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COVID-19 has created a massive humanitarian challenge: millions ill and hundreds of thousands of lives lost; soaring unemployment rates in the world’s most robust economies; food banks stretched beyond capacity; governments straining to deliver critical services. The pandemic is also a challenge for businesses—and their CEOs—unlike any they have ever faced, forcing an abrupt dislocation of how employees work, how customers behave, how supply chains function, and even what ultimately constitutes business performance.
Confronting this unique moment, CEOs have shifted how they lead in expedient and ingenious ways. The changes may have been birthed of necessity, but they have great potential beyond this crisis. In this article, we explore four shifts in how CEOs are leading that are also better ways to lead a company: unlocking bolder (“10x”) aspirations, elevating their “to be” list to the same level as “to do” in their operating models, fully embracing stakeholder capitalism, and harnessing the full power of their CEO peer networks. If they become permanent, these shifts hold the potential to thoroughly recalibrate the organization and how it operates, the company’s performance potential, and its relationship to critical constituents.
Only CEOs can decide whether to continue leading in these new ways, and in so doing seize a once-in-a-generation opportunity to consciously evolve the very nature and impact of their role. Indeed, as we have written elsewhere, part of the role of the CEO is to serve as a chief calibrator—deciding the extent and degree of change needed. As part of this, CEOs must have a thesis of transformation that works in their company context. A good CEO is always scanning for signals and helping the organization deliver fine-tuned responses. A great CEO will see that this moment is a unique opportunity for self-calibration, with profound implications for the organization.
We have spoken with and counseled hundreds of CEOs since the pandemic first hit. It is clear to us that they sense an opportunity to lead in a new, more positive and impactful way. If a critical mass of CEOs embraces and extends what they have learned during the pandemic, this CEO moment could become a CEO movement—one that is profoundly positive for the achievement of corporate, human, and societal potential. As Rajnish Kumar, chairman of the State Bank of India, reflects, “This will be a true inflection point. I think that this pandemic, in terms of implications, will be as big an event as World War II. And whatever we learn through this process, it must not go to waste.”
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Invest further in building relationships with other CEOs
CEOs are communicating more, and expanding their networks, in part because only another CEO confronting the pandemic can fully identify with today’s leadership challenges. As Laxman Narasimhan, CEO of Reckitt Benckiser, puts it: “I find talking to other CEOs about how they are handling the crisis extremely helpful—this shared experience connects us and gives me added perspectives.” Says AmerisourceBergen CEO Steve Collis, “From an external perspective, I’ve been a beneficiary of amazing calls with other CEOs who have been willing to share their knowledge. This has been such a growing experience.”
Hospital CEOs realized we were chasing each other around the supply chains [hunting for PPE]. So we began to coordinate. It became almost a daily call.
— Kate Walsh, CEO, Boston Medical Center
It’s no surprise that CEOs are seeing the benefits of connecting in new ways during this crisis. The urgency of the moment has given focus and urgency to the nature of the dialogue. Kate Walsh, CEO of Boston Medical Center, started talking to her peers early in the pandemic, when Boston was becoming one of the country’s COVID-19 hot spots. “Hospital CEOs realized we were chasing each other around the supply chains,” says Walsh. “We began to coordinate, so at least we could let people know that we’d give everybody a mask when they come to work on Monday morning. It became almost a daily call [with other hospitals] as we tried to figure out how to respond to the volume of cases.” Leaders are less focused on showing up to large group meetings and putting on a corporate face that suggests “We’ve got it under control.” Instead, they are intent on accelerating problem solving together by building on one another’s ideas, iterating novel solutions to use in the workplace, trading notes, and moving forward having learned what works best. They are also encouraging one another to conduct bold experiments, taking advantage of the current environment to do A/B testing on a massive scale and trying new ways of operating virtually and digitally.
In order for CEOs to leverage such interactions in the future and accelerate impact on shared challenges, they will have to continue to approach such opportunities—both formal and informal—with humility, a learning mindset, and an open-minded commitment to ongoing development. The benefits of doing so are more significant than one might imagine: role modeling this has the potential to create more open learning organizations for companies, and to identify the cross-industry analogies that often provide the touchstone for innovation. Without the pressure of a crisis, however, leadership resolve will be required to maintain such an approach—research makes it clear that none of this is easy for people in powerful roles.
In light of the newfound connectivity among CEOs within and across industries happening in this moment, CEOs will benefit from reflecting on the following questions:
Leverage networks to tackle a broad set of issues
CEO networks also have a unique potential to enable some of the other things we have talked about thus far in this article. CEOs in noncompetitive industries are well positioned to both challenge and support their peers in aiming higher; in sharing learnings, best practices, and encouragement regarding elevating “to be” to the same level as “to do”; and in working through how to fully embrace stakeholder capitalism.
COVID-19 has brought with it a pressurized operating environment the likes of which few of today’s CEOs have ever experienced—it has “unfrozen” many aspects of the CEO role.
