This is how to future-proof your company, according to McKinsey

This article is brought to you thanks to the collaboration of The European Sting with the World Economic Forum.

Author: Natalie Marchant, Writer, Formative Content

Business leaders should examine their organization’s identity in order to thrive in a post-pandemic future, says McKinsey.

The global management consultancy has found that many organizations are too bureaucratic, too slow and too siloed.

Even prior to COVID-19, executives often were concerned that their companies were organized for a world that is disappearing. Four trends – greater connectivity, an increase in automation, lower transaction costs and changing demographics – had already shifted the goalposts, according to McKinsey.

Here are McKinsey’s nine organizational imperatives that can help companies reimagine themselves for the future by answering three core questions: Who are we? How do we operate? How do we grow?

Who we are: Strengthen identity

1. Take a stance on purpose

Firms that fixate solely on profits will lose ground to rivals that create a strong identity for their employees. Instead, they should create a strong-held sense of corporate purpose that attracts staff and encourages them to stay and thrive.

There are practical benefits, too. McKinsey research finds that those “living their purpose” at work report productivity levels that are four times higher than those who are not.

2. Sharpen your value agenda

Future-ready businesses should create a so-called value agenda – a map dividing a company’s aims into organizational elements such as business units, product lines and key capabilities.

This enables a company to achieve strategic priorities by articulating where value is created, identifying what differentiates it from its rivals and inspiring a sense of what matters in its employees. A value map can also outline how to shift resources as goals change.

3. Use culture as ‘your secret sauce’

Culture refers to the particular set of behaviours, experiences and symbols that collectively describes how a business runs things. McKinsey found that companies with strong cultures achieve up to three times more total returns to shareholders than those without them.

Leaders are recommended to create their organization’s own “secret sauce” – a specific set of behaviours all its staff can adhere to – to create a robust performance culture.

How we operate: Prioritize speed

4. Radically flatten structure

COVID-19 has made speed a priority for many organizations, but also highlighted how difficult speed can be to achieve. Firms can become future-ready by structuring themselves in less complex ways to make them fitter, flatter and faster, says McKinsey.

Companies should centre themselves around connectivity with models that are designed around people and activities – enabling teams to act fast because they are flexible.

5. Turbocharge decision making

Organizations that consistently make decisions fast and well are more likely to outperform their rivals, although this requires a system that allocates decision-making to the correct individuals, teams or even algorithms, according to McKinsey.

The vast majority of these decisions should also be delegated to the lowest levels possible, meaning employees take accountability for decisions they are best placed to make.

6. Treat talent as scarcer than capital

The increasingly connected world of work is changing quickly and future-ready companies need to consider their talent as their scarcest resource.

Fostering an inclusive employee experience is key to attracting top talent. It also influences whether employees stay and thrive, which can, in turn, impact a company’s bottom line. coronavirus, health, COVID19, pandemic

What is the World Economic Forum doing to manage emerging risks from COVID-19?

The first global pandemic in more than 100 years, COVID-19 has spread throughout the world at an unprecedented speed. At the time of writing, 4.5 million cases have been confirmed and more than 300,000 people have died due to the virus.

As countries seek to recover, some of the more long-term economic, business, environmental, societal and technological challenges and opportunities are just beginning to become visible.

To help all stakeholders – communities, governments, businesses and individuals understand the emerging risks and follow-on effects generated by the impact of the coronavirus pandemic, the World Economic Forum, in collaboration with Marsh and McLennan and Zurich Insurance Group, has launched its COVID-19 Risks Outlook: A Preliminary Mapping and its Implications – a companion for decision-makers, building on the Forum’s annual Global Risks Report.

Companies are invited to join the Forum’s work to help manage the identified emerging risks of COVID-19 across industries to shape a better future. Read the full COVID-19 Risks Outlook: A Preliminary Mapping and its Implications report here, and our impact story with further information.

How we grow: Build for scale

7. Adopt an ecosystem view

Organizations need to be agile if they are to grow with any consistency, and key to this is adopting an ecosystem approach that treats partners as extensions of themselves.

The old thinking was all about controlling the supply chain. Now, value is created through the sharing of data and skills.

8. Build data-rich tech platforms

Future-ready organizations make the most of data and use it to continually empower decisions through the relevant technology.

By leveraging data’s ability to connect and scale, companies can use it to develop new products and services, even businesses, in quick upgrade cycles.

9. Accelerate learning in an organization

The most successful companies are the ones that promote a mindset of continuous learning, which then enables their staff to adapt to shifting needs.

By getting their learning right, organizations can create an empowered workforce that’s experienced in the art of “fail fast, learn, repeat” – a key to becoming future-ready.