How's your sense of well-being? Why a good boss can lower your blood pressure.

This week, how good managers create a virtuous circle with empowered employees. Plus, Won-Pyo Hong of Samsung SDS on building a collaborative approach, and assessing two separate timelines of when the COVID-19 pandemic will end.

How many years (or decades) has it taken you to realize that having a good boss is more important than the actual work you do? When it comes to employee happiness, bosses and supervisors play a bigger role than you might guess.

A mental-health boost. Relationships with management are the top factor in employees’ job satisfaction, which in turn is the second-most-important determinant of employees’ overall well-being. According to an analysis of well-being in Europe, only mental health is more important for overall life satisfaction. Writ even larger, employee happiness could make a material difference to the world’s 2.1 billion workers. It could also boost profitability and enhance organizational health.

Meet the new boss… Unfortunately, research also shows that most people find their managers to be far from ideal; in a recent survey, 75 percent of participants said that the most stressful aspect of their job was their immediate boss. And those describing bad relationships with management reported substantially lower job satisfaction than those with good relationships.

Burnout, stress, anxiety. The wealth of literature on what makes for a good workplace highlights two aspects that line managers directly control: good work organization—providing workers with the context, guidance, tools, and autonomy to minimize frustration and make their jobs meaningful—and psychological safety, which is the absence of interpersonal fear as a driver of employee behavior. With burnout on the rise, and stress and anxiety a leading cause of ill health and absenteeism, the emotional health of workers becomes particularly important.

A topsy-turvy era. What’s more, while the COVID-19 pandemic has caused major disruption to our working lives in the short term, it is also likely to change the way we work in the long term. Responses to a McKinsey global survey of 800 executives suggest a disruptive period of workplace changes lies ahead because of the acceleration of automation, digitization, and other trends.

A virtuous circle. So how can bosses respond? A good manager instills a sense of trust and confidence, with a clear set of attainable goals rooted in customer-centric thinking. In such an environment, frontline workers feel empowered and often receive positive feedback from customers and colleagues. They are also more likely to raise issues when things do not go well. A safe and collaborative environment for joint problem solving generates innovation, a sense of achievement, and even higher levels of customer satisfaction. With more-loyal customers, lower absenteeism, and low staff turnover contributing to higher profitability, a manager may then be in a position to allocate more resources to workers.

The importance of the ‘servant leader.’ In many ways, there is only one question any manager need ask: How do I make my team members’ lives easier—physically, cognitively, and emotionally? Research shows that this “servant leader” mentality and disposition enhances both team performance and satisfaction. Moreover, studies also suggest that managers themselves are happier and find their roles more meaningful when they feel they are helping other people. Few managers realize what a dramatic impact—either positive or negative—they have on the world through their everyday behavior. It is the responsibility of senior leaders to enlighten them and provide the organizational context that consistently fosters high-quality relationships between bosses and the people who report to them.

OFF THE CHARTS

What’s keeping you from divesting?

Active portfolio management can create significant competitive advantages. Still, executives routinely shy away from separations. A recent survey of 128 senior business leaders helped us pinpoint the most common obstacles to divestitures. With more than 50 percent of respondents also indicating that they expect to conduct divestitures in the next 18 months, now is the time to confront these challenges.

INTERVIEW

Stay humble, stay speedy

Won-Pyo Hong, CEO of Samsung SDS—Samsung’s information- and communications-technology arm—explains how a collaborative approach with employees, partners, and customers helps his company drive digital transformations globally. “We identify our partners based on trust and want to be very honest and open,” he told McKinsey recently. “We share information and the challenges we’re all facing. I believe that will create strong bonds to bolster the companies.”

MORE ON MCKINSEY.‌COM

When will the COVID-19 pandemic end? | There are two important definitions of “end,” each with a separate timeline: an epidemiological end point when herd immunity is achieved, and a transition to a form of normalcy. We assess the prospects for getting there in 2021.

An accelerating pace of change in global payments | The COVID-19 crisis is having a widespread effect on global payments across sectors. With rapid changes, all actors are under pressure to transform and adapt in order to preserve their positions and results.

The travel industry turned upside down | Months into the pandemic, many travel players are trying to right themselves, realizing that their navigational charts are no longer adequate. We offer insights, analysis, and actions for travel executives to weather the storm.

WHAT WE’RE READING

The FT/McKinsey Business Book of the Year

It’s time for the 2020 Financial Times and McKinsey Business Book of the Year shortlist, with six finalists vying for the top honor.

Three of the six books focus on individual companies, two offer big-picture looks at capitalism, and one outlines the way technologies will recast our world of work. This year’s authors include a Nobel Prize winner, a CEO, university professors, journalists, and an economist. The inspiration for one book came to its authors during summer days at a cabin in Montana; another, from decades-old company records in the archives of MIT.

“In a year when books were often an escapist respite and as many business ideas felt abruptly outdated, the 2020 shortlist reflects a rich diversity of mainstream books that not only look back but also offer enduring and relevant lessons in resilient leadership,” Dame Vivian Hunt, a McKinsey senior partner, said in announcing the list recently. “They are potential guides on how to rewire companies, organizations, and societies for the postpandemic next normal.”

Last year’s winner was Caroline Criado Perez for Invisible Women: Data Bias in a World Designed for Men, an examination of how designers and developers have perpetuated bias toward men in the data they use.

This year’s winner will be announced on December 1. Here’s a quick look at the six, for your reading pleasure:

No Filter: The Inside Story of Instagram, by Sarah Frier

This book traces the extraordinary rise of Instagram from a storytelling app to a cultural force that shapes the way we eat, entertain, dress, and live, and along the way, created the new “influencer” industry.

No Rules Rules: Netflix and the Culture of Reinvention, by Reed Hastings and Erin Meyer

In terms of culture, Netflix breaks a lot of rules. This book, coauthored by the media giant’s CEO, reveals how the company values, cultivates, and inspires its people in ways that have allowed it to lead one wave of innovation after another in the entertainment industry.

If Then: How the Simulmatics Corporation Invented the Future, by Jill Lepore

The story of Simulmatics, a company that gathered data and used it to track and model behavior in everyday life, from buying a dishwasher to tracking social trends to influencing votes. It may sound like business as usual today—but the book tracks events that took place in 1959.

Deaths of Despair and the Future of Capitalism, by Anne Case and Angus Deaton

A clear-eyed, sobering look at the reasons capitalism is failing our working class today—exemplified by rising rates of divorce, suicide, and drug use. The book offers tangible solutions for a way forward.

Reimagining Capitalism in a World on Fire, by Rebecca Henderson

Businesses can solve the toughest issues we face today, including social and economic inequality and catastrophic climate change. This book makes that argument, supporting it with examples of companies already creating positive change.

A World Without Work: Technology, Automation, and How We Should Respond, by Daniel Susskind

Daniel Susskind looks at how technology will reshape our worlds of work. The book explores the implications of losing whole labor segments, the increase in economic inequality, and the need for new government approaches.

Share what we’re reading

— Edited by Barbara Tierney

BACKTALK

Have feedback or other ideas? We’d love to hear from you.

Tell us what you think

Follow our thinking