Where is everybody? A leader’s guide to the office of the future.

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ESSENTIALS FOR LEADERS AND THOSE THEY LEAD

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

The COVID-19 pandemic sparked debate about the role of the traditional office, but the workplace transformation that it triggered also raised the broader issue of physical spaces in general. What will the places in which people live and work look like a few years down the road? With the commercial-real-estate market in flux, and with many employees working remotely or in hybrid situations, leaders may need to take a new look at office space and think about how to redesign it for optimal networking, collaboration, and connectivity both now and in the future. Here are some factors to consider.

AN IDEA

Imagine your workplace in 2030

Chances are that the traditional office tower may morph into a markedly different structure in the next decade. Leaders may want to think of buildings not as just four walls but as places for communities and experiences, suggests McKinsey senior partner Aditya Sanghvi in a video on how high-rises may evolve in the next few years. “The high-rise of the future isn’t just office for 50 floors,” he says. “It’s office for ten floors; it’s multifamily for 15; it’s a hotel for ten; it’s a club area at the top of the building. And that, to us, is the real future of the high-rise.” With a people-centric orientation, the buildings of the future may also offer a range of amenities, such as cleaning services, childcare, eldercare, and pet grooming. “We don’t believe that it’s possible for the world to go back to the way that it was,” says Sanghvi. “The [organizations] that will be the most successful will be the ones that carefully monitor exactly how our behaviors have changed already and how they will continue to change.”

A BIG NUMBER

6

That’s the number of new imperatives that real-estate operators and investors may need to deal with in the coming years, suggest McKinsey senior partner Daniele Chiarella and colleagues. Facing pressures from increasing inflation, rising interest rates, climate change, and evolving patterns of office attendance, real-estate companies can no longer rely on building or buying assets that are just physical spaces. Rather, they need to consider helping tenants create workplaces that offer a competitive advantage: “In office buildings, this new mandate means partnering with employers to understand how they want their employees to use spaces,” the McKinsey experts say.

A QUOTE

“Much of today’s office space won’t meet the needs of tenants and workers in a hybrid world.”

That’s McKinsey senior partners Vaibhav Gujral and Rob Palter and colleagues in an article on the urgent need for office space to be configured differently from how it has been in the past. “The traditional allocation of 70 percent of space to desks and offices needs to be fundamentally challenged,” they say. Given a potential “oversupply of space and a scarcity of offices purpose built for hybrid work,” the authors urge real-estate operators and tenants alike to consider such amenities as smart conference spaces, collaboration areas, and “a food-and-beverage ecosystem of restaurants, lounges, cafeterias, [and] pantries, all digitally accessible.” Biophilic design—incorporating natural elements, such as organic shapes and vegetation, into built environments—also improves employee experience.

A SPOTLIGHT INTERVIEW

Sid Sijbrandij, cofounder and CEO of GitLab Inc.

For open-source software development company GitLab, office space is a nonissue: the organization has been fully remote from its inception in 2011. Despite the absence of a physical footprint, GitLab has instilled close connectivity and a highly collaborative culture among its employees, according to cofounder and CEO Sid Sijbrandij. “We invest in working practices that enable asynchronous communication, and we’ve committed to educating and supporting other companies through the global transition to remote work,” he says in a discussion with McKinsey. For example, all changes that the organization’s developers make are documented and kept up to date in an online handbook that is available to the public. Meetings have clear agendas, and issues are resolved with “clear next steps, owners, and delivery dates,” Sijbrandij explains.

CORNERED

Long seen as a status symbol, the coveted corner office has gone the way of most other office staples. As office spaces become more flexible and dynamic, top executives may no longer have private offices. While they may still have access to enclosed spaces, those spaces are likely to be communal and used by other in-office workers when available. The amenities and perks that some companies promised workers to lure them back to the office have turned out not to mean as much when offered in isolation rather than as part of a more thoughtful, inclusive design. Employees place a high value on purpose, collaboration, and community. A state-of-the-art gym alone can’t offer this, which is why the office of the future will need to be closely aligned to organizational strategy and purpose and designed to support innovation, productivity, and employee engagement.

Lead by using space well.

