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A study referenced in the popular magazine Psychology Today concluded that it takes an average of 66 days for a behavior to become automatic. If that’s true, that’s good news for business leaders who have spent the past five months running their companies in ways they never could have imagined. The COVID-19 pandemic is a full-stop on business as usual and a launching pad for organizations to become virtual, digital-centric, and agile—and to do it all at lightning-fast speed.

Now, as leaders look ahead to the next year and beyond, they’re asking: How do we keep this momentum going? How do we take the best of what we’ve learned and put into practice throughout the pandemic, and make sure it’s woven into everything we do going forward? “Business leaders are saying that they’ve accomplished in 10 days what used to take them 10 months,” says Kate Smaje, a senior partner and global co-leader of McKinsey Digital. “That kind of speed is what’s unleashing a wave of innovation unlike anything we’ve ever seen.”

That realization is coming not a moment too soon. Even before the global health crisis hit, 92 percent of company leaders surveyed by McKinsey thought that their business model would not remain viable at the rates of digitization at that time. The pandemic just put that whole scenario on steroids. The companies that are leading the way out of this crisis, the ones that will grab market share and set the tone and tempo for others, are the ones first out of the gate. “The fundamental reality is that the accelerating speed of digital means that we are increasingly living in a winner-take-all world,” Smaje says. “But simply going faster isn’t the answer. Rather, winning companies are investing in the tech, data, processes, and people to enable speed through better decisions and faster course corrections based on what they learn.”

Large incumbents who are winning the digital transformation battle get lots of things right. But McKinsey research has highlighted a few elements that really stand out:

• Digital speed. Leading companies just operate faster, from reviewing strategies to allocating resources. For example, they reallocate talent and capital four times more quickly than their peers.
• Ready to reinvent. While businesses need to maintain the profitable elements of their business, business as usual is a dangerous posture. Leading businesses are investing as much in upgrading the core of their business as they are in innovation, often by harnessing technology.
• All in. These companies aren’t just making decisions faster; the decisions themselves are bolder. Two of the most important areas where this kind of commitment shines through are major acquisitions (leaders spend three times more than their peers) and capital bets (leaders spend two times what their peers do).
• Data-driven decisions. “The road to recovery is paved with data,” Smaje says. Data is providing the fuel to power better and faster decisions. High-performing organizations are three times more likely than others to say their data and analytics initiatives have contributed at least 20 percent to EBIT (from 2016–19).
• Customer followers. Being “customer centric” is well established. But competing pressures and priorities mean that the customer can often be sidelined. Top companies that sustain a comprehensive focus on the customer (in addition to operational and IT improvements) can generate economic gains ranging from 20 to 50 percent of the cost base.

The companies you’re going to meet here are adopting and deploying these digital strategies and approaches at warp speed. Aside from moving thousands of employees from the office, call center, and factory floor to home overnight, they’re using these technologies to rejigger supply chains, stand up entirely new e-commerce channels, and leverage AI and predictive analytics to unearth smarter and more sustainable ways to operate.

“I have clients saying that they’ve accomplished in 10 days what used to take them 10 months.” — Kate Smaje, senior partner, McKinsey & Company

Speed of digital

Most people don’t think of real estate as a particularly tech-savvy sector, but RXR Realty is proving that assumption wrong. Even before the pandemic hit, the New York City–based commercial and residential real estate developer began investing in the digital capabilities that would set it apart from competitors. “Historically, real estate has been a very transactional business,” explains Scott Rechler, CEO of RXR. “We felt that by leveraging our digital skills, we could create a unique and personalized experience for our customers similar to what they’re used to in other aspects of their lives.”

Prior to the global health crisis, RXR had established a digital lab. The company now has more than 100 data scientists, designers, and engineers across the organization working on digital initiatives. The investment in those capabilities—an app that enables move scheduling, deliveries, dog walking, and rent payments on the residential side, and real-time analytics on heating, cooling, and floor space optimization for tenants on the commercial side—allowed RXR to pivot quickly once the pandemic hit. Suddenly, physical distancing and the need for contactless interactions became paramount for RXR’s tenants.

Today, this team is working around the clock to put in place the health and safety protocols that allow tenants to feel safe as they return to the office. Its platform—RxWell—includes a new mobile app that provides information about air quality and occupancy levels of a building, cleaning status, food delivery options, and shift times for worker arrivals. Employees have their temperatures taken via thermal scanners when they enter a building, and heat maps are available online that show how full a restroom or conference room is at any given time. “The investments we made in our digital capabilities before the pandemic are why we’re able to give people peace of mind now as they begin to return to work,” Rechler says.

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