Weekly Briefs from CEO Rich Lesser

In May 2020, Rich Lesser began sharing his latest perspectives and ideas, as well as some of the firm’s most compelling thought leadership, in an email to colleagues, clients, and friends around the world. This weekly brief has covered a wide range of topics that are top of mind for business leaders today, issues that have become more layered and challenging than ever: from global trade and consumer choice to corporate purpose, climate change, and responsible AI. Here is a selection of weekly briefs from their start to today:


Five Issues on the Minds of European CEOs

MAY 24, 2021

Two weeks ago, I wrote to you about the issues and concerns I’m hearing from US CEOs. This time, I’ve asked two of our senior European leaders, Mai-Britt Poulsen and Matthias Tauber, to share their thoughts on what they’re hearing from CEOs on the ground in Europe. You’ll get perspectives from other parts of the world in the coming months.

To BCG’s network around the world,

Much of Europe has been looking with envy at the vaccination progress in the UK and US over the past few months. As we finally start to catch up across the continent, we’re finding that business leaders throughout Europe are turning to a range of pressing challenges and opportunities facing them in a postpandemic reality. Here are five themes on the minds of CEOs in Europe today:The challenges ahead are complex, and there’s plenty keeping European leaders up at night. But as we begin to move past the pandemic in this part of the world, there’s excitement about the great potential to bring about positive change and optimism about the opportunities to come.

  1. Tackling Climate Change. The acceleration of ESG is top of mind among business leaders in Europe—with climate and sustainability the biggest priority. Leaders took notice when the International Energy Agency recently said there must be no new fossil fuel projects beyond this year if we are to reach net zero by 2050. As one CEO told us, “We have very aggressive technology investments as a part of our [climate] strategy, and at the same time we are trying to increase our cost efficiency and cost restructure beyond the levels in the past."
  2. Building an Inclusive Economy. “With COVID-19, the social contract between business and people has changed,” said a CEO we talked to. For example, more and more European leaders are recognizing the important role that business must play in shrinking the diversity gap in leadership—still enormous in some industries—and building inclusive cultures that encourage a range of perspectives and backgrounds. The payoff is clear: companies with above-average diversity on their management teams reported innovation revenue that was 19 percentage points higher than those with below-average diversity.
  3. Accelerating Digital Innovation. The vast majority of future jobs will require digital knowledge, but today 44% of 16- to 74-year-olds in Europe are lacking basic digital skills. The digital acceleration of the past 6 to 12 months has increased this digital skills gap and heightened the competition for talent, pushing many leaders to worry about workforce-planning processes and large-scale upskilling and reskilling programs. And while the US and the likes of Google and Facebook may be out in front in the digital consumer game, business leaders of European industrial companies feel high urgency to win in digital B2B—an opportunity still within their grasp if they move quickly and boldly.
  4. Competing After the Pandemic. As we said above, there’s recognition of the need for digital-driven innovation, but there are also growing concerns about how European companies can compete amid heavy regulation and increased legislation. These worries are nothing new, but they loom large as the US pumps much more stimulus into its economy than we will see in Europe. At the same time, leaders here are worried about the health of their supply chains—and how they can best gain market share. Inflation concerns start with raw materials, but labor supply is also a factor, particularly in Northern Europe.
  5. Keeping Human Interactions in the Future of Work. CEOs of big European companies are eager to bring their people back to the office—to build back company culture, keep apprenticeship alive, and strengthen relationships across the organization while trying to balance requests for hybrid working models. Frequency of travel is another matter. Leaders will likely reconsider in-person meetings in order to save time and costs and to benefit the planet.