— Edited by Rama Ramaswami, senior editor, New York

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by "McKinsey Leading Off" <publishing@email.mckinsey.com> - 02:20 - 29 May 2023

The week in charts

The Week in Charts

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ALL THE WEEK’S DATA THAT’S FIT TO VISUALIZE

Our McKinsey Chart of the Day series offers a daily chart that helps explain a changing world—as we strive toward sustainable and inclusive growth. In case you missed them, this week’s graphics explored tech workers’ priorities, negative effects of social media on Gen Z, risks to global economic growth, employees’ mental health, and decarbonizing the chemical industry.

FEATURED CHART

Show me the advancement potential

This week’s other select charts

Social media struggle is real for Gen Z

Moving on from the pandemic?

Gauging employees’ mental health

Full steam ahead

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by "McKinsey Week in Charts" <publishing@email.mckinsey.com> - 03:09 - 27 May 2023

Are you taking enough risks? (You’re probably not.)

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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McKinsey Classics | May 2023

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Increasing your appetite for risk

Amid today’s ever-changing volatility, it’s all companies can do just to stay grounded. From rising interest rates to supply chain constraints to concerns of a looming downturn, what possible room could there be for companies to take any investment risks?

Over a decade ago, businesses, still reeling from the lasting effects of the financial crisis, found themselves in a similar situation. And while conventional wisdom (including our own) typically warns against overconfidence, our authors at the time wrote that a referendum on risk aversion was in order. To wit, organizations that are unaware of the biases that can lead managers to avoid uncertainty, even when the potential earnings far outweigh the losses, face an even greater risk: stifling growth and innovation. Companies need both now more than ever.

Midlevel managers making routine investment decisions are uniquely positioned to shift how their companies approach risk, and easing the burden of risk aversion can be a strategic advantage. For more on how businesses can identify risk aversion and root out the biases that can stymie potential investment projects, read McKinsey partner Tim Koller’s 2012 classic “Overcoming a bias against risk.”

—Drew Holzfeind, editor, Chicago

Take more risks

Related Reading

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Sean Brown, Celia Huber, Ida Kristensen, and Asutosh Padhi, “The board’s role in building resilience”

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Carolyn Dewar, Scott Keller, Vikram Malhotra, and Kurt Strovink, “Actions the best CEOs are taking in 2023”

Eileen Kelly Rinaudo, Tim Koller, and Derek Schatz, “Bias Busters: A better way to brainstorm”

Did You Miss Our Previous McKinsey Classics?

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Getting executive transitions right

As more corners of the corporate world increasingly become “table stakes,” executive transitions are about the biggest bet a company can make.

Focus on impact, not timing

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by "McKinsey & Company" <publishing@email.mckinsey.com> - 11:21 - 27 May 2023

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Competing in the age of digital, leading with humanity, and defending your right to cognitive liberty

Readers & Leaders

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THIS MONTH'S PAGE-TURNERS ON BUSINESS AND BEYOND

What does it really take to make a digital transformation work? In this edition of Readers & Leaders, McKinsey senior partners Eric Lamarre, Kate Smaje, and Rodney Zemmel—authors of the forthcoming book Rewired: The McKinsey Guide to Outcompeting in the Age of Digital and AI—discuss how companies can build and flex their rewiring muscle by leveraging the power of AI, enhancing customer experience, and driving profitability through an ever-evolving process of transformation. In our other featured interviews, retired United Airlines chairman and CEO Oscar Munoz tells his story of personal survival and corporate revival, Duke professor Nita Farahany examines the promise and perils of neurotechnology developments, and University of Oxford professor Paulo Savaget shares why unconventional approaches to problem-solving may bring the most positive results. Itching for more great reads? Check out McKinsey on Books for the latest, and don’t miss this month’s top bestselling business books, prepared exclusively for McKinsey by Circana.

What are you reading this summer? If you can’t get away from it all in a literal sense, you can always escape in a good book—and we want to know which one. Let us know what’s on your bookshelf, and we’ll let you know what’s on ours. Stay tuned for our annual reading list, coming this summer.

IT BEARS REPEATING

Photo of McKinsey senior partners Eric Lamarre, Kate Smaje, and Rodney Zemmel .

