1166 Posts found for Source: McKinsey Quarterly

Daniel Kahneman was the psychologist whose findings helped launch behavioral economics. The encouraging words he shared with me offer good news for organizations.

Content: Article | Authors: Daniel Kahneman, Tim Koller | Source: McKinsey Quarterly | Subject: Organizational Behavior

One of the ways that I assess whether an organization has an inclusive culture is one of the simplest possible methods: Does the largest possible percentage of people speak of the organization in terms of “we” or “they”? If it’s we, it’s probably inclusive, and if it’s they, which it often is, then despite all the mission statements extolling diversity and inclusive culture—it’s not an … [ Read more ]

Content: Quotation | Author: Sally Helgesen | Source: McKinsey Quarterly | Subjects: Culture, Diversity, Human Resources, Organizational Behavior

If we’re going to live on average to age one hundred, we are certainly not going to be retiring at 65 or anything close to 65, because we’re not going to be able to earn enough money prior to 65 to finance retirement to one hundred.

We’re going to have to rethink retirement, we’re going to have to rethink careers, and we’re going to have to … [ Read more ]

Content: Quotation | Author: Myra Strober | Source: McKinsey Quarterly | Subject: Economics

We believe very firmly that there’s something foundational about cohorts. When we say “cohort,” we mean a group of customers that were acquired in a period, whether that’s a monthly cohort, a quarterly cohort, or an annual cohort. The 2021 cohort is a group of customers who made their first purchase in 2021.

What’s powerful about a cohort is that the membership of that group never … [ Read more ]

Content: Quotation | Author: Michael Ross | Source: McKinsey Quarterly | Subject: Customer Related

The opportunities to use customer analysis to change behavior go way, way beyond what is in the marketing domain—it goes to how we think about profitability, how we align channels, how we align the service propositions, how we align the operational experience, and how we understand which elements of products or categories are good for acquiring and retaining customers.

Content: Quotation | Author: Michael Ross | Source: McKinsey Quarterly | Subject: Customer Related

Understanding the time between first and second purchase is incredibly helpful. It is a very good discipline to understand, “Why do customers only buy once? How can we get them to come back? How can we get them to come back faster?” That drives a lot of very good behaviors.

Content: Quotation | Author: Michael Ross | Source: McKinsey Quarterly | Subjects: Customer Related, Marketing / Sales

When you look at a distribution of customer value, you will often see that a high-value customer—what we’d call a top-decile customer—can be worth 40 or 50 times a low-value customer. The notion of an average customer may be mathematically true, but it doesn’t really exist in practice or is extremely unrepresentative of a customer base.

Content: Quotation | Author: Michael Ross | Source: McKinsey Quarterly | Subject: Customer Related

Every business does some customer analysis. That’s a truism, but what I think is missing is a systematic, structured audit that consists of a set of foundational analyses that leave nowhere to hide, and that allows you to understand at a very deep level how customers are behaving.

Content: Quotation | Author: Michael Ross | Source: McKinsey Quarterly | Subject: Customer Related

Narcissism. Overconfidence. Low EQ. Why do we persist in selecting for leadership traits that hamper organizational progress—and leave the right potential leaders in the wrong roles?

Content: Article | Authors: Brooke Weddle, Bryan Hancock, Tomas Chamorro-Premuzic | Source: McKinsey Quarterly | Subjects: Diversity, Human Resources, Leadership, Organizational Behavior

Yes, organizational health still drives long-term performance—but the way leaders measure and diagnose health should change, new research shows.

Content: Article | Authors: Brooke Weddle, Bryan Hancock, Lucia Rahilly | Source: McKinsey Quarterly | Subject: Organizational Behavior

Psychologists have identified more than 60 cognitive biases that affect how people make decisions. We boiled them down into four groups: group think; confirmation bias; loss aversion, which leads us to put more weight on losses than gains; and anchoring or inertia—anchoring decisions in what we did in the past.

