McKinsey Quarterly - 2025 Issue 2

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Welcome to my ‘Reading Insights‘ series. Here is where I share simple takeaways and personal thoughts from articles, papers, and other readings that caught my attention.

Together, we’ll explore ideas beyond the “Book Notes” series that help us to improve how we think about management, leadership, and personal growth.

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And what are we reading today?

Today, we will talk about the McKinsey Quarterly 2025 Issue 2

The McKinsey Quarterly is one of the most consistent sources I read to stay sharp. Every issue brings a mix of research, case studies, and smart ideas that actually apply to real work. And what I like most is how practical it feels. Not just trends or opinions, but tools and thinking you can actually use.

This McKinsey Quarterly edition from 2025 is focused on growth. But not in the old way of just doing more. It’s about growing with purpose, with discipline, and with a deeper understanding of what drives performance today. The companies that grow are the ones that take growth seriously, not just as a goal, but as a mindset.

What makes this issue special is how it connects strategy with day-to-day actions. It shows that growth is still possible, but it takes courage and clarity.

Here’s what’s inside this McKinsey Quarterly issue:

Achieving Growth: Putting Leadership Mindsets and Behaviors into Action
The Next Big Arenas of Competition
10 Rules of Growth
How Top Performers Use Innovation to Grow Within and Beyond the Core
Harnessing Revenue Growth Management for Sustainable Success
Unlocking the Next Frontier of Personalized Marketing
Returning to the Office? Focus More on Practices and Less on the Policy
How an AI-Enabled Software Product Development Life Cycle Will Fuel Innovation

Achieving Growth: Putting Leadership Mindsets and Behaviors into Action

By Andy West, Greg Kelly, Jill Zucker, Kate Siegel, Louisa Greco, Michael Birshan, Rebecca Doherty, and Sascha Lehmann

👉 The Big Idea: Most leaders talk about growth, but few actually make it happen. This article reveals five essential mindsets that separate those who just dream about growth from those who turn it into real results. The key? Action over intention.

📌 The Summary: Everyone wants to grow, but the reality is tough. While many executives believe they are growth-minded, their daily behaviors often don’t support that. McKinsey’s research shows that only a small group of leaders, called “growth outperformers”, truly commit to growth. These leaders consistently act with boldness, listen deeply to customers, focus on long-term results, build strong teams, and create the operating discipline needed to turn ambition into execution.

The article breaks down each of these five growth mindsets. It shows how leaders must do more than set goals; they need to change how they allocate time, people, and capital. From a glassmaker like Corning doubling down on innovation, to a healthcare CEO expanding from Brazil to Saudi Arabia, to a bank in Asia prioritizing tech talent, the stories illustrate one thing: real growth demands discipline, risk-taking, and daily choices that reflect your biggest ambitions.

💡 Key Takeaways:
✔ Growth starts when leaders commit their time, money, and energy to long-term goals, even when things are uncertain.
✔ Acting boldly is more than making a statement; it means taking real risks, even in tough times.
✔ The best leaders don’t guess what customers want; they build systems to hear, learn, and act on it quickly.
✔ Growth companies build and rotate their best people into key roles, even if it means disrupting the org chart.
✔ Execution is what brings it all together. Without clear accountability and the right rhythm, growth stays on paper.

The Next Big Arenas of Competition

By Chris Bradley and Kevin Russell

👉 The Big Idea: A small group of industries is expected to shape the global economy over the next 15 years. These 18 emerging “arenas” could generate between 29 to 48 trillion dollars in revenue by 2040. What sets them apart? Rapid growth, big investments, and major technological or business model shifts.

📌 The Summary: Not all industries grow equally. Over the past decades, just a handful, like semiconductors and software, captured most of the value and innovation. Now, McKinsey identifies 18 new or continuing arenas that show the same pattern: big growth, high investment, and disruptive potential. These include AI software, digital ads, EVs, space, and even nuclear energy.

E-commerce
AI software and services
Cloud services
Electric vehicles
Digital advertisements
Semiconductors
Shared autonomous vehicles
Space
Cybersecurity
Batteries
Modular construction
Streaming video
Video games
Robotics
Industrial and consumer biotech
Future air mobility
Drugs for obesity and related conditions
Nuclear fission power plants

Some are evolutions of today’s industries, while others are brand new. All of them share key signs of an emerging arena: a tech or business model leap, growing market demand, and escalating investments. These arenas don’t just promise profits. They will reshape how we live, work, move, and consume in the next two decades. For leaders, investors, and innovators, this is the map of the future economy.

💡 Key Takeaways:
✔ The future economy will likely be dominated by 18 high-growth arenas, from AI and EVs to space and modular construction.
✔ These arenas share three traits: disruptive innovation, growing markets, and rising capital investment.
✔ By 2040, these industries could move from just 4% of global GDP to as much as 16%.
✔ Companies that want to lead in the next decade must position themselves inside or around these growing arenas.