Five Issues on the Minds of US CEOs

MAY 11, 2021

To BCG’s network around the world,

Over the past few weeks, as the US starts to emerge from the pandemic, I have had a chance to engage with several dozen US-based CEOs on the issues they are seeing. Interestingly, most of their biggest concerns are similar, even though these CEOs represent a wide range of sectors in the economy. Here are the top five:

  1. Large, Unexpected Supply Challenges. A year ago, after worries about the health of employees and customers, the primary concern keeping US business leaders up at night was demand: how deep would revenues drop, and for how long? It’s remarkable how different it feels now. Broadly speaking, confidence in demand is sky high. At the same time, however, supply constraints come up over and over; whether it’s semiconductors, food, raw materials for health products, or household items, supply chains are under enormous strain. Some CEOs are even worried about top-line impact in the second half of this year and into 2022.
  2. People, People, People. Compounding the supply chain challenges are people shortages. Many CEOs will be disappointed, but not surprised, to see the challenges in getting people back to work apparent in last week’s US job growth numbers. Some of this may be short term, but also top-of-mind are the bigger issues about how future work models will evolve and what that means for retaining talent. For many of us with global workforces, of course, the divergence of the pandemic is striking. In the US, we’re talking about how to overcome vaccine hesitancy, while in India and South America we confront a crisis putting the lives of many of our colleagues at risk. We’re entering a very complex period as far as keeping people safe, engaged, and productive; supporting societal priorities; and inventing new work models.
  3. Inflation Angst. As I wrote to you a couple months ago, our perspective at BCG is that, yes, input prices are rising, but that doesn’t mean systemic inflation is returning. That viewpoint seems in line with what we’re hearing from both US Treasury Secretary Janet Yellen and Fed Chair Jay Powell, who see near-term inflation as a temporary phenomenon. But rising costs and the impact on margins and prices are still a concern for many CEOs. The shortages in materials and labor mentioned above are fueling these pressures, leaving CEOs to wonder how much of the increased cost can be passed on to customers—and how long this will last.
  4. Multistakeholder Opportunities and Stresses. Beyond vaccine breakthroughs, the most striking trend of the year is how the issue of climate and sustainability is emerging as a top-three priority for so many CEOs. But taking on the climate challenge—how ambitiously to set goals, what exactly to report, how boldly to reshape strategies and investment agendas—presents enormous high-stakes questions many are wrestling with. And while climate is at the fore, other ESG and societal challenges are not far behind: bringing racial equity commitments to life, deciding how broadly and specifically to report on a wide range of topics, and whether and how to speak up about sensitive issues such as US election laws. It’s become increasingly complicated for CEOs to take actions that align with their organization’s purpose, appropriately representing their employees and their values, while still creating great value for shareholders given the pressures of investors and activists.
  5. Accelerating Digital and AI Transformation Agendas. With all that has happened over the past year, it is easy to forget the enormous changes underway before the pandemic began. Technology, digital, and AI are reshaping nearly every sector, with opportunities to deepen customer relationships, build resilience, and improve productivity. The risks of falling behind are huge—whether from cyber threats, such as the Colonial Pipeline shutdown, or by being disrupted by more technology-adept competitors. The deeper that companies get into this change agenda, the more they realize it is at least as much about people as it is about technology—truly building bionic companies that are able to integrate technology and people and to learn and adapt at a faster pace.

As I near the end of my CEO tenure later this year, I can honestly say it has rarely been harder to be a CEO, no matter where you are in the world. The challenges are so intense, and it seems as if the world continually gets more complicated and moves faster—including other dimensions, such as geopolitics. On the other hand, relative to what we all feared a year ago, I think most of us are thankful to be in a world of great vaccines—albeit with faster global rollout needed—and an economy that seems to have more upside than downside for the years ahead.


Deep Tech for the Rest of Us

MAY 3, 2021

To BCG’s network around the world,

I recently asked my colleague Antoine Gourévitch, one of our top emerging-technology experts, to predict which of the exciting new technologies—quantum computing, blockchain, the next generation of AI, synthetic biology, nanotechnology—will be behind the biggest innovations and most important societal solutions through this decade and beyond.

I learned a lot from Antoine’s (non)-answer. Rather than placing his bets on any one of these, he is a true believer in the importance of a “deep technology” innovation model, which, as he explained in his recent TED talk, is not about investing in a single technology but leveraging a confluence of technologies and making them more accessible. Deep tech reduces research costs by standardizing new technologies and using data platforms to accelerate the lab-to-market process. The methodology is driven by science, engineering, and design thinking and requires a powerful ecosystem of partners.

