprehensive view of the Mobility-as-a-Service market, how it works in practice, the key trends and what the future holds. The webinar will also examine Juniper Research’s data on the MaaS market and will include a question and answer session to have your say. The 45-min webinar will focus specifically on:

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Moderated by Steph Smith, Head of Global Mobility Growth, the presentations by Kirsten Wright, our Head of Global HR Services and Graeme McKechnie our Head of Global Employer Solutions, covered the following areas of discussion:

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ADAS and DMS - White Label GPS Tracking Software

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by "Jignesh Pardeshi" <official@uffizio.in> - 01:00 - 27 Oct 2022

Relationships at work are fraying. What can organizations do to rebuild social capital?

On Point

TODAY’S NEWS. TOMORROW’S INSIGHTS.
A daily newsletter from McKinsey & Company

Edited by Belinda Yu
Editor, Atlanta

Strengthening social capital

In the news

•

From loathing to liking. That annoying colleague? There’s probably something you can learn to like about them. After all, connection is what the divided world seems to need, says a psychology professor who studies existential isolation. Having a shared experience with someone and thinking that you’re both responding to it in similar ways helps bring people together, research shows. To try it, ask the coworker who frustrates you to hang out, and pick a bonding activity such as going to a sporting event or a concert. [WSJ]

•

Best friends. Having close friendships at work makes life more fun—it’s also tied to important business outcomes, a 2022 Gallup study has found. People who have best friends at work are more likely than those who don’t to say that their companies are great places to work and to feel extremely satisfied with their jobs. They’re also less likely to be looking for a different job. To encourage workplace friendships, bosses can pair up new joiners with veteran workers who can help them get up to speed quickly. [HBR]

“Even when we looked at US workers’ connections outside of their company networks, less than 20% felt that those had grown.”

On McKinsey.com

•

Connectivity is crucial. Connectivity in the workplace is crucial for helping workers learn, innovate, and advance. But access to social capital is dwindling in today's workplaces, explain McKinsey senior partner John Parsons and partner Brooke Weddle. Fewer than 15% of employees report that their networks have grown since the start of the COVID-19 pandemic, according to a McKinsey survey of around 5,500 US workers from March 2022. Only around a fifth of employees feel more connected to people in their company network.

•

The ties that bind. External ties are weakening, too: fewer than 20% of workers say that their connections outside of company networks have grown, McKinsey research shows. But there’s a lot that organizations can do to help rebuild connections. For example, they can educate employees on the importance of developing different kinds of social capital. Workers may not know that even weak ties can link them to different parts of an organization and open up new opportunities. Listen to the podcast for ways to rebuild social capital.

Understand social capital

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AN ARTICLE A DAY, PICKED BY OUR EDITORS

by "McKinsey On Point" <publishing@email.mckinsey.com> - 12:35 - 27 Oct 2022

How to maintain a ‘Longpath’ mindset, even amid short-term crises

Harmony Internal - McKinsey

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Edited by Katherine Tam
Digital Editor, New York

How can we make decisions that both we and our future generations can be proud of? Whether we are dealing with a global crisis or a work assignment, how can our solutions be focused on the long term, as opposed to reacting in the moment? In a recent Author Talks interview, futurist Ari Wallach talks about the importance of a “Longpath” mindset, which shifts away from short-termism and balances the past, the present, and the future. Check it out and become an ancestor our future needs. And for more on leading with awareness and intentional choice, be sure to preorder the upcoming book Deliberate Calm by McKinsey authors Jacqueline Brassey , Aaron De Smet , and Michiel Kruyt.

Author Talks: How to maintain a ‘Longpath’ mindset, even amid short-term crises

Future-thinking strategist Ari Wallach provides a tool kit for acting less like a descendant and more like an ancestor.

Balance the past, present, and future

Quote of the day

“If companies don’t take action, they risk losing not only their current women leaders but also the next generation of women leaders.”

—Check out the latest Women in the Workplace report from McKinsey, in partnership with LeanIn.Org

Chart of the day

Chart of distribution of total shareholder returns by industry

Despite continued economic uncertainty, US shoppers are looking forward to spending for the holidays. Retailers that offer good value will come out on top.

ALSO NEW

US holiday shopping 2022: ’Tis the season to be (cautiously) optimistic

Get ready to spend

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The gathering storm: The threat to employee healthcare benefits

US inflationary pressures could significantly raise annual employer healthcare costs and impact vulnerable household finances.

