COVID-19:

Briefing materials
Global health and crisis response
Updated: June 1, 2020

Copyright @ 2020 McKinsey & Company. All rights reserved.

Current as of June 1, 2020

COVID-19 is, first and foremost, a global

humanitarian challenge.
Thousands of health professionals are heroically battling the virus, putting
their own lives at risk. Governments and industry are working together to
understand and address the challenge, support victims and their families and
communities, and search for treatments and a vaccine.

Companies around the world need to act promptly.

This document is meant to help senior leaders understand the COVID-19
situation and how it may unfold, and take steps to protect their employees,
customers, supply chains, and financial results.

Read more on [Link]

McKinsey & Company 2

Executive summary

The situation now Actions that institutions can take

At the time of writing, COVID-19 cases have exceeded 6.2 million and are Given the constantly shifting landscape and uncertainty ahead, thinking about return
continuing to increase worldwide. as a static plan could be ineffective. What’s needed is a return “muscle”: an
enterprise-wide ability to absorb uncertainty and incorporate lessons into the
As spring turned to summer, many US regions started to reopen, as did others in operating model quickly.
Europe, Latin America, and Asia. Despite ongoing public-health concerns, the
desire to spend and shop is palpable. Some Asian countries, such as China, have Companies and governments looking to adapt should develop lasting capabilities
kept incremental cases low, and are restarting economies. Others, such as India, that comprise this muscle: harnessing the speed and discipline exhibited during the
have experienced a steady rise in new cases since reopening. crisis, building capabilities for the ‘next normal’ at scale within your organization, and
monitoring / learning from the environment to bound-uncertainty faster than ever
In the past month, another group of countries such as Japan, South Korea and before.
Germany have lifted and then reinstituted public health measures due to a virus
resurgence.

How the situation may evolve

As different geographies reopen, uncertainties around case reduction might
persist. Both the WHO and CDC indicate the possibility of a COVID-19
resurgence in the fall, coinciding with flu season.
For the private sector, there are 4 key trends that may continue to shift for the next
18-24 months that need to be considered: 1. customer sentiments and
preferences have shifted online due to the pandemic, and may continue to shift; 2.
workplace norms have temporarily become remote, with several tech giants
entertaining a permanent shift to an altered workforce; 3. the deployment of
massive government stimulus packages and the rise of trade tensions contributes
to regulatory uncertainty that could persist for a few years 4. our knowledge of
how to test, trace, and treat the virus across different public health realities is
changing each day with no silver bullet.

McKinsey & Company 3

Contents
01 02 03 04
COVID-19: Transitioning to Planning ahead Appendix:
The situation now next-normal across multiple Scenarios and
horizons Return deep-dives

McKinsey & Company 4

 As of May 31, 2020

Propagation trend5 Europe

Total cases >2,142,500
>100,000 reported cases
Total deaths >180,100
10,000-99,999 reported cases
China
1,000-9,999 reported cases
Total cases >84,600
250-999 Total deaths >4,600
50-250
<50

North and Central

America1
Africa
Total cases >2,017,100
Total cases >100,600
Total deaths >122,400
Total deaths >2,600

Oceania4
Total cases >8,400
South America Total deaths >100

COVID-19 Total cases >800,800

Total deaths >38,200

status as of Middle East3 Asia (excl. China)2

May 31, 2020 Total cases > 505,000
Total deaths > 12,400
Total cases >349,200
Total deaths >9,700

1. Johns Hopkins data used for U.S., all other North America countries reporting from WHO
2. Includes Western Pacific and South–East Asia WHO regions; excludes China; note that South Korea incremental cases are declining, however other countries are increasing
3. Eastern-Mediterranean WHO region
4. Includes Australia, New Zealand, Fiji, French Polynesia, New Caledonia, Papua New Guinea
5. Increasing: > 5% increase in incremental cases over last 7 days, compared to incremental cases over last 8-14 days; stabilizing: -5% ~ 5%; decreasing: < -5%
Note: The boundaries and names shown on this map do not imply official endorsement or acceptance by McKinsey & Company. McKinsey & Company 5
Source: World Health Organization, Johns Hopkins University, McKinsey analysis
 As of May 28, 2020