In place of the traditional innovation model, where the work takes place in university labs or at large companies, the heart of the deep tech methodology today is in startups—30,000 strong, in fact—which are creating new technology prototypes at an average cost of $200,000. Deep tech ventures, attracting some of today’s most brilliant young scientists, can hold the keys to unlocking the toughest problems we face in areas such as sustainability, energy, nutrition, public health, education, and mobility.

But with such a frenzy of startups out there, what does deep tech really mean for the rest of us?

Unlocking innovation with deep tech offers extraordinary promise, but success requires established companies to embrace new ways of looking at how technology solves problems and new approaches to bringing solutions to market.

The first step when moving into deep tech is to remember that this is a business game, not a technology game. Instead of a solution in search of a problem, the deep tech model begins with a complex problem and tackles it systemically using multiple technologies.

Take the powerful example that we all witnessed over the past year as Moderna and the partnership of BioNTech and Pfizer brought two COVID-19 mRNA vaccines from genomic sequence to market in less than a year.

Or look at the joined forces of Bayer and biotech company Gingko Bioworks, which set out to tackle a problem that had seemed intractable: decreasing the carbon emissions involved in nitrogen fertilizer production. Rather than advancing the current model, the new venture, Joyn Bio, is seeking to disrupt the entire system using synthetic biology to enable cereal crops to fix nitrogen onto the roots of plants, mimicking nature.

The next step is to find the winning technology formula. Successful investors set up an interdisciplinary team of experts to research the landscape of deep tech ventures and identify the combination of available technologies needed to solve the problem at hand.

We’ve been working at this at BCG, developing a deep tech platform to provide information about startups and breaking their capabilities down into building blocks that companies should be able to choose from and combine in order to find the right solution

The third step is to manage the process through a design-build-test-learn (DBTL) engineering cycle. DBTL connects the problem you’re trying to solve with the science and technologies needed to solve it. Identify assumptions to be tested, reducing risk up front; build a working prototype as quickly as possible; anticipate the friction points; and cut back on the costs of testing and learning by using data and digital platforms.

The deep tech investment approach may seem counterintuitive. Big companies have their own R&D departments and may be resistant to reaching out, wary of anything not invented on the inside. But Antoine puts it this way: 2021 is for deep tech what 1995 was for digital. Back then, we certainly didn’t know everything that digital would be capable of, but companies suffered if they were slow to explore, experiment, and adapt with emerging digital technologies.

It’s still relatively early days in the deep tech wave of business innovation. Instead of playing catch up to own specific technologies, most of us will be better placed to dive into a thriving deep tech ecosystem to discover new solutions to our toughest problems.



Mind the Innovation Readiness Gap

APRIL 20, 2021

To BCG’s network around the world,

When BCG began publishing the annual Most Innovative Companies report, back in 2005, the primary focus was on the list itself, highlighting the 50 leading large-company innovators from around the world and telling their inspiring success stories. Over time, the report has turned into an opportunity to explore the drivers of innovation outperformance, diving deep into how companies create healthy innovation systems that help them discover and develop ideas that will excite customers.

Our 2021 report, Overcoming the Innovation Readiness Gap, explains how the COVID-19 pandemic put the need for innovation excellence front and center. A crisis is always a test of an organization’s ability to adapt rapidly to change—and this past year was a crisis like no other, requiring innovation in business models, value propositions, and ways of working.

It turned out, of course, that some companies stood out and were better prepared than others.

The will to be innovative was there. In 2021, 75% of companies said innovation was among their top three executive priorities, as opposed to 65% the year before—the biggest year-over-year jump since we’ve been doing the research. But many face a readiness gap. When we asked respondents about their innovation systems and evaluated them based on BCG’s innovation-to-impact benchmarking framework, we found that just 20% are ready to translate their aspirations into results.

Companies that were committed and ready to innovate were not only able to handle the challenges brought on by the pandemic but found many ways to thrive. For example, the companies on the prepandemic 2020 list outperformed the broader global market in shareholder returns by a staggering 17 percentage points over the past year (13 points even if you exclude the largest high-flying tech firms), making it clear that well-tuned innovation systems drive resilience and adaptability.

