Rather than facilitating delivery of mission and strategy, organizational structures are standing in their way. Two-thirds of them tell us that their organizations are overly complex and inefficient, while only about half say their organizations are well prepared for the change that is needed. Our research into the organizational upheaval now taking place is backed up by a survey of 2,500 business leaders in countries across Asia, Europe, and North America. Organizations are now standing in the way of the CEO 1 “ What’s your superpower? How companies can build an institutional capability to achieve competitive advantage,” McKinsey, March 21, 2023. Here, we take a concise look at those shifts and the four “superpowers” that can help CEOs find appropriate responses. That is why McKinsey’s launched its first State of Organizations report, published in April 2023, which highlighted the ten organizational shifts business leaders deem the most significant. Such questions are now front and center for many CEOs, and they are looking for solutions. The way in which companies navigate these ongoing shifts-either seizing the opportunities they offer or being weighed down by the challenges they present-is emerging as a determining success factor. In other words, it’s time for organizations to step up from structure and streamlined processes to more dynamic, flexible, and intuitive approaches. It demands new approaches to organizational management to replace models designed for a less complex, less unstable bygone age. Call it the age of perpetual organizational upheaval. And they keep coming: How can organizations strike the right balance between in-person and remote work in the postpandemic era? Harness the powers of generative AI to boost organizational efficiency and productivity while managing the risks? Deal with “quiet quitting” and the desire for self-authorship? Create new institutional capabilities that will give a competitive advantage? And these are just the changes we know about today. Like the movie, they are fast-paced, confusing-and demand answers. The changes are wide in scope, ubiquitous across functions and organizations, and indeed happening all at once. But it’s also the way CEOs are feeling about the massive changes shaking their organizations, last year, this year, and most probably next year too. “Everything, everywhere, all at once.” Yes, it was this year’s Best Picture at the Academy Awards.
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