It might sound obvious that to grow your company, you need to understand what your customers want, and it requires spending time looking at the data.
But McKinsey Senior Partner Jill Zucker says it's remarkable how few CEOs actually make this connection.
We found in the research, 63 of companies collect customer data, and yet only 15 of those same executives admit that they use it to make decisions about growth.
This is the McKinsey Podcast, where we help you make sense out of the world's toughest business challenges.
I'm Roberta Fisaro, your host for today.
Coming up.
Jill joins me and senior partner Greg Kelly to talk about what growth mindsets CEOs need to develop in their organizations.
A focus on the customer is just one aspect.
There are four others.
Let's learn about them now.
Greg and Jill, thanks so much for joining the podcast today.
Thanks for having us.
Delighted to be here.
We're here today to talk about growth.
It's like the holy grail for every company.
McKinsey just recently did some research on this topic, which suggests that many executives believe that they have created a growth mindset in their organizations.
But it turns out that very few have been able to translate that into consistent growth behaviors.
What do you think is causing this gap?
We found several years ago that a big source of that was the CEO mindset.
It wasn't enough to just think I'd like to grow, but you needed to make deliberate choices around growth.
We found through this work 72% of leaders wake up in the morning wanting to have a growth company.
And yet, when you look at the actions self-reported by those same executives and you ask them do you have the team in place to allow you to grow?
Did you allocate resources that would allow you to make growth investments?
Only 22 of the same people say yes.
And that, in fact, is a big reason why we find that only one in eight, one in 10, depending on how you look at it.
Companies grow on a sustained basis, profitably over time.
So Jill, understanding that there is this gap?
According to the research, it says there are five mindsets in particular that are most important for growth.
And that is prioritizing growth, acting boldly, maintaining customer centricity, attracting and nurturing talent and executing with rigor.
Which of these do you think is the hardest for executives and organizations to act on?
And why is that so?
So I think Execution in many ways is the hardest.
Most companies listen to their customers, right?
We have surveys, we have scores of how customer satisfaction and yet we often don't have a good feedback loop to translate that customer insight into new initiatives and growth.
Execution requires data.
It requires rigorous tracking, some of which is hard to access. in many ways.
But I like to say cost initiatives, which this certainly is not, are often run with a very rigorous system.
Why is that?
Most cost programs in public companies start with an announcement to the street.
They say, I'm going to cut X hundred million of costs.
Why do they do that?
It's a commitment to themselves.
It's a commitment to the organization.
And then they feel enormous pressure to deliver.
And so they put systems in place.
What's happening every week, every month, every quarter to meet those goals.
Most companies do not do the same on growth.
They should and they could.
Now, why is that?
Well, it's not as clear always where growth is going to come from.
You can have a set of initiatives, but it's harder to say specifically.
This one is going to deliver 10 and this one's going to deliver 15 and this one's only going to deliver two.
But a basket you believe are going to deliver an aggregate.
Sometimes the data is much more forward looking if you think about client sales.
Have we had conversations with our clients?
What have we moved things into contracting?
Where is it in the pipeline?
Not every company has data at all those steps in the funnel.
We launch new products in beta.
Some work, some don't.
Again, we need to have the willingness to fail, the courage.
And so I think this execution and putting real systems together around execution and the same rigor that you bring to costs, is an important piece of the puzzle.
And I think that's the place where many companies struggle the most.
One CEO with whom we worked had great discipline on cost and wondered if they couldn't have that muscle extend to growth.
And so worked to do the same kind of thing across the different types of growth core growth, growth and adjacencies growth and new breakout businesses.
And what she found was that same kind of discipline on the cost side could be applied to growth.
Need to have a few more initiatives than it costs.
The cost ones tend to be a bit more likely to come through.
Need a little bit more on the growth side to make sure that the expected growth comes through.
But that same discipline does apply.
Unfortunately, just not as many companies have that in place today.
