▷ McKinsey survey: Decision-makers rely on start-ups to drive growth

10.12.2021 – 10:07

McKinsey & Company

Dusseldorf (ots)

Decision-makers around the world rely on building new businesses in order to realize future growth opportunities. New business building in the sense of the development of new products, services, business models or companies has the highest strategic relevance for decision-makers: inside the world: for more than half, the development of new businesses and companies is one of the three most important strategic priorities. This is the result of the study “State of New Business Building” by Leap by McKinsey, which was published for the second time after 2020. For the study, over 1,100 managing directors and divisional managers around the world were asked about all aspects of the New Business Building, including 300 from Europe and 45 from Germany. Leap by McKinsey works with established organizations to build innovative businesses from idea to scale. The more than 700 founders, designers, engineers, marketers and analytics experts at Leap combine their skills with the expertise of the global management consultancy McKinsey & Company in the fields of business, design and technology.

A quarter of CEOs worldwide even consider the active integration of new products and services or the development of completely new business models and companies into their current strategies as their top strategic priority – more than twice as many as a year ago. In Europe, around 79% of decision-makers prioritize building up new companies as a means of protecting against major disruptions by new entrants. The potential is enormous: by 2026, respondents expect that 50% of global sales will come from products, services and companies that do not yet exist today. In Europe the figure is 43%.

“New companies, products and services stimulate growth. The global pandemic has strongly strengthened this trend. Companies must react to changing customer and market requirements and focus more on building new business in order to continue to be successful and to increase sales said Ralf Dreischmeier, Senior Partner in McKinsey’s London office and global head of Leap by McKinsey. “Even if many people in charge realize how important new business building is for future corporate success, the plans must also be implemented. Executives, especially CEOs, must actively participate in the development of new businesses, because global challenges such as sustainability, diversity and inclusion need not just a vision, but active support from above, “says Markus Berger-de León, Leap partner in McKinsey’s Berlin office and an experienced serial founder.

Further results of the study are:

sustainability – Taking sustainability into account in the course of developing new business building strategies offers enormous opportunities, but decision-makers have not yet made sufficient use of the opportunity. While 93% of European respondents want sustainability as an integral part of new business opportunities, only 15% measure their goals in terms of their company’s carbon footprint or other environmental impact.

“Executives all over the world are paying more and more attention to the topic of sustainability. Customers are often a step further and will take sustainability criteria into account much more strongly in future purchase decisions. Especially when it comes to new businesses, decision-makers have to follow and communicate sustainability progress in exactly the same way it has long been standard for other products and services, “says Ralf Dreischmeier.

Structure & diversity – The study also shows how companies can be successful in starting new businesses. This includes prioritizing executive-level support, building an effective organizational structure, tracking active acquisitions, better understanding customers, and attitudes towards executives.

While it is imperative for companies to take advantage of the abundance of business building opportunities, starting new successful businesses remains a difficult undertaking. Not even every fifth company currently has annual sales of 50 million US dollars four years after it was founded.

To ensure that new business units achieve their goals, experience and support from parent companies are critical:

  • All over the world, serial founders with experience from three or more corporate venture start-ups achieve significantly more sales (1.4x) than their less experienced colleagues.
  • In addition, it is important to pay attention to diversity when selecting executives. New companies run by women outperform their competitors by 10% in the scaling and growth categories, as the respondents noted. Despite these numbers, women are still severely underrepresented at management level. Only 14% of the new companies are run by women.
  • CEOs of parent companies who protect the new company by providing earmarked investments for the new company, communicate internally realistic expectations, prefer long-term growth to faster profitability, and publicly support the new company are much more likely to be successful than other company leaders.

The full results of the 2021 study “State of New-Business Building” can be found here: https://www.mckinsey.com/leap-state-of-nbb

About McKinsey

McKinsey is a global management consultancy that helps organizations achieve sustainable, inclusive growth. We work with clients from the private, public and social sectors to solve complex problems and create positive change for everyone involved. We combine bold strategies and transformative technologies to help companies make innovations more sustainable, achieve lasting increases in performance and build workforces that will be successful for this and the next generation. McKinsey has offices in Berlin, Düsseldorf, Germany and Austria. Frankfurt am Main, Hamburg, Cologne, Munich, Stuttgart and Vienna. McKinsey teams work in more than 130 cities and 65 countries worldwide. McKinsey was founded in 1926, the German office in 1964. Bob Sternfels has been global managing partner since July 2021. Managing partner for Germany and Austria has been Fabian Billing since March 2021.

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