McKinsey’s The State of Organizations 2026 research: Three decisions to make now

Uncertainty is the new normal for organizations: 2026 has seen an unprecedented confluence of geopolitical, technological and economic disruption.

Organizations are trying to navigate these challenges, while also achieving productivity gains, revenue growth and cost reduction.

In 2026, companies are no longer focused on the short term performance; according to new research from McKinsey, “the emphasis has moved from short-term resilience to sustained productivity and long-term impact.”

This is a lofty challenge and figuring out a solution is much easier said than done.

For the State of Organizations in 2026 report, McKinsey surveyed 10,000 senior leaders across 15 countries to unpick the decisions they need to make to achieve long-term, sustained performance and value creation.

UNLEASH dug into the research to identify the top three actions leaders need to take now to thrive in these uncertain times.

1. Embrace dual transformation of tech and people

AI and other innovative technologies will power long-term performance and impact. This explains why 88% of leaders told McKinsey their organizations are deploying AI.

The issue is that organizations are stuck in piecemeal use cases that improve the efficiency of individuals. As yet, they are not seeing results, including return on investment, on a company-wide level.

McKinsey’s data found that 86% of leaders believe their organization was not prepared to adapt AI into day-to-day operations.

Plus, one in six said there was no clear C-Suite owner of AI in their organization, while just 14% said leaders were consistently championing AI adoption in their organization.

The solution is “an AI-enabled operating model design” – this requires embracing a double transformation that’s both technological and organizational.

The data shows that value from AI “depends as much on people as on technology investments…one executive noted that for every $1 spent on technology, $5 should be spent on people,” noted McKinsey’s report.

The data also found that organizations are 4x more likely to maintain top tier financial performance over the next decade if they prioritize their people.

“Achieving the productivity gains…of AI requires challenging and redesigning the operating model of individuals and teams, rewiring end to end, and building capabilities quickly and at scale,” added the research.

“Scenario-based workforce transformation will be a must-do to stay ahead”; “the organizations that thrive will be those that move from reacting to technology to shaping it – regularly stress-testing their operating models, leadership roles, and talent pipelines against alternative futures.”

McKinsey is clear that the CTO should lead the AI strategy, but to realize the full potential of AI, “CEOs need to work together with their chief finance, technology, and human resources officers to rethink their approach to AI transformation as a collective C-Suite agenda”.

This C-Suite collaboration becomes even more important as more autonomous types of AI crop up. Agentic AI is already being plugged into workflows, and one in four leaders told McKinsey that they expect AI agents to act as autonomous team members in the short term.

McKinsey’s report concluded that organizations can no longer ever see transformation as completed – transformation is becoming a “permanent condition.”

Ultimately, it is not about business as usual but “business as change.”

2. Find clarity on strategic business bets

2026 has brought new geopolitical shocks – notably, trade dynamics have become more unpredictable and disrupted by the Iran war and America tariff policy – and this environment is impacting businesses.

72% of leaders told McKinsey that geopolitical uncertainty has had a notable impact on their organization.

In this context, organizations need to focus on moving forward, not backwards, and for McKinsey the key to doing this, and propelling growth at the same time, is to have clarity of purpose and focus on core, strategic priorities.

Rather than boiling the ocean and diversifying, leaders must be disciplined. They need to prioritize the most impactful strategic priorities and not be afraid to divest non-core activities in order to grow.

Those that quickly reallocate budget and talent reduce inefficiencies, accelerate innovation, and enhance employee and customer satisfaction. In doing so, they improve their odds of beating competitors that have spread themselves too thin,” noted McKinsey’s report.

The research continued: “Organizations can free up capacity to take bold bets by shedding areas where they are no longer the best owner or letting go of activities that are no longer core to strategy.”

3. Cultivate human-centric leaders

As organizations adapt to these geopolitical, economic and technological challenges, they need great leaders.

Leaders of the past are not necessarily prepared for the reality of work in 2026. “They need new qualities to navigate an increasingly complex, high-stakes world,” especially as workforces increasingly comprise both AI and human workers.

McKinsey’s data calls for leaders to take an “inside out” approach, reflecting the concept that “leading others also means leading oneself.”

“The next frontier of leadership is about cultivating inner motivation—the willingness to continuously relearn new skills and content while learning new ways of working and being,” stated the report.

These future-ready leaders are human-centric, which brings significant organizational benefits. It drives up employee satisfaction and retention (56%), strengthens trust (56%), improves decision-making (42%), and drives more organizational adaptability and resilience (40%).

McKinsey calls on leaders to go on their own personal journeys to be more reflective and human-centric, but organizations also have a role to play.

The notion of human-centric leadership needs to cascade through the organization. It can unleash decision-making velocity as the operating model evolves.”

Ultimately, for McKinsey, organizations, and leaders, need to be thoughtful, strategic, courageous and adaptable if they want to turn these testing times into rewarding ones.