Opinie Archive


McKinsey – Economic Conditions Snapshot

Global respondents see trade-policy changes as rising risks to growth, and those in developed economies report a more cautious outlook overall than their emerging-economy peers.

Respondents around the world are sanguine about the current state of the global economy and their economies at home, according to McKinsey’s newest survey on economic conditions. But as they look ahead, they are less likely to expect global improvements, and their views divide along regional lines. Respondents in developed economies report a much more guarded outlook on their own economies, the world economy as a whole, and their trade prospects, relative to their peers in emerging economies. In particular, those in North America are more likely than others to expect declining economic conditions and trade levels, as well as changes in trade policy.

Overall, the results underline the central role that the United States plays in respondents’ thinking about growth prospects. When respondents were asked which countries will provide their companies with the biggest growth opportunities in the next year, they most often cite the United States, where interest rates—along with trade policy—have become outsize concerns. In every other region, executives also cite changes in trade policy as a risk to global growth. Since our previous survey, the share saying so has more than doubled, and the issue has also emerged as a growing risk to domestic growth and to the growth of respondents’ companies.

Increasing hopefulness in emerging economies, and waning expectations in developed ones

As we saw in the past two surveys, respondents’ views on current economic conditions remain decidedly upbeat. Fifty-eight percent of all respondents say conditions in their home economies are better now than they were six months ago—with those in India and Latin America reporting the rosiest views. Furthermore, 54 percent of respondents say global conditions are better now than they were six months ago. But their outlooks on future economic conditions diverge by region (Exhibit 1). When asked about their home economies six months from now, the shares expecting improvements range from less than 40 percent in developed Asia and North America to upward of 70 percent in India.

The contributors to the development and analysis of this survey include Sven Smit, a senior partner in McKinsey’s Amsterdam office. He wishes to thank Alan FitzGerald and Vivien Singer for their contributions to this article.

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How Vital Companies Think, Act, and Thrive

“Vitality shows in not only the ability to persist but the ability to start over.” — F. Scott Fitzgerald

“How do you keep the vitality of day one, even inside a large organization?” — Jeff Bezos

Leadership has its benefits—scale, knowledge, influence, and financial stability among them. But our research shows that as companies age and grow, incumbents increasingly focus on internal matters, have more difficulty freeing themselves from legacy businesses and approaches, and progressively shift their priorities toward running—rather than reinventing—the business. Nontraditional competitors, disruptive technologies, and new business models are making corporate reinvention a critical priority.


How can legacy leaders remain vital—to preserve and develop their capacity for growth, risk taking, innovation, and long-term success? In creating a quantitative measure of corporate vitality and its underlying drivers, we hope to provide a working framework of what matters when managing the balance between delivering near-term execution and investing in the future. The drive to maintain vitality has organizational, financial, and cultural levers—all of which reinforce each other.


The challenge is straightforward: growth is critical for sustained value creation. In the short term, companies can create value by optimizing costs or assets or by building investors’ expectations. Yet in the long run, most value creation comes from top-line growth, which accounts for 74% of total shareholder return of S&P 500 top-quartile-performing companies over a ten-year period.

The good news is that achieving sustainable growth is still possible for today’s incumbents. Approximately 10% of large US companies are growing at double-digit rates.  Among that 10%, many—such as Visa and Mastercard (credit cards), Hilton (hotels), Constellation Brands (alcoholic beverages), and O’Reilly (auto parts)—are from nontech industries. What is their secret?

In today’s rapidly changing environment—with elevated political, social, and technological uncertainty—what will make a company thrive tomorrow is different from what makes it succeed today. Current performance is less and less predictive, and an overreliance on backward-looking metrics can be deceptive. Many of today’s large incumbents are vulnerable, even if they have a solid track record of past performance.

And abrupt failures happen increasingly frequently—think Kodak or Blockbuster—in no small part because of the risk of digital disruption. Even when their positions seem comfortable, incumbents need to create a sense of urgency and preemptively address the requirements to sustained success. They must develop their capacity for growth and reinvention. This is what we call vitality.

We are able to measure vitality by using BCG’s proprietary methodology behind the Fortune Future 50—the result of a two-year research partnership between BCG and Fortune magazine. This index ranks the most vital US-listed companies. To build it, we collected all theories purporting to explain the ability of a company to grow and we associated them with measurable variables. We then tested those theories against historical data and only kept the variables that had a measurable and robust impact on long-term revenue growth. As expected, the age and size of a company have a negative impact on growth—confirming that the more established the incumbent, the harder it is to remain vital.