The pharmaceutical industry’s “10x” rush to counter COVID-19 bears witness to this. As Christophe Weber, CEO of Takeda Pharmaceuticals, explains, “We started the development of a plasma-derived medicine for COVID-19 by ourselves. But our head of Plasma-Derived Therapies realized that if we formed an alliance with other plasma companies, we could go much faster and would have the potential to produce a product on a bigger scale. So now we have a pro bono, not-for-profit alliance. And we have a very good alliance with other major plasma companies, smaller ones, and also nonplasma companies, like Microsoft. When everybody saw that it was a true alliance to do good for society, we were able to get the convergence of many companies.”
This interest in shared success can create wins for multiple stakeholders. “Part [of the adjustment to COVID-19] is focusing even more on partnering with and supporting the community,” says CCHMC’s Fisher. “For example, CEOs of major employers, including P&G, Kroger, Fifth Third Bank, Cincinnati Children’s, and others, initiated a task force to focus on a robust and inclusive restart of our economy and region. Being part of those things is more important than ever to me, our institution, and our community.”
Alain Bejjani of MAF frames the potential for CEOs to work together in ways that change the world for the better. Says Bejjani, “Employers enjoy the highest level of trust compared to governments and even NGOs [nongovernmental organizations]. This capital of trust is very important and something CEOs should leverage going forward. We should be at the bridgehead for change. Governments cannot win, cannot deal with the complex issues of our time, without business. Business, in turn, cannot win without government and civil society.” As COVID-19 has made clear, changing the world for the better is good not only for society but also for business.
As CEOs look forward to decide what issues to tackle with their peers, they can build on their pandemic experience by considering the following questions:
COVID-19 has brought with it a pressurized operating environment the likes of which few of today’s CEOs have ever experienced. It has necessitated a reappraisal of how much is possible and in what time frames. It has forced personal disclosure at levels previously considered uncomfortable and, in doing so, has increased awareness of the importance of how leaders show up personally. It has shined a light on the interconnectivity of stakeholder concerns. It has prompted a level of substance-based, peer-to-peer CEO interaction that has elevated all involved. Ultimately, it has “unfrozen” many aspects of the CEO role, making possible a re-fusing of new and existing elements that could define the CEO role of the future.
When the pressure decreases, will CEOs go back to operating as they did before? Or will the role at the top be thoughtfully reconsidered and reconceived by those who occupy it? Clearly, not every CEO will choose to make permanent the four shifts we’ve discussed. The more that CEOs do, however, the more the moment has the potential to become a movement—one that could create higher-achieving, more purposeful, more humane, and better-connected leaders. Judging by the evolution underway, many companies and societies stand to benefit.
About the authors: Carolyn Dewar is a senior partner in McKinsey’s San Francisco office, Scott Keller is a senior partner in the Southern California office, Kevin Sneader is McKinsey’s global managing partner and is based in the Hong Kong office, and Kurt Strovink is a senior partner in the New York office.
The authors wish to thank Monica Murarka for her contributions to this article.
More: McKinsey.com
Over the past half century, the shipping industry has reinvented itself time and again, ushering in containerization, larger vessels, and electronic data interchange. Despite the improvements, aspects of port operations remain firmly anchored in the past, dependent on manual and paper-based systems.
But global trade isn’t standing still. Ever-increasing vessel sizes and cargo volumes continue to pressure ports and terminals, which must keep innovating just to keep up. Operators that want to maintain a competitive edge must adopt a digital mindset and implement smart-port technologies to stay productive, customer friendly, efficient, and competitive. Progressive ports are embracing the same digital breakthroughs that are disrupting other industries. Among those disrupters: connected platforms, cloud-based services, mobile devices and apps, sensors and other Internet of Things technologies, augmented reality, autonomous transportation, blockchain technology, and big data.
At the same time, port environments have become intricate partner networks that include port authorities, terminals, shipping lines, trucking and logistics companies, and off-dock storage providers. To be truly effective, stakeholders have to do more than simply adopt these technologies on their own. Instead, they must embrace platforms and services that make it easier for stakeholders to work together to promote the efficiency of the overall ecosystem. These same platforms and services let individual partners expand their businesses without adding substantial new infrastructure or equipment. In some cases, the multistakeholder platforms also create digital-based services that can be used as new revenue sources.
Smart-port technologies’ impact can be substantial. At Germany’s Port of Hamburg, for example, wide-ranging connected-port initiatives are integral to a plan to double capacity—but not space—by 2025, simultaneously reducing operating costs for operators and logistics costs for cargo owners.
How Digital Helps Transform Ports and Terminals
Smart-port technologies are digital-based, multistakeholder systems. Port stakeholders can use these technologies to reconfigure basic functions and improve existing operations—to reengineer how work gets done—without major investments in new infrastructure and equipment. Accordingly, our review of smart-port technologies does not include traditional IT services, such as data standardization and systems integration, or systems such as terminal automation systems that serve only a single entry.
Smart technologies include systems that support basic infrastructure, as well as, for example, tools for handling cargo, managing traffic, dealing with customs, assuring safety, and monitoring energy use. Some benefit the gamut of port partners while others support specific partnerships between, for example, a port authority and terminal operators.
