Extractive summaries of and key takeaways from the articles curated from TOP TEN BUSINESS MAGAZINES to promote informed business decision-making | Week 294 | April 28-May 4, 2023
The State of Organizations 2023: Ten shifts transforming organizations
By Patrick Guggenberger et al., | McKinsey & Company | April 26, 2023
Business leaders around the world are currently addressing not only economic volatility, geopolitical instability, and the lingering effects of the COVID-19 pandemic but also a range of organizational shifts that have significant implications for structures, processes, and people. Ten of the most important organizational shifts that businesses need to address today are:
- Increasing speed, strengthening resilience. Half of the respondents in a survey say their organization is unprepared to react to future shocks. Those able to bounce forward—and quickly—out of serial crises may gain significant advantages over others.
- ‘True hybrid’: The new balance of in-person and remote work. Since the COVID-19 pandemic, about 90 percent of organizations have embraced a range of hybrid work models that allow employees to work from off-site locations for some or much of the time. It’s important that organizations provide structure and support around the activities best done in person or remotely.
- Making way for applied AI. Companies are already using AI to create sustainable talent pipelines, drastically improve ways of working, and make faster, data-driven structural changes.
- New rules of attraction, retention, and attrition. People are revising their attitudes both to work and at work. Organizations can respond by tailoring employee value propositions to individualized preferences in ways that can help close the gap between what today’s workers want and what companies need.
- Closing the capability chasm. To achieve a competitive advantage, organizations need to build institutional capabilities—an integrated set of people, processes, and technology that enables them to do something consistently better than competitors do.
- Walking the talent tightrope. Business leaders need to focus more on matching top talent to the highest-value roles.
- Leadership that is self-aware and inspiring. Leaders today need to be able to lead themselves, lead a team of peers in the C-suite, and exhibit the leadership skills and mindset required to lead at scale, coordinating and inspiring networks of teams.
- Making meaningful progress on diversity, equity, and inclusion. To realize DEI aspirations, leaders will need to identify opportunities to make progress both in their organizations and in their communities and broader society.
- Mental health: Investing in a portfolio of interventions. Organizations need to refocus their efforts on systematically addressing the causes of mental-health and well-being challenges; one-off and incremental fixes won’t be enough.
- Efficiency reloaded. More than one-third of leaders in a survey list efficiency as a top three organizational priority. Boosting efficiency is about more than managing immediate crises or getting the same work done with fewer resources; it means more effectively deploying resources to where they matter the most.
Four points to consider in an integrated approach to address the ten organizational shifts are: companies need to set a direction to calibrate their ambition, “must dos,” regardless of the type of transformation undertaken; a strong focus on cultivating talent and on investing in the leadership that will take the organization forward; and finally, all these aspects need to be integrated.
2 key takeaways from the article
- Ten of the most important organizational shifts that businesses need to address today are: increasing speed, strengthening resilience; need to create a new balance of in-person and remote work; making way for applied AI; applying new rules of attraction, retention, and attrition; closing the capability chasm; walking the talent tightrope; leadership that is self-aware and inspiring; making meaningful progress on diversity, equity, and inclusion; investing in a portfolio of interventions related to mental health; and increased focus on efficiency.
- Four points to consider while addressing these shifts are: companies need to set a direction to calibrate their ambition, “must dos,” regardless of the type of transformation undertaken; a strong focus on cultivating talent and on investing in the leadership that will take the organization forward; finally, all these aspects need to be integrated.
Topics: Strategy, Business Model, Transformation, Leadership