Learn more

Building sustainability into operations

The path discrete manufacturing companies have taken to make their operations carbon neutral has important lessons for any business pursuing the dual mission of profitability and sustainability.

Enable the transformation

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Companies today should build workplaces that help them realize their strategies. Here’s why and how.

by "McKinsey Daily Read" <publishing@email.mckinsey.com> - 06:37 - 26 Oct 2022

How real estate is changing

Re:think

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ON REAL ESTATE

What is the future of workplace and retail real estate?

Federico Marafante

Let’s start by thinking about the occupiers—for example, the companies that own or lease space for their employees. They will need to reorient their real estate strategies for competitive advantage and try to identify the moments that matter for coming together in person again. Because after COVID-19 began, flexible became a key part of how we work—and that way of working is here to stay.

At the same time, the human touch and physical presence are still needed, but they have a very different purpose now versus in the past. For instance, if employers want to strengthen employee connections, improve social capital, onboard new hires, or evaluate potential acquisitions, maybe for these types of activities, it still helps to be together in the same place.

But these places won’t be the same old offices as we thought of them before. They might include “third places,” such as coworking locations or on-demand meeting and event spaces, both of which could be combined with personalized services.

Now let’s think about the future of the workplace from the owner and/or operator perspective, where there are different considerations. Not only will there be a reduction in demand for traditional offices, but much of today’s office space won’t meet the flexibility and experience needs of future occupants and workers. As a result, there could be both an oversupply of space and a scarcity of offices purpose-built for flexible work.

Can you imagine, for instance, a big, open space with hundreds of people, and most of these people are on videoconferences with colleagues who are somewhere else? I mean, that would not be sustainable. Offices need a completely different layout, in line with the needs of the flexible and remote world. You’ll need individual offices, though maybe not just for one person. Instead, these would be bookable for when you are in the office. You need centers of gravity, where colleagues can connect effortlessly. You need integrated employee experience applications that make it easy to coordinate with both on-site and off-site peers and reserve gathering spaces, hospitality services, and technology support as required. Community managers should be available to engage and support employees across the physical office and virtual workplace.

“We have seen some companies reduce their office portfolio costs by 60 or 70 percent, in the most ambitious cases.”

Most companies were already making strides toward efficiency even before COVID-19, but the pandemic and flexible work accelerated things even more. From a remote-working survey that we ran in 2020, we learned that most leaders planned to save an average of 20 to 30 percent on real estate because of remote working. But we have seen some companies reduce their office portfolio costs by 60 or 70 percent, in the most ambitious cases.

Given these real estate savings, leading companies are reinvesting this surplus to do a true leapfrog in terms of technological tools and employee experience. Some companies are already investing in cutting-edge technologies, including digital twins and augmented reality, that can help employees work smarter and with a greater sense of connectivity.

Real estate decisions are increasingly linked to people and organization. In the past, real estate and facilities management was typically under the CFO and sometimes under the CEO. Since the pandemic, we have seen the work in this area shifting more to human resources. HR is no longer just about HR processes, strategic workforce planning, and performance management. Today, HR encompasses creating the best environment for talent to help make people both happy and productive.

We can draw some comparisons between the changing workplace and what’s happening in retail. Just as during the pandemic many of us worked from home, we also embraced shopping from home. Now, we are partially back to offices and partially working from home, and we are reexamining the purpose of the office. If you think about retail outlets, it’s more or less the same.

We lived for a couple of years buying everything online. But today, in general, 60 to 70 percent of consumer shopping is done in an omnichannel way, which means that maybe I go to a physical shop to check things out and then I order online. If retailers are able to reimagine their footprint in a way that is designed for omnichannel, they will have a new value proposition with a variety of formats. The main lesson from what happened in the pandemic and from the new way of shopping is that the experience, not just the product, will make the difference.

The changes that have occurred in the new world of work and to the workplace are totally unprecedented. One thing that is a pity is that for many CEOs and entrepreneurs, their own personal style is affecting a lot of the decision making around going remote or not. They are often deciding what to do based on their preferences. But leaders can base these decisions on a more scientific approach.

ABOUT THE AUTHOR

Federico Marafante is a partner in McKinsey’s Milan office, where he leads the People & Organizational Performance Practice in the Mediterranean region. He works on real estate issues and on the design of organizational and distribution models.

MORE FROM THIS AUTHOR

Workplace real estate in the COVID-19 era: From cost center to competitive advantage

3 steps for transformation

UP NEXT

Maria Valdivieso de Uster on B2B sales during turbulent times

As inflation and economic uncertainty loom, companies can accelerate B2B sales growth by being flexible and nimble.