I also found it interesting that the leadership teams of the top 50 this year were more diverse in terms of gender and cultural background than their peers. It turns out that this is not simply correlation; looking back at the rich history of the innovators from the past 15 years, we clearly see that diversity drives innovation, not so much the other way around.

For me personally, after having spent so much of my time this past year talking to other business leaders about COVID-19, it gave me particular joy to see early vaccine pioneers Pfizer and Johnson & Johnson both in the top 20 of this year’s list.* Just the other day, as part of the Consilium@BCG executive summit, I spoke with Albert Bourla, Pfizer’s CEO, who described how Pfizer’s purpose and values contributed directly to the company’s ability to be agile and innovative in such a challenging year. I feel such deep appreciation for the way these companies, and other leading health technology firms, unleashed tremendous innovation at a time when the world needed it most.


The Superpower of Humans Plus AI

APRIL 12, 2021

To BCG’s network around the world,

At BCG, we’ve been writing for the past couple of years about the opportunity ahead to build “bionic companies”: organizations that combine what technology does best and what people do best, for outcomes far above what either can achieve alone. Our team of data scientists at BCG GAMMA has been working at the frontier of AI, and some of their most exciting recent projects have put the theory of the bionic company into clear practice, with impressive and sometimes unexpected results.

These projects don’t just involve an AI-powered tool, like retail personalization or a pricing widget, which can deliver impressive but narrow commercial results. Instead, they enable skilled operators of huge complex systems to maximize the capabilities of those systems, whether in mining, manufacturing, electricity, or airline ground operations.

These are situations in which a small number of people have to make important decisions, reacting quickly to shifting circumstances. The choices they make can substantially affect overall system performance with significant financial consequences.

I want to share with you one example, which really brings this to life. In our work with a diversified metals miner, BCG GAMMA delivered an AI suite that is now directly integrated into the company’s core asset operations, allowing it to ingest much more information than previously possible across a wide range of input and output variables. Operators can respond to the information in real time and deliver previously unattained performance levels.

The recommendations from AI are embedded in the system’s center of operations and are based on empirical modeling and rules—the operators’ actual experiences. And the operators remain in charge, choosing whether or not to accept what the AI is telling them. After working with the AI for more than a year, the operators are now also using it to test new hypotheses and expand the boundaries of the plant’s capability. At the same time, the AI learns from the operators as they put new approaches into motion—each dependent on the other to reach new levels of performance.

In this industry, finding 2% to 3% production improvement would be considered a success for projects of this nature—especially those not leveraging AI. With the AI suite now in place, the company is realizing an unprecedented 15% uplift in output, and the team is emboldened to pursue even more.

We’re seeing this kind of success across industries—instances of fully integrated AI that depend on a back-and-forth relationship with experienced operators in order to reach full potential. Instead of AI taking over jobs, it can empower even the most highly skilled people in their roles. In complex environments, unlocking the combined power of human and artificial intelligence is the key to building a truly bionic company.


Deleting the (Traditional) Meeting

MARCH 29, 2021

To BCG’s network around the world,

There’s a lot of talk these days about the future of work. With vaccinations offering a path to the end of this pandemic, and millions soon able to return to the office, we need to decide now how we can capitalize on, and not waste, what we’ve learned about work over the past year. One of the most important choices leaders have to make? How to conduct meetings.

Think of the pandemic as the ultimate centrifuge for meetings, which we’ve always used to try to accomplish a range of goals. COVID-19 separated the meeting into three distinct categories: 1) traditional meetings, for sharing information, discussing, and deciding; 2) workshop-type meetings for ideating, co-creating, and innovating; and 3) opportunities to connect and build personal relationships. Meeting nearly entirely online over the past year has meant a big step forward for #1, a mixed bag for #2, and a step back for #3.

Virtual meetings brought big improvements to traditional meetings. They flattened hierarchies; extended participation across levels and geographies; encouraged dialogue rather than one-way flows, with chat and polling functions; and even brought more order, as we used the hand-raising tool. Without having to manage travel schedules to get together, teams spread out around the world were faster and more agile. Coaching happened in real time to encourage colleagues to speak up, raise a tough issue, or create room for others.