“One of the things that annoys me about the term digital transformation is it has this connotation that at some point, I am done. I tick the box. We all pat each other on the back. And off we go to whatever is next. I don’t think you’re ever done with digital transformation. For me, it’s to try and get across this notion that this is a journey; it’s a muscle that you’re constantly building, you’re constantly honing, to get better. … I think when you look at some of the best transformers out there, they are transforming. They’re never done.”

— Senior partner Kate Smaje in a recent edition of Author Talks.

IN CASE YOU MISSED IT

Retired United Airlines chairman and CEO Oscar Munoz discusses the human aspect of leadership: “The concept of me going out and listening to everybody was how we developed our strategy. It was important to appeal to their sense of strong professional pride, and then match that pride with the resources, procedures, and alignment that they needed to actually do their job.” Watch the full interview.

Duke professor Nita Farahany offers insight into the burgeoning discipline of neurotechnology: “Technology can be used for revolutions, can be used to unite people, but can also be used to monitor and surveil people, can be used to disenfranchise people.” Watch the full interview.

University of Oxford professor Paulo Savaget advocates for work-arounds. “All the change-making efforts involve deviance. What I tried to show in my book is that deviance, first, is different from disobedience. You can be disobedient and still conform to the rules.” Watch the full interview.

LOOKING AHEAD

Power to the Middle: Why Managers Hold the Keys to the Future of Work

McKinsey partners Emily Field and Bryan Hancock and senior partner Bill Schaninger offer a new model for companies to radically alter the way they hire, train, and reward their most valuable asset: managers.

Preorder now

Rewired: The McKinsey Guide to Outcompeting in the Age of Digital and AI

Business leaders will be digitally transforming their companies for the rest of their careers. From McKinsey senior partners Eric Lamarre, Kate Smaje, and Rodney W. Zemmel, Rewired is the reference manual they need for the journey.

Preorder now

BUSINESS BESTSELLERS TOP

8

May your to-read list be longer than your to-do list. Check out this month’s list of business bestsellers in eight categories, prepared exclusively for McKinsey by Circana. Explore the full selection on McKinsey on Books.

BUSINESS OVERALL

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

BUSINESS HARDCOVER

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

DECISION MAKING

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

ECONOMICS

Freakonomics: A Rogue Economist Explores the Hidden Side of Everything by Steven D. Levitt and Stephen J. Dubner (HarperCollins Publishers)

ORGANIZATIONAL BEHAVIOR

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

WORKPLACE CULTURE

Culture Rules: The Leader’s Guide to Creating the Ultimate Competitive Advantage by Mark Miller (Random House)

DIVERSITY & INCLUSION

Poverty, by America by Matthew Desmond (Random House)

SUSTAINABILITY

Recreating Earth: Metatron’s Blueprint for a Whole New World by Victoria Reynolds (Lightning Source Inc./LSI)

BOOKMARK THIS

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Your latest McKinsey Crossword: “You’ll C”

36-Across: Technology that can help achieve net‑zero emissions (and a hint to this puzzle’s theme). Can you solve it?

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

— Edited by Eleni Kostopoulos, a managing editor in McKinsey’s New York office

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by "McKinsey Readers & Leaders" <publishing@email.mckinsey.com> - 08:35 - 27 May 2023

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by "david moussavou" <davidmoussavou@myleadnet.com> - 09:08 - 26 May 2023

The future of wealth and growth, Rewired, digital twins, and more reads for your downtime

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CURATED PICKS FOR YOUR DOWNTIME, FROM OUR EDITORS

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

It’s Memorial Day weekend in the US—and the unofficial start of summer. Take some time to unwind with the week’s big insights on the future of wealth and growth, the power of digital transformation, building resilience, and more.

Over the past two decades, $160 trillion in “paper wealth” was created but economic output did not keep pace, and inequality rose. What does the future hold? McKinsey’s Jan Mischke, Olivia White, Eckart Windhagen, Jonathan Woetzel, Michael Birshan, Sven Smit, Arvind Govindarajan, and Szabolcs Kemeny explore.

4 scenarios

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In a new Author Talks interview, McKinsey’s Eric Lamarre, Kate Smaje, and Rodney Zemmel discuss their new book, Rewired and how companies can leverage the power of AI, enhance customer experience, and drive profitability through an ever-evolving process of transformation.