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by "McKinsey Quarterly" <publishing@email.mckinsey.com> - 02:13 - 26 Oct 2022

[Demo] How to use New Relic to improve Performance, Reliability and Scale

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by "EMEA Marketing" <emeamarketing@newrelic.com> - 05:36 - 26 Oct 2022

Women are going through a "Great Breakup" with work. What should employers know?

On Point

TODAY’S NEWS. TOMORROW’S INSIGHTS.
A daily newsletter from McKinsey & Company

Edited by Belinda Yu
Editor, Atlanta

Women in the workplace

In the news

•

Going gray. In an era of more casual workplace attire, many women are ditching their hair dyes and letting their natural hair color show. Sporting gray, white, and silver hair, some women say, is a way to push back against stereotypes about older workers. Bias against older people is real, says one expert on ageism. Even young toddlers adopt the belief that older people are less competent. For women, who are often seen as less capable than their male coworkers, that can create even more pressure to look youthful, another researcher says. [WSJ]

•

The dark side of confidence. Women’s failure to move up the career ladder is regularly blamed on a lack of self-confidence. But when women act assertive, they’re also often seen as overcompensating or acting inauthentically. Confidence is a gendered concept, say academic researchers, and one that’s frequently used to blame women for a lack of advancement at work. To address this, leaders should stop talking about confidence in performance reviews and help women find tangible ways to build workplace skills. [HBR]

Only one in four C-suite leaders is a woman, and only one in 20 is a woman of color, finds McKinsey’s Women in the Workplace 2022 report, in partnership with LeanIn.Org.

On McKinsey.com

•

The ‘Great Breakup.’ Women leaders in corporate America are leaving their jobs at unprecedented rates, say McKinsey senior partners Alexis Krivkovich and Lareina Yee and coauthors. With companies already struggling to retain women managers—who are more empathetic and inclusive—that could have serious implications. Compared with men, women leaders are much more likely to leave their roles because they want flexibility or want to work for companies that are committed to worker well-being and diversity, equity, and inclusion (DEI).

•

Stretched thin. Women leaders put in more work to foster employee well-being and support DEI efforts when compared with men. But even though that work dramatically improves employee satisfaction and retention, it often goes unrecognized. In fact, 40% of women leaders say their DEI work isn’t noted at all in performance reviews. Young women are even more likely than current women leaders to say they want workplaces that offer them flexibility and support employee well-being. Learn three major reasons women leaders are switching jobs.

See the three reasons women leave

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AN ARTICLE A DAY, PICKED BY OUR EDITORS

by "McKinsey On Point" <publishing@email.mckinsey.com> - 12:18 - 26 Oct 2022

Tech at the edge: Trends reshaping the future of IT and business

Harmony Internal - McKinsey

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Edited by Emily Adeyanju
Digital Editor, Charlotte

The latest cutting-edge technology developments could mean a boom for business. New technological advances don’t just enhance power, speed, scale, and AI capabilities; they also deliver greater bandwidth at lower costs. These technology developments have significant implications for companies and IT, from how to scale innovation to how companies rethink digital trust. So how can companies not just keep pace with the latest technologies, but harness them most effectively to be competitive? To learn about the four key implications shaping the future of IT and what changes companies need to think about, check out a new article by McKinsey senior partner Steve Van Kuiken.

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Tech at the edge: Trends reshaping the future of IT and business

With technological change accelerating, companies need to make four fundamental shifts.

Get ready

Quote of the day

“When you think about relationships that form the bonds around social capital, those relationships can be homogeneous, meaning they can lead to silos in an organization or, to use a very informal term, cliques.”

—McKinsey partner Brooke Weddle on social capital in a recent episode of The McKinsey Podcast

Chart of the day

Chart detailing that inflation has had an adverse impact on most property and casualty lines of insurance

Browsing and shopping directly on social media platforms is a core feature of e-commerce in China. Now, this dynamic new way of buying is poised for rapid growth in the United States.

ALSO NEW

Social commerce: The future of how consumers interact with brands

Future of e-commerce

Disaster recovery: Lessons from around the world

Our analysis charts a path from disaster to recovery by identifying the building blocks of six successful recoveries from around the world.

Take steps now

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How to build a unicorn: Lessons from venture capitalists and start-ups

New data highlights five things incumbent businesses could learn from venture capitalists and unicorns.

Attract VC funding

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