You have to make a series of bets.
How do we define these bets?
They're bets that are hard to turn back on.
They take real courage and commitment.
They are things that, of course, you could stop, but they're not subtle in the way in which companies have gone about them.
And they're exactly as you described, Greg across multiple pathways things that you can do in your core business, things that you do in adjacent businesses, things that are kind of one lane over from the value stream that you're in today, and then real breakout opportunities, things that feel distant but five years from now you could imagine deliver significant value to your bottom line.
We hear a lot about the need for executives to act boldly in a lot of different areas.
So I wanted to get at this point about courageousness.
Greg, maybe you could talk a little bit about why it's so hard to stay courageous in times of downturn.
It's so easy to have the urgent overwhelm the important, Roberta.
We do see that in our recent research only 30 of leaders actually do increase resources for growth initiatives during uncertain times.
You think about some of the challenging times that we've had recently, whether that's COVID or some of the tariff difficulties that companies have faced more recently?
It's easy to have that consume the management time and agenda rather than focusing on the most important growth drivers.
That'll make an even bigger difference over the long run.
There are exciting examples, though, of companies who have bucked that trend.
Corning is an interesting example of this.
The CEO there set a bold target to deliver more than 3 billion in new annualized sales, accelerating innovation to really benefit from Gen AI.
They've achieved great results accordingly.
8% increase in revenue is an example.
So it shows how conviction and accountability can reignite growth.
I wanted to turn our attention to one of the other mindsets that we talk about in the article.
We hear a lot about customer centricity and we know that prioritizing the customer leads to faster growth and higher returns and so forth.
But based on this latest research, what other data do we have around customer eccentricity and where maybe companies are falling down on that?
Almost every company collects some form of customer feedback.
I mean, you see it in your email inbox after you make a purchase.
People ask, did you get a company survey?
Did you like it?
The experience, certainly in a B2B context.
You're constantly having a feedback loop with the sales team and CEOs pride themselves on being out in the field and talking to their customers and their clients, which to me was really surprising.
We always say listen to your customers, create the products your customers need help meet them where they are.
We're constantly finding new ways to collect it, source it.
In Gen AI, with all the listening and analysis that can happen.
We know even more and I anticipate we'll continue to know even more about how our customers interact with our companies, particularly in a digital format.
But we have to use those insights to deliver something.
And we haven't yet broadly defined.
Certainly those companies that do see a reward for doing that in terms of growth and outperformance.
But your real engagement does translate into performance.
And by I mean real, meaning both the insight and the action.
I think that's a place that should be an easy win for companies to connect the dots.
Thinking about how companies can do a better job of this.
Is there a role for Gen AI or is there a role for new technologies?
What are some pieces of advice we could give to companies who want to get a better handle on their data and actually use it in effective ways?
I would even start with an analog example, which is the sales team talks to customers every day.
How often, though, do they talk to their product teams?
In a forward-looking way.
I mean, they certainly share the complaints often.
This doesn't work.
This is a problem.
But again, we're just going back to clear execution.
What is the frequency of interaction between product and sales?
And how do they interact?
And what is the expectation for interaction beyond the coffee in the hallway or the chance encounter?
So yes, I am sure there's a role for digital and Gen AI, but I would even start with just basics on this one.
We're seeing a huge acceleration here, right?
If we look at just last year, the amount of progress that our clients made in using AI and Gen AI to make progress on this front.
An example of a company that's been at this for quite a while is Sephora.
I've been super impressed with how they've integrated their approach to consumers across both physical and virtual formats.
And they've got a number of AI tools that they've been developing for a number of years to help them with their beauty insider loyalty program.
Whether you think about the color IQ or skin IQ or smart skin scan match, Those are all capabilities that really help consumers think about beauty being so personal and being able to personalize in-store, at home, with an integrated loyalty ecosystem.
It's a good example to me of a company that has continued to stay at the forefront of technology, using AI and Gen AI to have better results for their consumers, and they've grown as a result.
