Some employees are destroying value. Others are building it. Do you know the difference? - McKinsey | Why the path of global wealth and growth matters for strategy - McKinsey | Innovative growers: A view from the top - McKinsey | A new way to decarbonize buildings can lower emissions—profitably

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� � � � � � You Might Like � � � � � � � � � Some employees are destroying value. Others are building it. Do you know the difference? - McKinsey & Company (Full Access)    The pandemic has forced major changes in how, when, and where people work. It has also bedeviled employers. Due in part to new hybrid and remote-working models, companies are struggling to find objective ways to gauge employee effectiveness—a critical challenge as labor costs have increased and worker productivity has declined.1The US labor productivity rate in the first quarter of 2023 declined at its fastest rate in more than 75 years, according to the Bureau of Labor Statistics. Unit labor costs in the nonfarm business sector increased 4.2 percent in the period, reflecting a 2.1 percent increase in hourly compensation and a 2.1 percent decrease in productivity. Furthermore, worker productivity grew by just 1.1 percent, which is the lowest growth rate since 1981. According to recent analysis from the McKinsey Global Institute, boosting US productivity represents a $10 trillion opportunity. For more, see “Rekindling US productivity for a new era,” McKinsey Global Institute, February 16, 2023. We surveyed 15,366 workers in seven countries (Australia, Canada, Germany, India, Singapore, the United Kingdom, and the United States) from November 2022 to January 2023 about their job satisfaction, commitment, well-being, and self-reported performance, sorting them into groups by their postpandemic working model (mostly in-person, hybrid, or mostly remote). Four steps were taken to reduce bias from self-reported data and increase their validity: all data were normalized within groups to reduce inflation and deflation issues.1David Bartram et al., “A critical analysis of cross-cultural research and testing practices: Implications for improved education and training in psychology,” Training and Education in Professional Psychology, 2009 Volume 3, Number 2. Items were phrased with an external reference or social comparison, which improves accuracy to the level of supervisor ratings.2Gregory H. Dobbins and Jiing-Lih Larry Farh, “Effects of self-esteem on leniency bias in self-reports of performance: A structural equation model analysis,” Personnel Psychology, 1989, Volume 42, Number 4. Multiple performance items were presented, which increases multidimensionality and subsequent rating accuracy, similar to supervisory ratings.3Terry A. Beehr et al., “Relationships between job evaluation ratings and self-ratings of job characteristics,” Organizational Behavior and Human Decision Processes, 1985, Volume 35, Number 1. Continued here � � � � � � You Might Like � � � � � � � � � Don't like ads? Go ad-free with TradeBriefs Premium Why the path of global wealth and growth matters for strategy - McKinsey & Company (Full Access)    Recent global turbulence raises a question: Is the world shifting to a new economic regime for the long run? New McKinsey Global Institute (MGI) research and a recent McKinsey executive survey1McKinsey Executive Survey, June 2023, n = 961. suggest that it might be, but the shape of that future remains uncertain. Business leaders should be aware of potential scenarios so they can adjust and strategize accordingly. MGI looks at economic health and wealth through a unique lens we refer to as the global balance sheet, a tool we borrowed from the corporate world to sum up all of the world’s assets and liabilities, including net worth. Our view through this lens indicates that the developments of the past 20 years have contributed to today’s economic, financial, and market wobbles.2The rise and rise of the global balance sheet: How productively are we using our wealth?, McKinsey Global Institute, November 2021. Over the past two decades, the global balance sheet grew much faster than GDP—the real economy. Because interest rates were kept low to stimulate economies, asset prices and debt grew. Between 2000 and 2021, $160 trillion was added to paper wealth as asset prices surged on the back of low interest rates. For every $1 in investment, $1.90 of debt was generated. Meanwhile, productivity growth among G-7 economies slowed to a sluggish creep: from 1980 to 2000, productivity grew at 1.8 percent per year, while from 2000 to 2018, it decelerated by more than a factor of two, growing at only 0.8 percent annually.3All productivity figures drawn from Alistair Dieppe, ed., Global productivity: Trends, drivers, and policies, World Bank, 2021. Too much savings chased too few productive investments, creating classic secular stagnation.4Lawrence H. Summers, “Accepting the reality of secular stagnation,” Finance & Development, International Monetary Fund, March 2020; Kathryn Holston, Thomas Laubach, and John C. Williams, “Measuring the natural rate of interest: International trends and determinants,” Journal of International Economics, May 2017, Volume 108, Supplement 1. This stable and predictable period was kind to wealth accumulation, but it was challenging for growth and it exacerbated inequality. Continued here � � � � � � You Might Like � � � � � � � � � Innovative growers: A view from the top - McKinsey & Company (Full Access)    In this current era of competing priorities and endless disruption and uncertainty, we know that innovation remains a must-have, not just a nice-to-have, when capital is readily available.1Matt Banholzer, Michael Birshan, Rebecca Doherty, and Laura LaBerge, “Innovation: Your solution for weathering uncertainty,” McKinsey, January 10, 2023. We also know that making a conscious choice to grow and supporting that choice with the right mindsets, development pathways, and capabilities can yield superior shareholder returns.2“Choosing to grow: The leader’s blueprint,” McKinsey, July 7, 2022. But what is the role of innovation in growth and vice versa? To find out, we identified and analyzed about 650 of the largest public companies that achieved profitable growth relative to their industry between 2016 and 2021 while also excelling in the essential capabilities associated with innovation.3Our assessment is based on McKinsey’s proprietary database of about 12,000 companies and their relative mastery of capabilities along four innovation categories: aspire/choose, discover/evolve, accelerate/scale, and extend/mobilize. Using machine learning, natural-language processing, and sentiment analysis of employee reviews, we created a score that served as a reliable proxy for innovation capabilities across these categories. We then reviewed companies that grew faster than their industry while delivering positive economic profit between 2016 and 2021. Some of these companies outgrew their peers, others were more innovative than competitors, but 53 companies managed to do both. The 50-plus “innovative growers,” as we call them, are a diverse group, spread across four continents and ten industries. They include renowned brands with a trillion-dollar market capitalization as well as smaller companies that are just starting to make a name for themselves, some as young as three years old (see sidebar, “Where do innovative growers come from?”). For all their diversity, these companies consistently excel in both growth and innovation—and they share a number of best practices that other companies can learn from. Continued here � � � � � � You Might Like � � � � � � � � � A new way to decarbonize buildings can lower emissions—profitably - McKinsey & Company (Full Access)    Real estate companies are increasingly accepting the imperative to decarbonize buildings, but they frequently find the task difficult, laborious, and expensive. This article is a collaborative effort by Brodie Boland, Daniel Cramer, Alastair Green, Darya Guettler, Focko Imhorst, and Marita Winslade, representing views from McKinsey’ Real Estate Practice. Owners with portfolios of many unique buildings often have no centralized inventory that indicates the conditions inside or the types of equipment they contain. What’s more, physical energy audits and building-by-building net-zero plans are lengthy, costly, and enjoy no benefits of scale. Due to these limitations, the traditional approach to decarbonization has created a widespread impression that decarbonizing buildings is significantly unprofitable. Continued here

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