This week, new research on the mindsets and practices that set excellent CEOs apart from the rest. Plus, how to revive innovation in Europe, and questions for two of the McKinsey partners behind the Women in the Workplace report. |
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How do excellent leaders think and act? There’s a lot out there on this topic, but not much of it is terribly actionable. That’s why McKinsey’s latest research, presented in “The mindsets and practices of excellent CEOs,” aims to codify practical, data-supported prescriptions for leaders. It breaks the job down into six main elements, ranging from setting the corporate strategy to managing personal time and energy. |
We mined our proprietary database on CEO performance, which is the largest of its kind, containing 25 years’ worth of data on 7,800 CEOs from 3,500 public companies across 70 countries and 24 industries. We also drew on what we’ve learned from helping hundreds of CEOs to excel, from preparing for the job and transitioning into it through navigating difficult decisions and moments of truth to handing their responsibilities over to a successor. |
Meanwhile, Unilever’s Peter ter Kulve recommends a growth-focused mindset and a willingness to place bets on the future. Another critical consideration for top leaders is gender diversity—not simply out of concern for organizational health but because, as recent research shows, it boosts performance. One big step toward equality would be to eliminate the “mini me” syndrome, a form of unconscious bias. |
And here’s a fresh challenge for CEOs: how our age of automation could widen economic disparities between high-growth cities and struggling rural areas, affecting where companies hire, invest, and locate. |
Of course, all leaders know that the big test comes with the one thing nobody wants but everybody gets: a crisis. Take your pick for this C-suite rite of passage—regulatory shock, economic downturn, or an internal event. And as financial crime, fraud, and cybersecurity risks evolve and accelerate, leaders have to become even more vigilant than they already are. |
So whatever shape a crisis may take, here are a couple of tips on how to be ready to bounce back. Make sure your CFO is well supported and well prepared. As senior partner Cindy Levy put it in a recent podcast, “The CFO is a very natural center of gravity for that rigorous transparency and the link between external events and news and the financial performance of the company.” |
And be sure to address and repair any fault lines between the board and senior executives. Nurturing relationships at the highest levels of management will help pave the way to a swift recovery. |
In sum, CEOs today need to take on the role of visionary, architect, coach, and catalyst. And that’s in addition to focusing on shareholders. No wonder so few reach the management heights; but those who do, can, with the right mindset, unleash the full potential of their organizations. |
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OFF THE CHARTS |
Reviving innovation in Europe |
A century ago, Europe was a global powerhouse of innovation, but it has started to lose its edge. Despite some notable exceptions, like the automotive industry, Europe is falling behind in areas of innovation such as genomics, quantum computing, and artificial intelligence, where it is being outpaced by the United States and China. But following these five paths could help the continent build on its strengths and regain its competitive edge. |
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INTERVIEW |
Why pre-worn is a good look for the environment |
Andy Ruben, the CEO of Yerdle, spoke with McKinsey about which strategies retailers should pursue to get into the resale space, and why circular-business models are good for brands and consumers alike. “When a brand is dealing with a disruption that is inherently a shift in how customers buy and what they buy, the choice of sitting this out is to walk away from the customer,” he said. “I don’t know why a brand would do that.” |
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FOUR QUESTIONS FOR |
The women behind Women |
“If you’re going to do this, think really, really big.” That’s what a mentor told Lareina Yee and Alexis Krivkovich in 2014 when they shared a budding idea: to apply McKinsey’s business problem-solving approach to gender inequality at work. |
Today, Alexis is a senior partner who manages McKinsey’s San Francisco office. Lareina (above, with global managing partner Kevin Sneader), is a senior partner who is also McKinsey’s chief diversity and inclusion officer. And that idea from 2014? It has blossomed into Women in the Workplace, the largest study of the experience of women and gender inequality in corporate America. Working in partnership with Sheryl Sandberg and LeanIn.org, McKinsey analyzes workplace data and the experiences of men and women to help organizations chart concrete actions. |
McKinsey has been researching gender parity for more than ten years. How did Women in the Workplace take off? |
Lareina: I didn’t know it would turn into what it is today when it first launched. It was largely born out of our own personal experiences. I often found myself doubling the population of women in a conference room whenever I entered. I thought, McKinsey solves some of the world’s toughest business problems through analytics. Why can’t we do the same here, learn something, and help companies work toward gender diversity? |
I wanted to team up with someone, and Lean In had just come out. It resonated with a lot of people (plus Sandberg’s a McKinsey alum), so I worked with Eric Kutcher, a McKinsey senior partner who became a sponsor of the research, to set up a formal partnership with LeanIn.org, since it works individually with women. |
Since those early days, how has the report been received? |
Alexis: There’s definitely been a shift in the quality and sincerity of companies’ engagement on the topic of gender parity. Five years ago, it wasn’t necessarily a stand-alone priority. If you caught someone in HR or diversity and inclusion, you might get interest in participating. |
Today, we’re getting outreach from executive-leadership teams, and participating companies continually tell us how valuable the insights are. Over the years, we’ve heard more companies tell us that the research has helped them prioritize where to focus. |
It’s no longer about optics but rather performance and the talent game. Companies want to ensure they’re engaging their best future leaders, regardless of gender, race, ethnicity, sexual orientation, and other forms of diversity. The numbers say a lot. In five years, we’ve almost tripled the number of participating companies we get, from 118 to 329 this year. |
How has the landscape changed for women in the past five years? |
Alexis: Companies’ commitment to gender diversity has now become a top priority. Since we started, 600 companies have participated in the study, and more than a quarter of a million people have been surveyed. What we know is that data and language from the report provide colleagues with a fact base of what’s going on. And once you’re armed with that, it’s much easier to make changes happen. |
You’ve come this far in five years. What will Women in the Workplace look like after its first decade? |
Lareina: I’d hope the report will be the definitive guide for companies to make progress, particularly at that first step up, and be a source of insights. I’d like to see in the next five years companies applying the same measures that have been successful in the C-suite to the first-manager promotions. On a personal level, Alexis is a mom of three girls, and I am a mom of three boys. We expect them to enter a workforce where equality is the norm, not the exception. |
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BACKTALK |
Have feedback or other ideas? We’d love to hear from you. |
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