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The power of personalization

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FOUR OF OUR BEST NEW IDEAS

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

Twice monthly, we bring you four new insights out of the dozens we publish that we think are worth a second glance from any business leader in any geography. In this edition, we complicate assumptions about Gen Z and social media, get specific about how knowledge workers can use generative AI, and more. We hope you enjoy the read.

—Liz and Homayoun

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What’s new

Slow and steady wins the race? Not necessarily. Fast and steady is a reimagined mantra that can guide today’s leaders as they transform their companies. Speed is key: a common challenge is getting everyone running at the speed needed to power true transformation. We’ve identified three elements to get the company moving at the requisite pace.

Find out why speed thrills in Ready, set, go, and keep going: Why speed is key to a successful transformation, by Louisa Greco and Zachary Silverman .

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What’s now

Let’s get personal. Marketing leaders around the world are reimagining customer relationships in the era of generative AI. The new technology is remaking the ancient art of customer segmentation—and then creating astonishingly relevant content specifically for the new groups it has found. Gen AI tools then help sellers follow up with hyperpersonalized emails at scale (which should be arriving in your inbox any second now). Dozens of other uses are also taking off.

Plan your revolution with AI-powered marketing and sales reach new heights with generative AI, by Richelle Deveau , Sonia Joseph Griffin, and Steve Reis .

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What’s next

As gen AI continues its rapid advance, our experts help business leaders make sense of what stands to change across the enterprise. This week, we explore how four kinds of knowledge workers—coders, relationship managers, customer service reps, and research scientists—can put gen AI to work today.

Generate your company’s future with What every CEO should know about generative AI, by Michael Chui , Roger Roberts , Tanya Rodchenko, Alex Singla , Alex Sukharevsky , Lareina Yee , and Delphine Zurkiya .

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What’s needed

Gen Z and social media: it’s complicated. On one hand, it’s all-consuming: 75 percent check in every day. But why do they do it? More Gen Zers say that social media harms their mental health than other generations. And the more time they spend scrolling, the worse they feel, according to McKinsey Health Institute’s new survey of 40,000 people. But correlation is not causation; social media also has some surprising benefits. And companies that understand social media can help attract and retain dynamic younger workers.

Double-tap Gen Z mental health: The impact of tech and social media, by Erica Coe , Andrew Doy, Kana Enomoto , and Cheryl Healy.

We hope you find this synthesis helpful. See you in two weeks with four more ideas from McKinsey.

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by "McKinsey Shortlist" <publishing@email.mckinsey.com> - 03:37 - 19 May 2023

Employees are looking for connection. Can the new hybrid office deliver?

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Office innovations

In the news

•

The changing workplace. The past 100 years have seen the rise and fall of the cubicle, the open floor plan, and more, as the layout and function of offices have evolved in response to broader changes in technology and society. In today’s era of hybrid and fully remote work models, some employers are searching for ways to make a trip to the office worth it for employees. They are now arranging offices with a mix of residential and commercial styles to make employees feel welcome yet able to maintain distance between work and home. [WaPo]

•

‘Hot desking.’ Many workers returning to an office in a hybrid model aren’t coming back to a dedicated personal workstation. Instead, they’re hot desking, meaning that they must find a new open space to work at each day. However, this setup can be anxiety inducing, since workers may be interacting more with strangers and feeling less stability. Instead of returning to assigned seating to provide a sense of belonging, employers are adding mixed-use spaces and asking their workers what they want in an office, says a leader at a global architecture company. [BBC]

“One of the things we’ve missed in office buildings is that people want to be known. They want to have a personal experience when they come to work.”

On McKinsey.com

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Learning together. Companies that foster connectivity, creativity, and wellness for their workers can spur higher performance, yet offices in many major US metro areas are still half vacant. Being together in person can lead to opportunities for learning, David Arena, head of global real estate for JPMorgan Chase (JPMC), shares with McKinsey partner John Means in an interview. That’s why JPMC’s new headquarters in New York City will include almost 200% more space for in-person interactions, Arena says.

•

An intuitive building. In addition to ensuring that there are places where workers can meet and connect, JPMC’s new headquarters will also take smart systems—such as lighting, security, and climate control—a step further, using automation to make the building more efficient and comfortable. For instance, if it were too hot in a room, a shade might come down, the lights might dim, and more outside air might be let in. “Today, it’s about the intuitive building,” Arena explains. See what’s in store for the office of the future.