10 Rules of Growth

By Chris Bradley and Rebecca Doherty, with Nicholas Northcote and Tido Röder

👉 The Big Idea: Growth is not just about chasing revenue. It’s about creating value over time. After studying 5,000 of the world’s biggest companies, McKinsey found ten clear patterns that separate the best performers from the rest. These ten rules offer a roadmap for companies that want to grow in a way that actually lasts.

📌 The Summary: Growing a business sounds simple, but doing it well is rare. Most companies grow slowly, and even fewer keep that momentum over time. This research shows that winning companies do a few specific things differently. They focus on areas where they already have an edge, they invest in the right trends at the right moment, and they make smart moves into adjacent industries or new regions, always with discipline.

Put competitive advantage first: Strong returns come from a business model with real advantages. Focus on building something that lasts and generates value.

Make the trend your friend: Grow where the market is already growing. Spot the tailwinds and align your business to ride them.

Don’t be a laggard: Outgrowing your industry is key. Even in slow sectors, gaining share matters and drives higher returns.

Supercharge your core: Most growth still comes from your core business. If your core is weak, it’s hard to win anywhere else.

Look beyond the core: Explore adjacencies and new industries. Smart expansion can unlock new sources of growth.

Grow where you know: Stick to what fits. Companies do better when they grow into similar or connected industries.

Be a local hero: Winning at home still matters. If you can’t grow locally, it’s much harder to grow globally.

Go global if you can beat local: Expanding internationally works best when your home business is already strong.

Acquire programmatically: Smaller, frequent deals tend to perform better than big, risky bets. Build M&A as a habit, not a one-off move.

It’s OK to shrink to grow: Let go of weak parts of the business. Pruning back can create space and resources to grow stronger elsewhere.

Importantly, growth is not just about expansion. Sometimes it means cutting back parts of the business that aren’t working, so you can reinvest where growth really happens. These ten rules aren’t magic, but they offer practical guidance for any company looking to grow with purpose and stay ahead.

💡 Key Takeaways:
✔ Companies that grow faster than their peers focus on competitive advantage, smart investments, and long-term thinking
✔ Most growth comes from the core business, but expanding into related industries or new markets can give an extra push
✔ Programmatic acquisitions, small, steady, and strategic, outperform big, risky deals
✔ The strongest companies know when to let go. Shrinking the business in the short term can unlock real growth later

How Top Performers Use Innovation to Grow Within and Beyond the Core

By Marc de Jong, Matt Banholzer, Rebecca Doherty, and Laura LaBerge

👉 The Big Idea: Innovation isn’t just for creating cool products. For the best-performing companies, it’s how they grow the core business and also expand into new markets. It’s not one or the other. It’s both. And they treat innovation as a serious strategy, not just a buzzword.

📌 The Summary: This article explains how the most successful companies use innovation as a growth engine, both inside their current industry and beyond it. These companies don’t just wait for the right moment. They build new offerings, explore new geographies, acquire capabilities, and even start new businesses in other sectors.

McKinsey’s survey of more than 1,000 companies found a clear pattern. Top performers were much more likely to invest in innovation, even during uncertain times. They also moved faster, scaled more confidently, and made smarter bets. It’s not about guessing. It’s about having a clear playbook for turning innovation into real, sustainable growth.

💡 Key Takeaways:
✔ Top companies treat innovation as a structured, long-term investment, not a side project
✔ Most growth still comes from the core, but stepping outside the core can unlock major gains
✔ The strongest players use innovation to both improve what they do today and shape what they’ll do tomorrow

Harnessing Revenue Growth Management for Sustainable Success

By Brian Henstorf, Pieter Reynders, Sheldon Lyn, Stefano Zerbi, and Leigh Phillips

👉 The Big Idea: Consumer goods companies can’t rely on price hikes alone to grow anymore. With inflation slowing down and volumes falling, the old tricks are not enough. This article shows how companies can update their approach to revenue growth by using all the tools available, not just pricing.

📌 The Summary: During the inflation surge, most consumer goods companies focused on raising prices. That worked for a while. But now that inflation is calming down, just raising prices doesn’t help as much. In fact, it may hurt. Consumers are more cautious, and they’re switching to cheaper brands or buying less altogether.

The article explains how companies can build a smarter revenue growth strategy using four levers: pricing, promotions, product assortment, and trade investment. It gives practical advice on setting realistic goals, understanding consumer behavior, using data and AI, and building stronger partnerships with retailers. Growth is still possible, but it requires a more thoughtful and balanced approach than before.

💡 Key Takeaways:
✔ Companies should use all four RGM levers, not just price, to stay competitive
✔ Understanding consumer behavior is key to making better pricing and promotion decisions
✔ AI and predictive tools can help design smarter pricing and product strategies
✔ Retailer relationships matter more than ever, especially with access to retail media and shopper data

Unlocking the Next Frontier of Personalized Marketing

By Eli Stein and Kelsey Robinson, with Alexis Wolfer, Gaelyn Almeida, and Willow Huang

👉 The Big Idea: Personalization is moving beyond simple suggestions and email campaigns. With AI and generative AI, companies can now create messages that feel truly personal, at scale. The next level of marketing is about using technology to speak directly to each customer, in their language, at the right moment.