In the US, Northeastern states tend to have the

highest prevalence and total case counts

Estimated
State with highest # Confirmed Estimated Prevalence
prevalence: of confirmed cases cases prevalence1 trend2
0–0.05% 0.05–0.1% 0.1–0.2% 0.2–0.3% 0.3–0.4%
New York 363,836 0.14%

Alaska Maine New Jersey 155,764 0.18%

Vt. N.H. Illinois 113,195 0.25%

California 99,387 0.07%

Wash. Mont. N.D. Minn. Wis. Mich. Mass. Conn. R.I.

Massachusetts 93,693 0.22%

Idaho Wyo. S.D. Iowa Ill Ind. Ohio Pa. N.J. N.Y.
Pennsylvania 72,778 0.10%
Ore. Nev. Colo. Neb. Mo. Ky. [Link]. Va. Md. Del.
Texas 57,230 0.06%
Calif. Utah N.M. Kan. Ark. Tenn. N.C. S.C. D.C.
Michigan 55,104 0.08%

Ariz. Okla. La. Miss. Ala. Ga. Florida 52,255 0.05%

Hawaii Texas Fla.

Maryland 47,687 0.23%

Georgia 43,983 0.09%

Connecticut 41,303 0.22%

1. Defined as number of new cases over past 14 days / total population
2. Defined as difference between latest estimated prevalence and estimated prevalence as of 1 week prior: < -0.01%
marked as decreasing, between – 0.01% and 0.01% marked as flat, > 0.01% marked as increasing
Source: Johns Hopkins University as of May 26, 2020 McKinsey & Company 6
 As of May 31, 2020

The disease progression appears to be following 4 phases

across geographies

Reopening

I. Localized clusters II. Uncontrolled acceleration III. Spread deceleration IV. Control

Small number of new Increasingly large number of Decreasingly large number of Number of incremental cases
Description cases incremental cases incremental cases reduced to low levels
(#) Reported cases
Example Asia Asia Europe Asia
geographies1 • Bhutan (33) • India (182,143) • Spain (239,600) • Mainland China (84,570)
• Laos (19) • Pakistan (69,496) • Italy (232,664) • South Korea (11,468)
• Fiji (18) Middle East • Germany (181,482) • Thailand (3,081)
Africa • Saudi Arabia (83,384) • France (148,436) • Hong Kong (1,088)
• Burundi (42) • Qatar (55,262) • Austria (16,638) • Taiwan (443)
• Namibia (21) North and Central America • Czech Republic (9,230) • Vietnam (328)
Oceania • Mexico (84,627) • Norway (8,411) Europe
• New Caledonia (19) South America Middle East • Iceland (1,806)
North and Central America • Brazil (465,166) • Israel (17,012) Oceania
• Belize (18) • Peru (148,285) North and Central America • New Zealand (1,154)
• Saint Lucia (18) • Chile (94,858) • United States (1,716,078) 2
• Canada (89,741)

1. Subject to change as data accumulates and more countries move through disease progression phases; dependent on volume of tests completed per capita
2. Overall, the U.S. is in Phase III, but the reality varies by state
Source: Empirical observation of pandemic epidemiologic characteristics of populations in each phase: Imperial College Study: [Link] McKinsey & Company 7
Johns Hopkins: [Link] WHO:[Link]
 The top 10 countries in reported COVID-19 deaths per As of May 28, 2020

capita are all in Europe and North America but all have
stable or declining case growth

Countries with the highest reported COVID-19 deaths per capita1,

Average case growth as percent, total # of deaths per 1M people Countries use different
methodologies for
attributing deaths to
Top 10 countries by Deaths per capita Phase II Phase III Phase IV
COVID-19, which
death per capita 89 accounts for some
78 differences
70
Case This trend could be
growth 48 49 47
partially attributed to the
37 37 37
rate (%)2 27
32 29 27 higher proportion of aging
23 26
16 18 populations in high-
9 7 10
income countries.
14 14 14 11 10 8 8 7 7 5 5 5 3 3 3 Additionally, greater
63 61 56 55 52 51 43 38 33 29 26 25
104 99 97 89 71 70 testing and tracing
Deaths 191 171 129 104
179 capacities of high-income
per 298
341 countries could increase
capita 435 398 329 the likelihood of a death
541 being attributed to
615 545
COVID-19.
804
Ireland