That's a great example, and I can vouch for it as a Sephora devotee.
You could tell I have daughters, Roberta.
Exactly.
You and my three teenage daughters.
The other thing I would add is I spend a lot of my time in wealth management and really want the promise of a better future for Americans, but global citizens to have financial security in retirement.
And what we found through the use of digital agents and agentic AI is the ability for your financial advisor to call with much more appropriate advice at a much more frequent cadence.
I mean, there's always going to be the digital only customer, but I'm even talking about those that deal with an advisor.
The advisor no longer has to spend time changing the address, doing some of the basic blocking and tackling.
And, as a result, they can spend much more of their time giving you real advice, listening to your needs, giving holistic advice around how to support you and your family.
And they're getting much more insight from their peers.
I mean, many of these wealth management firms have thousands of advisors, but the ability to share insight from all of their clients and what's working has been hard.
And now it's much easier to get it done.
And I see many of these wealth management firms being at the leading edge of this.
Shifting gears again a little bit.
We know that growth requires teamwork, but in our research almost 70 of executives admit they've got substantial gaps in talent in their organizations.
What does it take to build and keep a team that's genuinely wired for growth?
What are some of the components there that executives need to think about?
A lot of it is stretch and challenge.
You're talking about opportunities usually that are pretty nascent when identified.
And so having the courage to take a high-performing leader out of a current bigger area that maybe doesn't have as much growth, to then have that leader go into this new area which has the promise of growth.
It takes real courage to do.
It takes real entrepreneurship from that leader.
And it does stretch and challenge them in a new way.
And we find that companies that do this historically end up doing it more and more over time as they get good results, because it really does take putting those high performers onto these new opportunities to make those new opportunities successful.
And unfortunately, the laggards, if you will, usually don't have a history of doing that.
And it then becomes a bit of a vicious cycle of then not getting the growth, not being confident about the growth and then not outperforming.
But those that are doing it successfully really do have that virtuous cycle in place where high performers go to one of these new areas, make that successful and then go into an even bigger line opportunity.
I would love to add on Roberta and Greg and pick up on the idea of the team, Because what happens is you need to win and lose if you will or course correct as a team.
And if you're an organization that does the stretch and challenge as Greg described, but then when it doesn't work and sometimes growth initiatives don't work you toss the executive out with the initiative.
No high performing executives ever going to be willing to to take that chance.
And so you really need to think about this as a team, and how do you work together and protect an individual who did all the right things, but the initiative or the idea just wasn't fit for purpose or just didn't end up being the right thing in the right moment for a company.
And so moving people around is terrific and definitely required, and you want your best talent on the best new opportunity.
But you also need to protect them on the downside, or else there's no reason that your best performer would ever be willing to take that chance.
Jill, thinking about that very tactically, right?
Are there things that you're seeing amongst our clients where they're having success at kind of building teams that aren't afraid to innovate and try new things?
I think this is a real example of the tone set from the top and the CEO.
If you're an organization where it's okay to give a warning light when things aren't going well, to ask for advice from colleagues and others on the management team, you can solve things together.
If you're an organization and we've all seen them where everything is green and green and then suddenly it's red and burning red, you have a real problem.
But there's always indicators that things are in need of a course correction.
And if that's a disciplinary action to say those things, you have a problem.
If it is seen as let's solve this collectively, as a team.
Let's figure out if we need more dollars, more talent, change in direction, then you get to a better outcome.
But that's a tone from a CEO to be open-minded and willing to have that conversation openly with a group of executives as opposed to a punitive conversation if you raise a concern.
I would add that there is a balance between focus and renewal.
What do I mean by that?
There's usually an inspiring growth agenda that the outperformers set, has an overarching vision and purpose that the organization is going after.
And there's a good set of initiatives then to drive that.
And there's focus for a number of years against that.
Times do change.