📌 The Summary: Customers want to feel seen. They expect brands to understand their needs and offer something that matters to them. But doing this well for millions of people has always been hard. Now, with AI tools, brands can target smaller customer groups with the right promotions, the right message, and the right tone.

This article shows how companies can use AI for smarter promotions and more relevant content. With better data, decision tools, and a strong tech foundation, marketing teams can move faster and be more accurate. It’s not just about sending more messages, it’s about making each one count. The future of marketing is personal, automated, and smarter than ever.

💡 Key Takeaways:
✔ AI and generative AI help marketers personalize messages for different types of customers quickly and efficiently
✔ Smarter use of data and technology improves promotions and makes content more relevant and engaging
✔ A strong foundation in data, decision-making, design, distribution, and measurement is critical for personalization at scale

Returning to the Office? Focus More on Practices and Less on the Policy

By Aaron De Smet, Brooke Weddle, Bryan Hancock, Marino Mugayar-Baldocchi, and Taylor Lauricella

👉 The Big Idea: The office vs remote debate is not what matters most. What really drives performance is not where people work, but how they work together. Companies focusing only on return-to-office policies are missing the bigger point. The key is building strong day-to-day practices that support people wherever they are.

📌 The Summary: Many companies are still struggling to get the return-to-office model right. But the research in this article makes one thing clear: the working model alone does not improve outcomes. Whether teams are remote, hybrid, or in person, people report similar levels of effort, burnout, and satisfaction. So the solution isn’t the model itself, but the way the company supports its people.

This article focuses on five essential practices that actually make a difference: collaboration, connectivity, innovation, mentorship, and skill development. The problem is that while leaders think these are working well, employees often say the opposite. The gap in perception is hurting trust and performance. To fix this, leaders need to reconnect with teams, support better behaviors, and design work in a way that makes these five things part of the daily routine.

💡 Key Takeaways:
✔ The work environment matters more than the location. Focus on team dynamics, not just policies
✔ There’s a big disconnect between how leaders and employees see collaboration and support
✔ Five practices (collaboration, connectivity, innovation, mentorship, and learning) drive healthy performance
✔ Burnout and disengagement remain high unless these practices are actively improved

How an AI-Enabled Software Product Development Life Cycle Will Fuel Innovation

By Martin Harrysson, Aditi Chawla, Chandra Gnanasambandam, and Rikki Singh

👉 The Big Idea: AI is changing how software is built. Not just by speeding up coding, but by transforming the entire product development process, from idea to launch. This means faster cycles, smarter decisions, and better products that deliver value sooner.

📌 The Summary: This article explains how AI tools are being used not only to help engineers write code faster but to support the entire journey of product development. That includes defining the strategy, testing ideas, understanding customer feedback, and launching solutions faster than ever before. AI makes it easier to build better products by connecting the dots across data, teams, and tasks.

Companies using AI in the development cycle are seeing major shifts. Product managers become more like mini-CEOs, with visibility and ownership across the process. More good ideas get tested. Compliance, quality, and risk checks happen earlier. And customers get what they need faster. But to make it work, organizations must also rethink their tools, talent, and ways of working.

💡 Key Takeaways:
✔ AI reduces time to market by automating repetitive work and helping teams focus on what really matters
✔ Feedback loops are tighter, so products can deliver value to customers faster
✔ Product managers take on broader responsibilities, leading the full cycle from idea to delivery
✔ Companies need new skills, platforms, and structures to fully unlock the benefits of AI in product development

After reading these eight articles from the McKinsey Quarterly 2025 Issue 2, one thing becomes very clear. Growth today is about making better decisions, building the right habits, and creating real value over time. The McKinsey Quarterly doesn’t try to give one single answer, but it offers a pattern that shows up again and again across every piece.

The first big lesson is that growth starts with clarity. Whether it’s how leaders behave, how pricing is managed, or how products are built, the McKinsey Quarterly reminds us that progress only happens when people act with intention. Strategy is no longer about yearly planning. It’s about showing up every day with a growth mindset, using data, listening to your customers, and having the discipline to follow through.

The second theme across the McKinsey Quarterly is that companies need to work across boundaries. Innovation is about connecting across teams, listening more deeply to your market, and moving from idea to action faster. The best-performing companies, as shown in this issue of the McKinsey Quarterly, are the ones that balance bold moves with steady execution.

And finally, the human element is everywhere in this issue. The McKinsey Quarterly talks a lot about leadership, trust, skill-building, and collaboration. It’s a strong reminder that even with AI, automation, and new technologies, growth still comes down to people. People who feel connected. People who are empowered to act. People who know what good work looks like and are trusted to do it.

If I had to sum up this McKinsey Quarterly edition in one idea, it would be this: growth is not something that just happens. It’s something we build through focus, behavior, and better systems.

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