Authors: Martin Reeves, Gerry Hansell, and Rodolphe Charme di Carlo

More: BCG Henderson Institute

The BCG Henderson Institute is The Boston Consulting Group’s internal think tank, dedicated to exploring and developing valuable new insights from business, technology, and science by embracing the powerful technology of ideas. The Institute engages leaders in provocative discussion and experimentation to expand the boundaries of business theory and practice and to translate innovative ideas from within and beyond business. For more ideas and inspiration from the Institute, please visit Ideas & Inspiration.


BCG Research – Corporate Transformations Are Risky

but Evidence Shows How Leaders Can Improve Odds of Success

Many Companies Follow Their Gut Rather Than Seek Evidence of What Works, According to BCG Research Published in MIT Sloan Management Review.  Despite the frequent need for transformation—and the growing risk of failure—too many company transformations are guided by intuition, not by empirical evidence.

Research underpinning the design and execution of turnarounds and transformations is surprisingly thin, leading companies to commit to high-cost, high-risk initiatives without a clear understanding of the actions that will lead to lasting results. But a study by The Boston Consulting Group (BCG) and the BCG Henderson Institute has found several factors that increase the chances of success. The findings are published on the MIT Sloan Management Review website.

“Corporate transformations are often guided by beliefs, that, while seemingly plausible, are more anecdotal than empirical in nature,” said report coauthor Martin Reeves, a Senior Partner at BCG and Director of the BCG Henderson Institute. “It’s time for a more evidence-based approach.”

BCG studied US public companies and focused in on more than 300 with over $10 billion in market capitalization and with an urgent need to transform: their total shareholder return (TSR) had fallen 10 percentage points or more relative to their peers’ over a two-year period. The research covers the period 2004-2016.

The article points out that:

  • At any time during the study, a third of large US companies were experiencing a severe decline in their ability to create shareholder value, demonstrating a need for fundamental change.
  • Successful recovery is the exception, not the rule. Only one-quarter of the companies were able to outperform their industry in the short and long run after the point of TSR deterioration, and this trend has worsened: the transformation success rate was 30% in 2001, and only 25% in 2012.
  • The more severe and protracted the downturn, the worse the results. Of companies that suffered a two-year annualized TSR deterioration of more than 20 percentage points, 95% failed to return to their prior level of performance.

Five factors have proven to increase the odds of successful transformations, especially if used in combination

  • Cost cutting alone is not enough to start a transformation process. Most successful companies also focus on raising investor expectations with credible plans. Many companies that successfully recovered from severe TSR deterioration did indeed cut costs during the first year. But resetting investor expectations (as measured by valuation relative to earnings) was a stronger driver of short-run TSR recovery, accounting for 37% of outperformance. “Leaders must also regain investor confidence by showing how they will leverage their newfound flexibility,” Reeves said.
  • Revenue growth is the key driver of long-term success, so transformations must introduce a “second chapter.” After the first year of transformation, revenue growth became an increasingly important driver. By year five, it outweighed both cost cutting and investor expectations. “Transformation efforts cannot focus solely on short-term operational improvements,” said Reeves. “The second chapter requires that leaders challenge the foundations of the company’s business model, create a new vision for growth, and commit to see the program through.”
  • Long-term strategy and research-and-development (R&D) investment are correlated with success, especially in turbulent environments. Companies with an above-average long-term strategic orientation (as measured by an artificial intelligence algorithm developed by the BCG Henderson Institute that uses natural language processing to analyze company reports) outperformed those with a below-average orientation by 4.8 percentage points. In turbulent environments, the difference was even greater: 7 percentage points. In aggregate, companies with above-average R&D spending perform substantially better (5.1 percentage points) than those with below-average spending.
  • New leadership—especially when brought in from outside—can improve the odds of success. Only 24% of the companies launching a transformation program changed CEOs (compared with 19% at all comparable companies, including those not transforming). But, on average, companies that changed CEOs outperformed: they increased TSR by 9.2 percentage points over a five-year span, compared with 4.6 percentage points for those with incumbent CEOs. External hires performed better in the aggregate, but they had a wider range of both positive and negative outcomes than internal hires. “Companies that go to the outside need a tolerance for risk,” said report coauthor Lars Fæste, a Senior Partner at BCG and global leader of the BCG Transformation practice and BCG TURN. A similar dynamic extends to the leadership team. Only 20% of transforming companies had high executive turnover (more than 20% of officers), but those that did improved TSR by 4.4 percentage points more than others.
  • Formalized transformation programs perform better on average, as long as they’re big and ambitious enough. More than half (57%) of the companies announced a formal transformation program within a year of TSR deterioration. “Those that did, did better,” said Fæste. “In the short run, they boosted investor confidence, and in the long run they achieved sustainable improvements in the business—they increased TSR by 5 percentage points in a five-year period.” The most successful programs were generally long-term—at least five years—and ambitious.