Explore tomorrow’s workplace

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Forward Thinking on the rollercoaster of central banking with Hans-Helmut Kotz

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Quantum computing is one of the next big tech trends. Here’s what you should know.

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The promise of quantum computing

In the news

•

Revealing commercial value. A lot of quantum research focuses on demonstrating “quantum advantage”—or showing off the complex calculations that quantum computers can perform that aren’t possible on classical computers. But unless investors and researchers prove the commercial advantages of quantum computing, executives might not understand the technology’s real-world applications. This could include quickly optimizing an investment portfolio to make better-informed investment decisions. [MIT]

•

Cracking encryption codes. Governments and companies have invested billions of dollars in start-ups developing quantum-computing technology. Behind the rush of investment is the realization that quantum computers could someday decode many popular encryption methods used by individuals and companies worldwide. While today’s version of a quantum computer is roughly the size of an oil barrel and could be years away from cracking encryption algorithms, IT security specialists say that all organizations that handle sensitive data need to prepare now. [FT]

Quantum computing alone—just one of three main areas of emerging quantum technology—could account for nearly $1.3 trillion in value by 2035.

On McKinsey.com

•

Powerful potential. Given their ability to do simultaneous calculations, quantum computers are poised to change the way companies solve complex problems, explain McKinsey senior partner Mark Patel and colleagues. In 2019, a quantum computer solved a problem in 200 seconds—the same problem would have taken a classical computer more than 10,000 years! Quantum computers may not be readily available just yet; by 2030, only about 5,000 quantum computers will be operational, McKinsey estimates. Even so, quantum technologies are already being used in the cloud and in conjunction with classical computing.

•

Preparing for the future. While many industries stand to gain from quantum computing’s capabilities, the most immediate progress could be seen in the chemical, pharmaceutical, automotive, and finance industries. However, to harness the full power of quantum computing, companies need to focus on developing a talent pipeline and closing existing skills gaps. For instance, McKinsey research has found that for every three job openings in quantum technology, there is only one qualified candidate. Explore four capabilities that differentiate quantum computers from classical computers.

See what quantum computing can do

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Lessons in resilience from Ukrainian businesses

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Enduring Ukrainian businesses

In the news

•

Rebuilding Ukraine. In 2022, the Ukrainian economy contracted 30%, but thanks to citizens’ resourcefulness and investment from allies, it’s still standing. To stimulate economic growth, Ukrainian executives will likely need to secure credit, take chances, and expand their businesses into new overseas markets. After the war, the potential return of millions of refugees could also promote growth, a Kyiv-based economist says. The cost to rebuild Ukraine is expected to reach $411 billion over the next decade. [Reuters]

•

Sector under siege. Ukraine’s metal industry once provided a third of the country’s exported goods. But with Russian troops occupying some key industrial regions, factory workers are contending with ongoing blackouts, broken equipment, and blocked ports in the Black Sea. Metal production is down by roughly 65% since the invasion, according to an industry group and Oxford Economics. Still, Ukrainians are enterprising and will always find a way to keep going, the CEO of a Ukraine-based international steel and mining business says. [AP]

Ninety percent of Ukrainian companies that suffered physical damage to facilities remained open or reopened quickly.

On McKinsey.com

•

Resilient operations. For more than a year, Ukrainian businesses and citizens have endured a 600-mile front line with territories under regular shelling, energy infrastructure attacks, disrupted fuel supply chains, and damaged refineries. Yet Ukraine’s businesses have operated with surprising resiliency, explain McKinsey partner Mihir Mysore and coauthors. Out of more than 100 Ukrainian companies surveyed, only 2% have completely suspended operations because of the Russian invasion.

•

A broader purpose. McKinsey interviews with Ukraine’s top executives reveal four critical areas of focus. Many leaders have prioritized keeping employees safe and maintaining morale and motivation. Employees working in companies that significantly emphasized values and purpose were much likelier to keep showing up to work. In fact, two-thirds of companies have maintained more than 90% of their workforce a year into the conflict. Understand how Ukrainian businesses are navigating the war.

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