McKinsey: Half of global revenue from new businesses by 2026
The State of New-Business Building research showed 25% of CEOs globally see integrating new products and services, or building new business models into their ongoing strategies, as a top strategic priority. That represents a doubling in priority. In Europe, new-business building is a priority for 79% of respondents to mitigate industry disruption.
This research comes at a time when new revenue streams are required to meet changing demand. It says that, by 2026, executives expect half of all global revenues will come from products, services, and businesses that simply don’t currently exist.
“The modern business landscape is continuing to place growing importance on new-business building strategies to better ensure profitability — which has been further amplified by the global pandemic. Responding to changing customer and market demands will require an increased focus on new-business building in order to ensure continued success and revenue growth,” said Ralf Dreischmeier, Senior Partner, and global leader of Leap by McKinsey.
“Still, successful execution can be exceedingly challenging. Leaders, specifically core company CEOs, must be actively engaged in new-business building campaigns as consumer top-of-mind issues like sustainability and diversity & inclusion require vision and support to effectively implement.”
Sustainability, structure and diversity are key to business success
The report identified sustainability as one of the key issues and one of the main opportunities. However, it says business leaders are laggards when it comes to actively addressing climate change.
“Sustainability has an increasing presence in the minds of business leaders around the world, however, executives often spend time worrying rather than embracing the countless opportunities to meet environmental challenges and customer demands,” added Dreischmeier.
“Successful new-business building ventures will incorporate the many facets of sustainability, and as such, business leaders must begin to track and report on their progress in ways similar to their companies’ other products and services.”
Leap by McKinsey’s research also highlights the importance of structure and diversity to achieve business success. Building an effective organisational structure, pursuing active acquisitions, better understanding customers, and hiring diverse leaders are all important factors that business leaders need to consider and incorporate into their strategies.
The importance of women in leadership roles cannot be understated – McKinsey found that women-led businesses outperform their peers by 10%, yet women continue to be vastly underrepresented when it comes to leading new businesses, at just 14%.