While each of these steps led to positive performance, the companies that did best were the ones that took several of them, not just one. For example, companies that changed CEOs and also had formal transformation programs gained 7.7 percentage points in TSR, compared to just 1.4 percentage points when they had formal programs but kept their incumbent leaders. “When these success factors are used jointly, they have an additive impact, greater than the sum of its parts,” Reeves said. “Companies that used at least four of the success factors in their transformations achieved the largest increase in TSR: a gain of 17.4 percentage points over five years.”

“Not every factor will be relevant in every transformation,” Reeves explained. “But given the stakes, leaders need and deserve evidence-based recommendations. Empirical evidence shows the significant factors in transformation success and the advantages of combining them. Companies can’t afford to ignore it.”

To read the article, visit https://sloanreview.mit.edu/article/the-truth-about-corporate-transformation/.

Eric Gregoire

About the BCG Henderson Institute

The BCG Henderson Institute is the Boston Consulting Group’s internal think tank, dedicated to exploring and developing valuable new insights from business, technology, and science by embracing the powerful technology of ideas. The Institute engages leaders in provocative discussion and experimentation to expand the boundaries of business theory and practice and to translate innovative ideas from within and beyond business. For more ideas and inspiration from the Institute, please visit https://www.bcg.com/bcg-henderson-institute/thought-leadership-ideas.aspx.


The Boston Consulting Group (BCG) is a global management consulting firm and the world’s leading advisor on business strategy. We partner with clients from the private, public, and not-for-profit sectors in all regions to identify their highest-value opportunities, address their most critical challenges, and transform their enterprises. Our customized approach combines deep insight into the dynamics of companies and markets with close collaboration at all levels of the client organization. This ensures that our clients achieve sustainable competitive advantage, build more capable organizations, and secure lasting results. Founded in 1963, BCG is a private company with offices in more than 90 cities in 50 countries.

BCG Continues to be Named a Premier Employer and Ranks Near the Top of Fortune’s “100 Best Companies to Work For” List for a Fifth Straight Year

The Boston Consulting Group Continues Its Highly-Placed Fortune Magazine Ranking, Staying in the Top Five for Eight Consecutive Years and Is One of Only Two Companies to Make the Top Dozen Every Year Since 2006

The Boston Consulting Group (BCG), one of the world’s leading management consulting firms, has continued its extraordinary run near the top of Fortune’s 100 Best Companies to Work For list. Ranking number four, BCG has made the top five for five years in a row and is one of only two companies to be included in the top dozen every year since it began participating in 2006.

BCG’s focus on harnessing its collaborative culture, investing in learning and development, and offering career flexibility and global mobility are instrumental in attracting top talent. The firm’s world-class benefits and its partnership with global and local social impact organizations contribute to its strong performance on the Fortune list and burnish its reputation as a premier employer.

In its profile of BCG, Fortune said: “Equality of opportunity is prized at this global consultancy, which has spent over $100 million on a program to make work schedules more predictable in a 24/7 industry. Work/life balance makes ‘employees happier, more complete humans.’ And even junior staffers feel valued: ‘I have access to leadership worldwide,’ says one.”

The firm’s innovative work-life balance program, called PTO (which stands for predictability, teaming, and open communication), helps establish a detailed road map for each project, with transparent working norms and priorities (so low-value work doesn’t consume high-value personal and professional time) and a collectively agreed-on time-off goal for each team member. PTO provides a sustainable and predictable work path.

At BCG, diversity of expertise, experience, and background are fundamental to success. The firm takes a holistic approach across all people processes to create culturally adaptive teams and an inclusive workforce.

BCG also maintains well-established and engaged employee resource networks and has launched a wide range of diversity and inclusion initiatives to connect people across the organization. Among these are local and network office affiliation activities, an inclusion dialogue series, mentorships, and career development programs. In addition, the firm’s LGBT-friendly benefits and practices have been recognized as world class, as have its programs for working parents.

Great Place to Work, which provides the research underlying the Fortune rankings and conducts an extensive employee survey, noted in its review of BCG that:

  • 98% of employees say, “We have special and unique benefits here.”
  • 98% say, “People here are willing to give extra to get the job done.”
  • 98% say, “Management is honest and ethical in its business practices.”