Innovating when we weren’t in the same place was more complicated. The digital natives and quick learners would argue that some of the newer tools allowed for far superior online brainstorming sessions. But many of us—slower to get comfortable with these tools—found creativity was reduced and innovation somewhat inhibited. In our post-pandemic world, how we conduct these types of sessions will likely depend on the topics, as well as the locations and capabilities of attendees.

About #3, the remote world left us longing for the richer connections and deeper bonds we get by being together. But the truth is that this mostly didn’t take place in meetings anyway. It happened around the meetings: during breaks, over lunch and dinner, perhaps at a special event, or in our travels together. Returning to the traditional meeting format because we want to rebuild bonds would largely be a false narrative. What we need is to be more deliberate in setting aside time to connect around our meetings.

If this summary is roughly right, the last thing we want to do over the coming months is return to the old meeting format. It’s a choice that would pressure everyone to sit around the same table, make those who have to dial in feel marginalized and left out, reduce participation given physical room sizes, add a lot more time on airplanes, and reassert old and less agile hierarchies.

Instead, let’s at least test out new approaches. Segment our meetings and push most to virtual formats, such as Teams, WebEx, and Zoom, even when most participants are in the office. And create more room for longer breaks, lunches, and sometimes dinners to kick around ideas, socialize, and build bonds.

In the months ahead, CEOs and senior leaders will set the direction here. If we revert to old models, we can bet our people will, too. And that will make us less sustainable, less agile, and slower in dealing with many of our management responsibilities. But like you, I just can’t wait to have lunch with friends and colleagues and spend more informal time together.

Deleting the traditional meeting while investing to build personal bonds is a win-win, a signal from leaders that we want to capture and build on what we’ve learned over the past year. If you want to write me back, I would love to hear your views and stories about this, too.


Busting Today's Five Biggest Inflation Myths

MARCH 15, 2021

To BCG’s network around the world,

Like many of you, I’ve started to worry about inflation in the US recently—particularly because of the new $1.9 trillion COVID-19 relief and stimulus package in this country and lots of talk of inflation in the news. And when I have questions and concerns about the economy, I usually turn to Philipp Carlsson-Szlezak, BCG’s chief economist, to get his take.

Philipp’s Harvard Business Review video from a year ago, which envisioned potential economic scenarios as a result of the pandemic, was HBR’s most-viewed in 2020. He always has a clear point of view, grounded in historic reality—the “one-handed economist” that Harry Truman always wanted.* When I asked Philipp about inflation, he told me that he believes the doomsday headlines are overblown, despite the strong stimulus, higher inflation expectations, and the recent rise in rates. In an excellent new video, Philipp explains how low and stable inflation are at the heart of a healthy macroeconomic regime with high valuations—and debunks these five common myths:

  1. Inflation is already rising. Yes, but this is a mechanical effect of a weak base period, when the economy was in free fall last April and May. The one-, three-, and six-month windows of inflation since then have all included spikes that then came back down. We’ll soon hit the one-year mark since last spring’s weak base, and we expect to see the same pattern in our year-over-year inflation measure: a spike and then a leveling off.  
  2. If my input prices go up, so must consumer prices. Commodity prices have moved significantly higher, leading many CFOs to link this to consumer price inflation. But producer price inflation across the stages of the economy’s value chain show that such pressures are gradually absorbed in the margins or offset by higher productivity growth. Typically, only a small part of producer price inflation reaches price tags on supermarket shelves.  
  3. Printing money leads to higher inflation. There is a connection between money and prices, but money supply growth is a poor guide for realized inflation. The data since the 1960s doesn’t show a clear correlation—not even after 2008, when money growth accelerated and many predicted high inflation. New money doesn’t automatically translate to new spending, and new spending doesn’t mean the economy is capacity-constrained.  
  4. A strong economy delivers inflation—and then recession. In the modern era, inflation doesn’t respond readily to cyclical pressures because of disinflationary global value chains in the goods sector, disinflationary digital business models in services, and the power of a well-anchored regime. While this doesn’t guarantee long-term low inflation, it does make high inflation unlikely.  
  5. We are on the path to 1970s-style inflation. This is the most serious misreading of inflationary dynamics. An anchored inflationary regime can break, but it’s an improbable shift and would happen over time. In the 1960s, the last time a good inflation regime crumbled, we saw sustained, not one-off, fiscal stimulus and monetary errors—all when the economy was already overheated.