Needs do change, though.
And so there usually is a renewal in those outperformers not resting on the laurels of that successful initial growth program, but a renewal.
Pick your time frame.
It's probably more of like three four, five years now after a successful growth agenda that we see the leaders then renewing that, coming up with a refreshed vision, a refreshed purpose and a refreshed growth agenda to drive it, and also then fresh, new talent to drive those new exciting growth initiatives.
Jill, you'd mentioned the tone comes from the CEO.
When I think about the CEO or senior leadership.
You know growth requires this commitment from leadership.
How can leaders keep up their own energy for the long haul?
What do leaders do personally to help facilitate growth?
Yeah, I mean, one is... really a cadence or a rhythm of time to reflect and renew?
What are the moments in the calendar that's predetermined where you're going to really take a step back and make sure you're on the right path?
What is the learning journey that you're going to take yourself and your executive team on?
How are you going to continue to immerse yourself in the latest thinking.
What is the visit to the latest tech innovators that you're going to learn from?
What are you going to do geographically to understand what's happening around the world that you can bring perhaps, back to your own organization?
Setting a real cadence.
Don't let it happen by accident that you got invited to a conference or you met someone over a meal, but that you actually set it up In your executive calendar.
I see many growth organizations say February is our growth month.
We're going to start of the year.
We're going to make sure that we are really learning externally on growth.
And we're going to use the board.
February strategy meeting to do that.
It can be any time of the year, but one company I'm thinking about does that.
And they always bring in really cutting edge thinking and ideas for the executive team in preparation and then ultimately for the board around that.
So I think being intentional is important.
The other thing I would add is growth, like most things, requires re-underwriting.
And given the volatility in the world, the idea that looks good.
That takes three years to materialize in year two and a half.
You might say it's kind of 80 right, but not 100.
And we need to re-underwrite the conditions here and understand what do we need, that's going to work and whatnot.
And I've seen the failure mode is well, we agreed on this big tech build or whatever the case may be three years ago.
We're marching forward with blinders on around what's happened externally.
And when you suggest we should re-underwrite, people sort of step, why would we re-underwrite?
This is what we agreed.
Okay, but we know new things 36 months later.
And that's important to have a feedback mechanism to go after that.
That's incredibly helpful.
This has been great.
And I know the research is ongoing.
As we are entering into 2026, how should executives be thinking about their growth strategies?
I think companies in 2026 need to stay on the leading edge of capabilities.
They need to rewire their organization to be prepared to take advantage of all the innovation that's out there.
AI is certainly a piece of that.
Leveraging digital capabilities, leveraging agents is certainly an important one.
But having your organization be ready for it.
And you know, bringing together the capabilities to be able to absorb all this change will be an important piece of the journey in 26 and beyond.
Roberto, one of the challenges we've given our own leaders in this space is to be agents for growth in this new year.
It's a double meaning, of course, in that we need to be agents for growth working from a human side, but we also need to help our clients create agents to drive growth more systematically and use the power of AI and Gen AI effectively.
This new year is a year where we're really going to see agentic capabilities come to life at scale.
We've seen enough promise across all of the growth levers organic and in the core business, as well as growth and adjacencies and growth in new businesses to know that it has huge power to drive incremental growth in any one specific area.
We see good lifts, whether that's doing a better job on lead generation, whether that's doing a better job in churn reduction.
Whether that's doing a better job in helping humans tailor their messages, remind them of key points to hit, address key customer concerns.
That improved coaching from AI and Gen.
AI is a driver that's really helping our clients drive better growth.
So this is a year we really expect companies to take full advantage of AI and Gen AI to drive disproportionate growth.
This has been a great conversation and I guess I wish all of our clients growth trajectory in 2026.
Thank you both for joining the podcast today.
Thanks for having us.
Thanks so much for listening to the McKinsey Podcast.
I'm Lucia Rahilly.
And I'm Roberta Fasaro.
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