Joe Davis, BCG’s chairman of North America, commented: “We continue to be honored by this recognition and are proud to have placed in the top five for five consecutive years and in the top ten for a decade. This recognition is a testament to our collective purpose—to unlock the potential of those who advance the world around us by driving inspired impact for our clients, leading with integrity, and growing our people.”

This year’s 100 Best Companies list and related stories will appear in the March 1 issue of Fortune, which goes on sale on February 19. They are available now online at Fortune.com/Best-Companies.

To arrange an interview with a BCG expert, please contact Alexandra Corriveau at +1 212 446 3261 or corriveau.alexandra@bcg.com.

About Fortune’s 100 Best Companies to Work For

To identify the 100 Best Companies to Work For, each year Fortune partners with Great Place to Work to conduct the most extensive employee survey in corporate America. Great Place to Work bases its ranking on a data-driven methodology applied to anonymous Trust Index survey responses from more than 315,000 employees at Great Place to Work–certified organizations with more than 1,000 employees and receive enough survey responses to achieve a 95% confidence level with no more than a 5% margin of error.




5 Things Leaders Need To Do In 2018

Leadership is a journey but it’s also one that can be shaped by what we learn from others

by John Baldoni

When it comes to leadership, people are always looking for something simple to help them learn to lead more effectively. And while skeptics might be tempted to dismiss such simplicity, I disagree. Bravo!

Leadership by nature is simple to describe. Barbara Kellerman, a professor at Harvard Kennedy School of Government and best-selling author of The End of Leadership, noted that there were thousands of definitions for leadership… including perhaps a half-dozen or so I have postulated over the years.  My working definition at the moment is that leaders do what the organization needs them to do. Pure and simple. Leaders must make the tough choices if their organization is to survive. In good times, it’s easy to have your hand on the tiller with the wind at your back. When tough times hit, the hand on the tiller needs to be firm as well as flexible to help navigate into the wind and over choppy water.  Recently, I gave an interview in which I defined five things leaders need to do to succeed for themselves and their organizations.

One, Think big. A leader’s duty is to look over the horizon to see what is possible. Leaders must operate with a sense of possibility.
Two, Understand it’s your job to make others better. No leader accomplishes much by him or herself. Consider explorers; they work in teams of people who are united in purpose.
Three, Look for opportunity in failure. Mistakes happen. It’s a leader’s responsibility to turn them into occasions from which we can learn. At the U.S. Army War College in Carlisle, Pennsylvania there is a department with its own building devoted to after action reports of military engagements. Reading them provides insights into what went right as well as wrong.
Four, Demonstrate resilience. There is no shame in being knocked down. It is what you do next that matters the most.
Five, Keep learning. Leaders are by nature curious.

John Baldoni is an internationally recognized leadership educator, executive coach and the author of many books, including MOXIE, Lead With Purpose, Lead Your Boss, and The Leader’s Pocket Guide. In 2017 Trust Across America named John to its 2017 list of Trust experts. Also in 2017, Global Gurus listed John as a top 30 leadership expert.

 Visit www.johnbaldoni.com
Follow @JohnBaldoni
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Artificial intelligence: The time to act is now


Artificial intelligence will soon change how we conduct our daily lives. Are companies prepared to capture value from the oncoming wave of innovation?

Pity the radiology department at your local hospital. Yes, they have a fine MRI machine and powerful software to generate the images. But that’s where the machines bog down. The radiologist has to find and read the patient’s file, examine the images, and make a determination. What if artificial intelligence (AI) could jump-start that process by enabling real-time and more accurate diagnoses or guidance, beyond what human eyes can see?

Thanks to technological advances over the past few years, manufacturers are close to offering such leading-edge MRI solutions. In fact, they’re exploring new AI applications that span virtually every major industry, from industrials to the public sector. With better algorithms and increased stores of data, the error rate for computer calculations is now often similar to or better than those of human beings for image recognition and several other cognitive functions. Hardware performance has also improved drastically, allowing machines to process this unprecedented amount of data. That has been a major driver of the improvement in the accuracy of AI models.

The evolution of AI

Artificial intelligence (AI) was born in the 1950s, when the English polymath Alan Turing created a test to determine a machine’s ability to mimic human cognitive functions, including perception, reasoning, learning, and problem solving. AI grew with the rise of machine learning (ML)—wherein systems absorb and “learn” from data. They then use this knowledge base to make better predictions and decisions over time. In 2010, the advent of deep neural networks ushered in the deep learning (DL) era.