Stimulus and vaccines are thankfully delivering a stronger-than-expected recovery, shifting growth expectations—and therefore inflation expectations—higher. There’s little evidence that we need to worry about a regime shift in inflation anytime soon.

*Harry Truman famously said, “Give me a one-handed economist! All my economists say, ‘On the one hand… [and then] on the other.’”


Overthrowing Your “Inner Dictator”

FEBRUARY 8, 2021

To BCG’s network around the world,

I’m a huge fan of Adam Grant. The Wharton professor of organizational psychology wrote a book called Give and Take back in 2014 that has had a major impact on my thinking about BCG’s culture and formula for sustained success. It’s the one book I give to every managing director and partner, and I’ve recommended it to many CEOs.

The book challenges some of our most ingrained assumptions about what makes people successful in business and in life. It identifies three profiles—“givers,” “takers,” and “matchers”—noting that while givers tend to underperform on average, they also often stand out at the very top of the success ladder. These ideas get at the different ways in which we develop relationships and enable givers to thrive, how we can promote more supportive cultures and weed out takers, and, translated into a BCG context, how we can strengthen the fabric of our partnership and deliver lasting impact to our clients.

Now Adam has a new book—Think Again: The Power of Knowing What You Don’t Know. As someone who has told each incoming class of BCG consultants for 25 years that the skill they need most is not knowing what they know but knowing what they don’t know, I’m thrilled to see Adam bring this concept to life so powerfully.

In Think Again, Adam explains that we all have an “inner dictator”—that part of ourselves that rushes to protect our beliefs and points of view. We have to work hard to keep that voice at bay, question our assumptions, and be open-minded enough to rethink what we thought we knew—and to help others do the same. Overthrowing our inner dictator will allow us to keep learning for the rest of our lives.

To build an organization where rethinking can happen, leaders need to foster an environment that emphasizes learning over short-term performance. The book spells out three overarching steps for creating that kind of learning culture:If there was ever a time when the past won’t predict the future, it’s now. Whether it’s battling the pandemic, taking on climate change, transforming our organizations with digital and AI, or working to heal a polarized society in which people are deeply wedded to their views, the times we’re living in call for just the kind of mental flexibility described in this book. Now, more than ever, we need to question our assumptions and think again.

Thank you once again, Adam, for expanding our horizons and sharpening our view of what matters most for leaders and for all of us seeking to contribute in this rapidly changing world.

  • Be wary of best practices, which can discourage us from looking again at what we think works. Instead, always aim for “better practices.”
  • Build an atmosphere of “psychological safety,” where employees feel comfortable raising concerns and voicing different perspectives.
  • Keep track of rethinking. Instead of just rewarding outcomes, also take note of how different options are debated throughout the process.

If there was ever a time when the past won’t predict the future, it’s now. Whether it’s battling the pandemic, taking on climate change, transforming our organizations with digital and AI, or working to heal a polarized society in which people are deeply wedded to their views, the times we’re living in call for just the kind of mental flexibility described in this book. Now, more than ever, we need to question our assumptions and think again.

Thank you once again, Adam, for expanding our horizons and sharpening our view of what matters most for leaders and for all of us seeking to contribute in this rapidly changing world.


Navigating the New Reality of Global Trade

AUGUST 3, 2020

To BCG’s network around the world,

I’m Nikolaus Lang, senior partner at BCG and leader of our Global Advantage practice. This week, I’m stepping in for Rich to share my thoughts with you about the state of global trade. It’s a landscape that started shifting in the mid-2010s, has been struck hard by the pandemic—and will never look the same again.

Since the Bretton Woods Conference in 1944 and the end of World War II, large parts of the global economy profited from sustained growth, fueled by international cooperation and increasingly liberalized global trade. Since the mid-2010s, geopolitical shifts such as Brexit and frictions between the US and both China and the EU have threatened the spirit of global free trade.