More: BCG.COM
McK What matters most Five priorities for CEOs in the next normal
Download this collection of insights on the five priorities global executives have told us they’re focusing on as they navigate the trends shaping the future.
Over the course of the pandemic, businesses have largely—and often successfully—adapted to new ways of working. They’ve also embraced digitization and reorganized their supply chains. All of this has been necessary, but it will not be enough. To prepare for the post-COVID-19 era, leaders need to do more than fine-tune their day-to-day tasks; they need to be ready and willing to rethink how they operate, and even why they exist. To put it another way, leaders need to step back, take a breath, and consider a broader perspective.
The pandemic has both revealed and accelerated a number of trends that will play a substantial role in the shape of the future global economy. In our conversations with global executives, they have identified five priorities. Companies will want to adopt these five priorities as their North Star while they navigate the trends that are molding the future. (Click on the tiles of the interactive below for more on each priority, including links to relevant articles.)
Take sustainability, the principle of producing goods and services while exacting minimal damage to the environment. Many companies have taken earnest steps in this regard because they wanted to. In the very near future, however, doing so will be as fundamental to doing business as compiling a balance sheet: consumers and regulators will insist on it. In this context, sustainability needs to be done as systematically as digitization or strategy development because it will be an important source of long-term competitive advantage.
Click each card to learn more: McKinsey.com/thenextnormal.
Center strategy on sustainability
Center strategy on sustainability. Business can act to ensure that sustainability is more than a buzzword. One possibility is to consider investing in technologies that suck carbon from the atmosphere. Make no mistake: given current and future commitments, climate is going to be an increasingly important way to create competitive advantage.
Organizing for sustainability success: Where, and how, leaders can startHow negative emissions can help organizations meet their climate goalsWhy investing in nature is key to climate mitigation
Transform in the cloud
Transform in the cloud. The cloud’s potential to create value has long been clear—but now its capabilities are becoming grounded in reality. By enabling both speed and scale, the cloud is critical to innovation. By 2030, there could be $1 trillion at stake—and it’s likely that early adopters will win the lion’s share.
Three actions CEOs can take to get value from cloud computingCloud’s trillion-dollar prize is up for grabs
Cultivate your talent
Cultivate your talent. Talent is the most important natural resource, and leading companies are showing how to develop it. They coach and empower small teams; deploy talent based on skills, not hierarchy; and fill gaps through training and development. The bottom line: a better employee experience delivers better results.
The new possible: How HR can help build the organization of the futureTackling Asia’s talent challenge: How to adapt to a digital futureThe new science of talent: From roles to returns
Press the need for speed
Press the need for speed. The pandemic forced many organizations to move fast. Now the priority is to sustain that speed by designing it into the organization. Think of speed as a muscle to be developed. Invest in new collaboration technologies. Anticipate shifts in demand. Focus on outcomes.
Speed and resilience: Five priorities for the next five monthsReturn as a muscle: How lessons from COVID-19 can shape a robust operating model for hybrid and beyondOrganizing for speed in advanced industries
Operate with purpose
Operate with purpose. Employees want to work at places that have a sense of purpose—and will leave if they don’t find it. Companies that execute with purpose are more likely to generate long-term value. And people expect business to do more than make money for shareholders—although that is essential.
The case for stakeholder capitalismHelp your employees find purpose—or watch them leaveMore than a mission statement: How the 5Ps embed purpose to deliver value
Or consider the cloud. Its potential has long been recognized; now it is beginning to bring real results in innovation and productivity. A second priority, then, is for companies to deploy the cloud for good purpose. To do so, their people need to be “cloud literate”—that is, to have a keen sense of the cloud’s capabilities.
As ever, it’s the human element that makes the difference. Developing talent is therefore another priority. The organization of the future will not—or, at least, should not—look like the one that existed as recently as 2019. It will need to be more flexible, less hierarchical, and more diverse.
And faster. The pace of change is speeding up, and the landscape of business is more fluid than ever. The need for speed—a fourth priority—is therefore acute. But this speed needs to be sustainable. Businesses did remarkable things in the early months of the pandemic, fueled by adrenaline and a sense of urgency. In the future, speed needs to be embedded into the organization. To put it another way, speed is not just about revving the engine faster, but designing it to run more efficiently and intelligently.
Finally, leaders need to recognize that people want meaning in their lives, and their work. Previous research has found that companies with a strong sense of purpose outperform those that lack one. And those who say they live their purpose at work are simply better employees—more loyal, more likely to go the extra mile, and less likely to leave. Purpose helps companies recognize emerging opportunities and connect with their customers. This, too, should therefore be seen as a priority and a source of competitive advantage.
How these five priorities are implemented will vary from company to company; some will be more important than others, depending on the market. But we believe—and executives around the world with whom we have worked agree—that mastering these five priorities will substantially improve the odds of success.
The articles listed in the interactive can be downloaded here. Our entire collection of individual insights related to the next normal is at McKinsey.com/thenextnormal.
Homayoun Hatami; Global Leader, Capabilities Practices, Paris; LinkedIn; Email
Liz Hilton Segel; Global Leader, Industry Practices, New York; LinkedIn; Email