All ML and DL solutions require two steps: training and inference. Take the software in autonomous cars. To help systems detect obstacles in the road, developers present images to the neural net—for instance, those of dogs or pedestrians—and perform recognition tests. Network parameters are then refined until the neural net displays high accuracy in visual detection. After the network has viewed millions of images and is fully trained, it enables recognition of dogs and pedestrians during the inference phase.

Training now accounts for about 95 percent of AI-related workloads in the public cloud because most AI applications are still relatively immature and require huge amounts of data to refine them. As AI models mature, inference will gain more share in the cloud. In fact, DL inference could account for 30 to 40 percent of public-cloud workloads over the next three to five years, with training dropping to 60 to 70 percent. Inference will also gain share with the rise of edge computing (which takes place within devices), as innovation enables low-power, high-performance inference chips.

Within AI, deep learning (DL) represents the area of greatest untapped potential. (For more information on AI categories, see sidebar, “The evolution of AI”). This technology relies on complex neural networks that process information using various architectures, comprised of layers and nodes, that approximate the functions of neurons in a brain. Each set of nodes in the network performs a different pattern analysis, allowing DL to deliver far more sophisticated insights than earlier AI tools. With this increased sophistication comes greater needs for leading-edge hardware and software.

Well aware of AI’s massive potential, leading high-tech companies have taken early steps to win in this market. But the industry is still nascent and a clear recipe for success hasn’t emerged. So how can companies capture value and see a return on their huge AI investments?

Our research, as well as interactions with end customers of AI, suggests that six tenets will ring true once the dust settles. First off, value capture will initially be limited in the consumer space, and companies will achieve most value by focusing on enterprise “microverticals”—specific use cases within select industries. Our analysis of the technology stack also suggests that opportunities will vary by layer and that the most successful companies will pursue end-to-end solutions, often through partnerships or acquisitions. For certain hardware players, AI might represent a reversal of fortune, after years of waning interest from investors who gravitated toward software, combined with heavy commoditization that depressed margins. We believe that the advent of AI opens significant opportunities, with solutions in both the cloud and the edge generating strong end-customer demand. But our most important takeaway is that companies need to act quickly. Those that make big bets now and overhaul their traditional strategies will emerge as the winners.

Edge and cloud solutions

Our core beliefs about the future of AI

1. Value capture will initially be limited in the consumer sector

2. Enterprise winners will focus on microverticals in promising industries

3. Companies must have end-to-end solutions to win in AI

4. In the AI technology stack, most value will come from solutions or hardware

5. Specific hardware architectures will be critical differentiators for both cloud and edge computing

6. The market is taking off already—companies need to act now and reevaluate their existing strategies


Nvidia’s success shows that tech companies won’t win in AI by maintaining the status quo. They need to revise their strategy now and make the big bets needed to develop solid AI offerings. With so much at stake, companies cannot afford to have a nebulous or tentative plan for capturing value. So what are their main considerations as they forge ahead? Our investigation suggests the following emerging ideas on the classic questions of business strategy:

  • Where to compete. When deciding where to compete companies have to look at both industries and microverticals. They should select the use cases that suit their capabilities, give them a competitive advantage, and address an industry’s most pressing needs, such as fraud detection for credit-card transactions.
  • How to compete. Companies should be searching now for partners or acquisitions to build ecosystems around their products. Hardware providers should go up the stack, while software players should move down to build turnkey solutions. It’s also time to take a new look at monetization models. Customers expect AI providers to assume some of the risk during a purchase, and that could result in some creative pricing options. For instance, a company might charge the usual price for an MRI machine that also has AI capabilities and only require additional payment for any images processed using DL.
  • When to compete. High-tech companies are rewarded for sophisticated, leading-edge solutions, but a focus on perfection may be detrimental in AI. Early entrants can improve and rapidly gain scale to become the standard. Companies should focus on strong solutions that allow them to establish a presence now, rather than striving for perfection. With an early success under their belt, they can then expand to more speculative opportunities.


If companies wait two to three years to establish an AI strategy and place their bets, we believe they are not likely to regain momentum in this rapidly evolving market. Most businesses know the value at stake and are willing to forge ahead, but they lack a strong strategy. The six core beliefs that we’ve outlined here can point them in the right direction and get them off to a solid start. The key question is which players will take this direction before the window of opportunity closes.

About the author(s)
Gaurav Batra is a partner in McKinsey’s Washington, DC, office, Andrea Queirolo is an associate partner in the New York office, and Nick Santhanam is a senior partner in the Silicon Valley office.

More: McKinsey