Create meaningful impact

Got resilience? To prepare for external shocks and uncertainty, organizations need to build resilience—which can start with reviewing organizational health. Check out the latest Five Fifty from McKinsey Quarterly for more.

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Our weekly briefing note on sustainable and inclusive growth explores the role of nuclear power in meeting the world’s net-zero targets, aircraft powered by batteries or hydrogen, and more.

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TECH FOR EXECS

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Seeing double: what digital twins can do for your organization.

Welcome to Tech for Execs: quick primers on key technology terms to get leaders up to speed.

What are digital twins? The digital twin has become a buzzword, but the core concept is simple: a virtual replica of a real-life asset’s entire lifecycle. This could be a person, object, system, process, or business. You could create a digital twin of a new car model or your entire supply chain.

How do they work? A digital twin is designed to act like a real-world asset, so you can simulate different scenarios and gain insights from how it responds. Like in real life, not all twins are identical—the better the digital twin, the more you can learn. Many twins have an AI component, while the most mature ones can be updated in real-time.

How can they help organizations? A digital twin can be used in many areas of an organization, from design to manufacturing to sales. They’re major time savers and revenue drivers, helping businesses enhance predictability, enable automation, and track performance.

How do I get started? You’ll need a robust data infrastructure (from sources to quality control) to start with so you can keep your digital twins updated. Data engineers and data scientists can help with this. A clearly defined business case is essential, which involves considering where digital twins fit in your broader digital strategy and the use cases you want to leverage them for. Here’s a checklist to help you create a blueprint for success.

QUOTE OF THE DAY

“In previous digital transformations, it has been easy to focus on the digital part. But with AI, it naturally triggers you to say, ‘Hang on a minute. I’ve got to think about where the human is in the loop of this in a much more fundamental way.’”

—McKinsey senior partner Kate Smaje on the role of AI in a company’s digital transformation in a recent Author Talks interview

chart of the day

Chart ranking the factors driving US digital workers' attrition and retention.

See today's chart

Ready to unwind?

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A monthly update on the state of the US consumer: May 2023

Consumers’ views on the economy are diverging—and their behaviors are, too. Here’s the latest data from our ConsumerWise team.

Explore the update

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Data Points: Your weekly quiz

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

Take the quiz

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36-Across: Technology that can help achieve net‑zero emissions (and a hint to this puzzle’s theme)

Know the answer? Test yourself with the latest McKinsey Crossword, “You’ll C” | No. 129

Play now

—Edited by Joyce Yoo, editor, New York

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by "McKinsey Daily Read" <publishing@email.mckinsey.com> - 06:22 - 26 May 2023

Your Business Review

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by "Schneider Electric" <reply@se.com> - 03:01 - 26 May 2023

Nursing turnover is an ongoing challenge. How are hospitals confronting staff shortages?

On Point

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

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

Addressing the nursing shortfall

In the news

•

RNs clocking out for good. The COVID-19 pandemic and its accompanying stress and burnout seriously affected the approximately 6.2 million RNs in the US. A new survey from the National Council of State Boards of Nursing shows that about 100,000 US nurses left their jobs during the COVID-19 pandemic and hundreds of thousands more intend to quit in the next four years. This is especially true for nurses with more than a decade of experience. Nurses in several major US cities have gone on strike, calling for better pay and increased staffing. [The Hill]

•

New gigs for nurses. Like many employees, healthcare workers appreciate flexibility. In a bid to entice nurses during a time of ongoing labor shortages, some of the largest US healthcare systems are turning to apps to fill shifts. This gives nurses more control over their schedule compared with the traditional staffing-agency model. It also helps facilities fill staffing gaps by extending the labor pool beyond their core employees. With such apps, the traditional 12-hour shift can be broken into smaller increments, and hourly pay can be adjusted. [WSJ]

Our most recent survey found that 75% of US nurses who left a job in the past 18 months reported that not being valued by their organization was a factor in their decision.

