COVID-19: Briefing note #84, December 8, 2021
The virus is not the only thing with a talent for transformation.
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If you could say anything positive about the COVID-19 pandemic—and its latest twist, the Omicron variant—it might be that it forced a lot of people to get better at accepting and acting upon the need for change. This week, we looked at three ways in which business leaders are transforming their organizations, as well as changes reshaping mortgages, infrastructure, healthcare, and the workplace.
CEOs today face tough operational obstacles, including difficulty in finding workers and an upward price spiral for goods. The prices for basic commodities including steel, semiconductors, and natural gas have risen, as have container-shipping costs. The need for decarbonization adds a long-term challenge to the total picture. To get ahead of operational difficulties, leaders can set up resilient, risk-tolerant supply-chain structures, double down on digitization (exhibit), and achieve real-time visibility and systematic responses to external developments.
Business building is one of the top strategic priorities for organizations—double the share of recent years. That’s because business leaders expect half of their companies’ revenues five years from now to come from products, services, or businesses that do not yet exist, according to the latest McKinsey Global Survey on new-business building. This year’s survey provides insights to move organizations up the learning curve faster.
McKinsey talked to more than 350 senior executives about their plans for transforming sales, general, and administrative activities. Of the executives surveyed, 91 percent are planning to maintain or increase investment in digital technology in the coming years. More than half of respondents (compared with just over a quarter last year) said remote working has increased productivity compared with pre-COVID-19 levels. This boost is leading organizations to aspire to an average of 20 percent savings through optimizing real-estate portfolios.
Before we go any deeper into the topic of change, let’s admit that it’s not easy. On the McKinsey on Government podcast, McKinsey senior partner Kirk Rieckhoff discusses why change is so hard for systems and organizations, how to put teams together that can embrace a transformation, and the steps that lead to success.
The mortgage industry has been gradually adopting technology to streamline processes. But there is still an opportunity for investors to help make getting mortgages easier, faster, and cheaper, with increased digitization and automation, and through offerings from nonbank lenders, next-generation subservicers, nonqualified mortgage lenders, and companies bundling home-buying services.
The December edition of Voices on Infrastructure explores the transformational power of the Infrastructure and Investment Jobs Act and the EU Green Deal. The collection includes articles about how rail-industry leaders optimize project development to meet changing environmental, social, and governance expectations, and the opportunities for infrastructure investors to modernize transportation and help Europe meet its decarbonization goals.
Healthcare payers can take a more active role in the healthcare of members with comprehensive care models that are expected to eventually lower total medical costs.
Parents are transforming the workplace in a way unlikely to please employers: by leaving it. Employers are wise to offer parents creative flexibility in how, when, and where they do their jobs. Employers can improve health equity by ensuring benefits are easy to access and understand, destigmatizing receiving care, and exploring benefits that help with basic needs such as housing and transportation.
Here are some of this week’s other key findings from our research:
- Consumers are enthusiastic about micromobility, with almost 70 percent stating that they were willing to use micromobility vehicles for their commute—though with lots of regional variability.
- Integrated evidence-generation plans (IEPs) are being developed by a handful of life-sciences companies. IEPs take into account the evidence needs of different functions and geographies across the life cycle of an asset, and then collaboratively determine how to meet them using a broad range of methods and data.
- The United Kingdom is Europe’s leading biotech hub in breakthrough life-sciences start-ups. UK biotechs can continue transforming their global impact by leveraging their uniquely data-rich environment and increasing collaboration and collective growth.
- On The McKinsey Podcast, McKinsey partner Shelley Stewart III discusses opportunities to serve Black consumers with housing, healthcare, grocery stores, and brands that fit their needs.
Our Author Talks series features Pulitzer Prize winner and New York Times editorial-board member Farah Stockman. In her book, American Made: What Happens to People When Work Disappears (Penguin Random House, October 2021), Stockman follows three workers laid off from manufacturing jobs that provided not only paychecks but also status, meaning, and the basis of connection to American life.