In addition to these geopolitical shifts, COVID-19 has triggered two other negative effects on global trade. First, the pandemic quickly led to falling demand and a global recession, which historically causes significant declines in trade. Second, national and regional lockdowns, controls on shipments arriving at ports, and export bans on some medical and agricultural products disrupted existing supply chains.

According to our simulations, the combination of geopolitical shifts, economic recession, and new supply chain structures is likely to lead to a short-term decline in global trade of 20% to 30%, with full recovery unlikely before 2023. The numbers are stark. According to our baseline economic scenarios, two-way trade between the US and China will have shrunk by about $128 billion in 2023, or around 15%, from 2019 levels, and EU trade with China by about $30 billion. At the same time, ASEAN, India, and North Africa are likely to benefit from these shifts.

The graphic below shows the change in volume of traded goods, represented in billions of dollars, in major corridors from 2015 through 2023.

So, while trade might return to absolute 2019 levels in 2023, international trade routes will be changed forever.

Business leaders must act now to adapt to this emerging new reality. It’s time to reassess global manufacturing networks, supply chain structures, and supplier panels. While it is a complex road ahead, I am confident that companies that build deep resilience into their supply chains and take a fresh, holistic view of the future of global trade will thrive in the post-COVID world. See below for some of BCG’s latest thinking on this topic.

Nikolaus Lang
Managing Director and Senior Partner



Personal Reflections—and Introducing the New Reality Weekly Brief

MAY 20, 2020

Dear colleagues,

As we begin to break the surface on a post-COVID world, questions and uncertainties abound. In an effort to help make sense of our new reality and ensure we are proactively sharing our latest knowledge and insights, we are launching a weekly digest for our core communities, including clients, alumni, and staff. You will automatically receive these updates, and we hope that you will find these perspectives useful in the months ahead.

This email is the first in a series that will arrive in your inbox every week from me or one of my BCG colleagues. Maintaining close connections with leaders around the world feels more important to me today than ever before. Even though we are more distant from one another physically, I feel we are much more connected as we adapt to this health crisis and dramatic disruption to the global economy. I’m pleased to share some of our perspectives and insights with you, along with some personal reflections, as we work together to shape a new reality.

One of the most pressing issues is how to restart the economy safely, effectively—and without having to shut it back down again in the near future. As we move into this next phase, we’ll be counting on governments to provide clear guidelines and oversee the smart execution of prudent timelines and new processes. But progress also depends on the resilience and adaptiveness of business, something we’ve talked about at BCG for quite a while but whose importance is now front and center for all of us.

This is a fight—a fight against the virus and a fight for our future. Businesses have to prepare themselves for a battle that isn’t about a one-time change but instead consists of ongoing shifts and the ability to rapidly evolve. Over a year ago, I coauthored an article on winning the ’20s. In it, we discussed the imperative to increase the rate of learning, arguing that advances in artificial intelligence and dramatic increases in data would create a source of competitive advantage for organizations that could draw better insights, rapidly translate those insights into action, and adapt those actions in real time to continually drive greater impact.

We described this imperative as playing out over the course of this new decade, but COVID-19 has collapsed this timeline from years to months and weeks. Right now, we need to build control towers to rapidly adapt to a virus that will rear its head in unexpected places, quickly understand and react to changing customer behavior, and adjust offerings and restructure businesses to reflect new conditions around the world. We must also build new, resilient models—from supply chains to balance sheets—that reflect the greater uncertainties in the world.

I wish we could all be thinking about how to get back to normal, but we will be far from normal for many months to come and instead must look to lead in a new reality. At BCG, we’ll work through the toughest decisions with you as the post-COVID world starts to emerge. Learn more here about leading in this new reality and creating advantage through resilience as well as other priorities we think leaders should be focusing on now. I’m including more insights below—ideas that I hope you’ll find helpful as we navigate through these complex times.

And as we all know, sometimes a conversation to talk through an issue is worth more than lots of emails and written perspectives. If you want to connect, please reach out to us. My colleagues and I value your trust in us and would be delighted to engage with you on the difficult and sensitive issues you are wrestling with. We may be apart, but we are in this together.


Weekly Briefs from CEO Rich Lesser

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