How Gen AI could make your organization more profitable

Twice monthly, Liz Hilton Segel and I bring you four new insights out of the dozens we publish that we think are worth a second glance from any business leader in any geography. In this edition, we look at what hybrid work means for your company’s real estate strategy, offer straight talk on generative AI’s business use cases, and more. We hope you enjoy the read.

What’s new

What will gen AI be worth to business? It’s the question of the day, or maybe of a generation. McKinsey has taken a crack at some answers. Our new research finds that generative AI could add as much as $4.4 trillion annually to global GDP. Three-quarters of that could come from just four business domains: customer operations, marketing and sales, software engineering, and R&D, across sectors from banking to life sciences.

Find out what gen AI can do for your bottom line in The economic potential of generative AI: The next productivity frontier, by Michael Chui , Eric Hazan , Roger Roberts , Alex Singla , Kate Smaje , Alexander Sukharevsky , Lareina Yee , and Rodney W. Zemmel Zemmel.

What’s now

Stuck in the middle with who? Some leaders don’t understand the value of the middle manager, and many good middle managers are promoted away from their primary skill set. This is a mistake: not only are these roles essential, but plenty of middle managers are happy in them. The good news is that leaders can support and reward middle managers without moving them out of their jobs. A new McKinsey book, Power to the Middle: Why Managers Hold the Keys to the Future of Work, dives deep into the critical role that middle managers play.

For more edgy takes on the middle, check out Don’t eliminate your middle managers, a new article in Harvard Business Review by Emily Field , Bryan Hancock , and Bill Schaninger, Ph.D. .

What’s next

Workers are flexing on their employers. But the hybrid lifestyle that workers crave is more than just comfy pants and ergonomic office chairs. Fewer people in offices means tenants may be able to save on real estate costs and ultimately achieve more sustainable operations. A new McKinsey survey reveals that most firms are struggling to capture performance improvements and more efficient real estate spending—and hence leaving value on the table.

Move into the future of commercial real estate with Is your workplace ready for flexible work? A survey offers clues, by Phil Kirschner , Adrian Kwok , and Julia McClatchy .

What’s needed

Globalization is not dead, but it’s not feeling very well either, especially in tech circles. Not so long ago, tech leaders at global companies were looking forward to a comfortable future where a global architecture and the cloud enabled a single, hyperefficient IT system. Geopolitical rifts are tearing that dream asunder.

Read up on a new strategy for global IT in Managing the forces of fragmentation: How IT can balance local needs and a global efficiency in a multipolar world, by Oliver Bossert , Mathis Friesdorf , Andreas Kopper , and Dr. Wolf Richter .

We hope you find this synthesis helpful. See you in two weeks with four more ideas from McKinsey.

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