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In a nearly four-decade career as an institutional investor, Christopher Ailman has experienced multiple economic cycles. As investors navigate one of the most difficult operating environments in history, Ailman, chief investment officer (CIO) of the California State Teachers’ Retirement Fund (CalSTRS), a US public pension fund with a portfolio valued at $331 billion, emphasizes the importance of getting the timing right: “Being right too early is indistinguishable from being wrong.”…

McKinsey: Delivery Hero is a pioneer in the meal delivery space. What factors, capabilities, and strategic decisions have contributed to its success? What were the turning points, if any?Niklas Östberg: One of the key strengths of Delivery Hero was always our willingness to take risks and innovate. Many of our brands were part of the first wave of online marketplaces that digitalized the phone-based meal ordering process, enabled by an…

Shinpei Kato, CEO of TIER IV, envisions a future of transportation in which open source revolutionizes the autonomous-vehicle industry. Such a disruption would parallel Android’s rise to dominate the mobile software market, which is a testament to the power of open source. It has been a cornerstone not only in mobile software but also in web browsing with Mozilla Firefox, in cryptocurrency through Ethereum, and in the realm of code…

This year will be challenging. We expect the increase in costs to outgrow the increase in revenues.Lionel Souque, CEO, Rewe GroupMcKinsey: What was 2023 like for Rewe? What are the things that stand out? Lionel Souque: It was quite a good year, especially from a sales perspective, although that was partly driven by inflation, not necessarily by volume growth. Penny, our discount business, did especially well in 2023—even better than…

For the European grocery industry, 2023 was a challenging year. Inflation led consumers to tighten their belts, leading to a drop in volume and significant downtrading. As a result, industry growth was significantly below food price inflation. Food price inflation in Europe was 12.8 percent in 2023, while grocery sales grew at a rate of only 8.6 percent. Discounters and private labels benefited from this market environment and were yet…

The US skilled labor market is facing record-high pressure, particularly for companies with manufacturing and construction operations. Increasing labor scarcity, amplified by the COVID-19 disruptions, has intensified competition for talent, raising the sectors’ average wages by more than 20 percent since the first quarter of 2020. Since money wages have rarely, if ever, fallen in the United States, this cost reset is effectively permanent, threatening margins and long-term growth. And…

Conventional approaches to strategy have had to adapt in recent years, with rapid technological change and buffeting from external forces. In this episode of Inside the Strategy Room, the authors of the new book, The Imperfectionists: Strategic Mindsets for Uncertain Times, talk about how companies can benefit from acting quickly to take many smaller yet still bold steps. Charles Conn is an investor, environmentalist, entrepreneur, and McKinsey alumnus. Rob McLean…

Right now, we’re inside a computer program?—Neo (The Matrix, 1999) The 1999 science fiction film The Matrix blurred the lines between the real and the virtual. Less than a quarter of a century later, dramatic advances in AI and digital simulation are disrupting how technology itself is created and used. Today, companies can and do achieve The Matrix–like simulation realism. It’s now possible to create digital representations of components, products,…