![]() “Historically, real estate has been a very transactional business,” explains Scott Rechler, CEO of RXR. Even before the pandemic hit, the New York City–based commercial and residential real estate developer began investing in the digital capabilities that would set it apart from competitors. Most people don’t think of real estate as a particularly tech-savvy sector, but RXR Realty is proving that assumption wrong. Kate Smaje, senior partner, McKinsey & Company Speed of digital I have clients saying that they’ve accomplished in 10 days what used to take them 10 months. Aside from moving thousands of employees from the office, call center, and factory floor to home overnight, they’re using these technologies to rejigger supply chains, stand up entirely new e-commerce channels, and leverage AI and predictive analytics to unearth smarter and more sustainable ways to operate. The companies you’re going to meet here are adopting and deploying these digital strategies and approaches at warp speed. Top companies that sustain a comprehensive focus on the customer (in addition to operational and IT improvements) can generate economic gains ranging from 20 to 50 percent of the cost base. But competing pressures and priorities mean that the customer can often be sidelined. Being “customer centric” is well established. High-performing organizations are three times more likely than others to say their data and analytics initiatives have contributed at least 20 percent to EBIT (from 2016–19). Data is providing the fuel to power better and faster decisions. “The road to recovery is paved with data,” Smaje says. Two of the most important areas where this kind of commitment shines through are major acquisitions (leaders spend three times more than their peers) and capital bets (leaders spend two times what their peers do). These companies aren’t just making decisions faster the decisions themselves are bolder. Leading businesses are investing as much in upgrading the core of their business as they are in innovation, often by harnessing technology. While businesses need to maintain the profitable elements of their business, business as usual is a dangerous posture. For example, they reallocate talent and capital four times more quickly than their peers. Leading companies just operate faster, from reviewing strategies to allocating resources. But McKinsey research has highlighted a few elements that really stand out: Large incumbents who are winning the digital transformation battle get lots of things right. Rather, winning companies are investing in the tech, data, processes, and people to enable speed through better decisions and faster course corrections based on what they learn.” “But simply going faster isn’t the answer. ![]() “The fundamental reality is that the accelerating speed of digital means that we are increasingly living in a winner-take-all world,” Smaje says. The companies that are leading the way out of this crisis, the ones that will grab market share and set the tone and tempo for others, are the ones first out of the gate. The pandemic just put that whole scenario on steroids. Even before the global health crisis hit, 92 percent of company leaders surveyed by McKinsey thought that their business model would not remain viable at the rates of digitization at that time. That realization is coming not a moment too soon. Kate Smaje, senior partner, McKinsey & Company “The crisis has forced every company into a massive experiment in how to be more nimble, flexible, and fast.” “That kind of speed is what’s unleashing a wave of innovation unlike anything we’ve ever seen.” ![]() Now, as leaders look ahead to the next year and beyond, they’re asking: How do we keep this momentum going? How do we take the best of what we’ve learned and put into practice throughout the pandemic, and make sure it’s woven into everything we do going forward? “Business leaders are saying that they’ve accomplished in 10 days what used to take them 10 months,” says Kate Smaje, a senior partner and global co-leader of McKinsey Digital. The COVID-19 pandemic is a full-stop on business as usual and a launching pad for organizations to become virtual, digital-centric, and agile-and to do it all at lightning-fast speed. ![]() If that’s true, that’s good news for business leaders who have spent the past five months running their companies in ways they never could have imagined. (172 pages)Ī study referenced in the popular magazine Psychology Today concluded that it takes an average of 66 days for a behavior to become automatic. This collection is the first of five edited volumes to accompany our multimedia series, airing on CNBC, focusing on the forces shaping the next normal. ![]()
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