On McKinsey.com

•

Extending a lifeline to nurses. With the stress of the COVID-19 pandemic pushing many nurses to leave the profession, turnover is still a major challenge for many healthcare organizations. Roughly three out of ten RNs in the US might leave their current roles of caring for patients, a survey reported by McKinsey senior partner Gretchen Berlin and colleagues has found. Healthcare systems are working to address staffing shortages and burnout—for example, by creating a quiet space for nurses to take breaks, building more flexibility into shift scheduling, and enabling nurses to see patients virtually.

•

Investing in talent. Over the long term, healthcare facilities could commit to building a strong staffing pipeline. Structural changes, such as increasing support staff and being able to take paid time off, can help ensure that nurses maintain a manageable workload. Investing in upskilling and joint ventures with educational institutions may also benefit recent graduates as they transition to the nursing profession. Learn the top factors that influence nurses to stay or leave and the short-, medium-, and long-term actions that the healthcare industry can take to attract and retain talent.

See what makes nurses stay

— Edited by Gwyn Herbein, editor, Atlanta

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by "McKinsey On Point" <publishing@email.mckinsey.com> - 10:11 - 25 May 2023

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by "Nicole Johnson" <info@servicesshop.com> - 05:54 - 25 May 2023

The future of wealth and growth hangs in the balance

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The future of wealth and growth hangs in the balance

The past two decades have generated $160 trillion in paper wealth but sluggish growth and rising inequality. What comes next?

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by "McKinsey Global Institute" <publishing@email.mckinsey.com> - 02:27 - 25 May 2023

Join the Tray Megacast for an in-depth look at Merlin AI

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by "The Tray.io Team" <team@tray.io> - 12:02 - 25 May 2023

Embracing Safe Driving Behaviors for a Better Tomorrow

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by "Sunny Thakur" <sunny.thakur@uffizio.com> - 12:30 - 25 May 2023

K–12 schools in the US must spend stimulus funds soon. Can districts help students succeed?

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Roll call for education dollars

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The test of time. The results from the National Assessment of Educational Progress (NAEP), released every four years, show an unfortunate trend: scores for eighth graders in US history and civics are down, with only 14% of students reaching a “proficient” or higher mark in history and 22% in civics. The NAEP test scores reflect the ongoing effects of the COVID-19 pandemic on classroom learning, a public official said. According to one chief learning officer, teaching these subjects depends heavily on reading comprehension, so districts need to help students build a better foundation. [NPR]

•

Mind the gap. A March 2023 survey found that 90% of US parents think their children are performing at grade level. In reality, only 29% of eighth graders are proficient in reading and 26% in math. The best way to close the “parent perception gap,” according to two former secretaries of education, is for districts to go beyond school report cards and provide specific information on where students may need help. Parents could also advocate for the necessary resources, such as tutoring programs and opportunities for virtual learning, for which federal funding is currently available. [PBS]

Nearly three-quarters of district administrators said they had struggled to overcome administrative hurdles to receiving funds, navigating compliance, and finalizing procurement.

On McKinsey.com

•

Stimulus spending. With a September 2024 deadline approaching, K–12 schools in the US still have money to spend from the $190 billion Elementary and Secondary School Emergency Relief Fund. A survey of 260 district decision makers reveals the administrative challenges schools experience when working to disburse the funds and manage districts’ shifting priorities, say McKinsey partner Jake Bryant and colleagues. One urban district has invested $45 million in professional development for staff. Others are focusing on overcoming ongoing staffing shortages, supporting student mental health, and addressing unfinished learning.

•

Striking a balance. States and districts each have varying funding needs, especially as schools wrestle with issues related to the COVID-19 pandemic, such as declining enrollments and learning delays. The pandemic has exacerbated existing staffing shortages; demand continues to outpace supply for STEM and mental-health professionals. For districts allocating federal funding, part of the challenge is to balance immediate needs with long-term investments. Three steps can help education leaders distribute federal funds strategically.

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by "McKinsey On Point" <publishing@email.mckinsey.com> - 12:15 - 25 May 2023

Hi

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I wanted to reach out because I have an Audit of your website that reports on the key areas that Google identifies as the main reasons you're probably missing out on a lot of leads.

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by "Martin Clark" <admin@crowdfire.com> - 11:17 - 24 May 2023

Sumo Logic named a Challenger in the Gartner APM and Observability MQ

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A single source of truth for analytics is the single biggest reason to switch to Sumo Logic.

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