Content: Quotation | Author: Tim Koller | Source: McKinsey Quarterly | Subjects: Decision Making, Organizational Behavior

Public companies are often not set up for innovation, partly because their compensation systems tend to be short-term-oriented and because the boards aren’t deeply enough involved in innovation. […] We’ve seen a tremendous amount of innovation in the past 20 years, but a lot of it has come from younger, newer companies. Despite all the talent, capital, and customer knowl­edge established corporations have, there … [ Read more ]

Content: Quotation | Author: Tim Koller | Source: McKinsey Quarterly | Subject: Innovation

Many perceive the markets as short-term oriented, forcing management to worry only about quarterly earnings. Our research shows that successful companies are typically those with longer-term horizons. There are plenty of investors who have long-term horizons as well, but they generally need to talk to a company only once or twice a year to make their decisions. Short-term investors are noisier. They probably drive the … [ Read more ]

Content: Quotation | Author: Tim Koller | Source: McKinsey Quarterly | Subjects: Economics, Finance

Value creation comes from revenue growth and return on capital, which drive cash flows.

Content: Quotation | Author: Tim Koller | Source: McKinsey Quarterly | Subject: Finance

In a famous social-science experiment conducted in 1946 by psychologist Solomon Asch, participants were given one of two sentences. The first began, “Steve is smart, diligent, critical, impulsive, and jealous.” The second read, “Steve is jealous, impulsive, critical, diligent, and smart.” Although both sentences contained the same information, the first one led with positive traits while the second one started with negatives. When asked to … [ Read more ]

Content: Quotation | Authors: Carolyn Dewar, Kurt Strovink, Scott Keller, Vikram Malhotra | Source: McKinsey Quarterly | Subjects: Communication, Organizational Behavior

All CEOs need to ask themselves, “What do you want to be remembered for—as a great person or a person who made the company great?” If you want to make the company great, then you must think about the company first, yourself second. It’s human nature to want to be recognized, so it’s not easy to put the institution ahead of yourself.

Content: Quotation | Author: Roberto Setúba | Source: McKinsey Quarterly | Subjects: Corporate Governance, Leadership

Diversity, equity, and inclusion (DEI) is grabbing a lot of headlines, but let’s look beyond the latest debates to understand some labor market dynamics that can help employers hire and retain talent to meet business needs. New research from the McKinsey Global Institute compares women’s and men’s work experiences to better understand the tough trade-offs at play in the world of work.

Content: Article | Author: Kweilin Ellingrud | Source: McKinsey Quarterly | Subjects: Diversity, Human Resources, Organizational Behavior, Women in Business

Too often, business initiatives get mired in bureaucracy, overconfidence, and lack of ownership. Massachusetts Institute of Technology’s Andrew McAfee explores reasons for the dysfunction—and how to fix it.

Content: Thought Leader | Authors: Andrew McAfee, Raju Narisetti | Source: McKinsey Quarterly | Subjects: Best Practices, Management, Organizational Behavior

The disruptive premise of Web3 is built on three fundamentals: the blockchain that stores all data on asset ownership and the history of conducted transactions; “smart” contracts that represent application logic and can execute specific tasks independently; and digital assets that can represent anything of value and engage with smart contracts to become “programmable.” Each of these three fundamentals has layers of complexity and nuance, … [ Read more ]

Content: Quotation | Authors: Anutosh Banerjee, Ian De Bode, Matt Higginson, Robert Byrne | Source: McKinsey Quarterly | Subject: IT / Technology / E-Business

Stephen Covey used to talk about your circle of influence, and Buffett talks about your circle of competence. Macro things are not things that start-ups can impact or control. So there’s not much reason for them to affect your thoughts about whether you would start a company or not. They might add anxiety, but I don’t know that they have any real impact.

Content: Quotation | Author: Bill Gurley | Source: McKinsey Quarterly | Subject: Entrepreneurship