Switzerland

Colombia

India
South Africa
Japan
Sweden

Peru
USA

Iran

China
France

Netherlands

Austria

Romania

Israel

Ukraine

Philippines

Bangladesh
Algeria

Indonesia
Panama

DR

Russia
Czechia

Argentina
Finland

Saudi Arabia
Turkey

Pakistan
UK
Italy

Canada

Brazil

Moldova

Mexico

Chile
Spain

Ecuador

Portugal

Germany

Poland

Egypt

South Korea
Belgium

Denmark

Hungary

1. Excluding countries with fewer than 250 deaths; 2. Case growth is negative if not shown. It is calculated as the percent difference in the seven-day average of new cases from one
week ago to today; countries with case growth of 10% or more are considered “uncontrolled acceleration”; growth rates of 0-10% are considered stable
Source: World Health Organization, Johns Hopkins University, Our World in Data, World Bank McKinsey & Company 8
COVID-19 disease Reopening in the short-term
progression
Controlling the spread in the long-term

McKinsey & Company 9

 As of May 31, 2020

While reopening strategies vary, there are some clear trends across
countries
Likely to reopen Likely to reopen last, No plans released
early dates TBC

Hospitality Mass
Example Outdoor Construction/ 1:1 services (restaurants, Office Travel – Travel – gatherings
countries activity manufacturing Small shops Schools (e.g., salons) bars, hotels) buildings domestic international (1000+ people)
5
Austria

1
Czechia

2
UK
1 1
Spain1

3
Italy
4
Greece

6
Israel

7 8
France

1. Restaurants and bars with outdoor areas can open first, followed by indoor seating areas a few weeks later 5. Austria will slowly reopen its border with Germany, Switzerland, and Liechtenstein mid-May and fully reopen mid-June
2. The UK has an indefinite ban on crowds for sporting events 6. Finance and tech sectors allowed to return to work first; no plans released for other sectors
3. Italy is not planning on reopening schools until September 7. Employees still encouraged to work remotely if possible; businesses that cannot telework are encouraged to stagger shifts
4. Greece has announced a date for international travel, June 15, with most flights resuming July 1 8. Discussions of introducing travel bubble with Germany, Switzerland, and Austria in mid-June; TBC
Source: BBC, NY Post, NPR, US News, The Guardian, ABC News, BBC, University of Oxford, The Guardian, Forbes, Forbes; Government of Spain; Reuters; McKinsey & Company 10
EuroNews; CNN; Haaretz; Government of UK, USNews
 As of May 26, 2020

Different geographies have chosen to reopen with varying

numbers of cases and Rt values
Reopening Other example
Start of lockdown / strict social distancing restrictions Easing of restrictions (implemented or planned)
strategy Daily incremental cases for example countries countries
I II III IV
16,000 Reopened 1st Reopened 2nd and 3rd Allowed for Resumed domestic S. Korea
Hubei, wave of flights and outbound
Open waves of businesses all Removed full
China 6,000 Lockdown businesses (e.g., medical, utilities, businesses community highway and railway
when 4,000 begins1 (agriculture) groceries) to reopen2 lockdown3 travel4
cases are 2,000
near zero 0
23 January 01 February 01 March 11 13 24 27 01 April 08

II III
Open 8,000 Spain
Italy Lockdown Outdoor exercise, takeaway Shops and Bars,
when Rt<1 6,000 from restaurants, funerals
began Feb 231 cultural sites restaurants and
for an allowed reopened hairdressers
4,000 Germany
extended 2,000
period of
0
time 12
March
01
April 01 04 May 18 June 01

I II
Open Small rural Liquor Nigeria
India 8,000
when Rt>1 Reopened 1st wave of shops stores
driven by
6,000 Lockdown businesses (agriculture) open open
4,000 begins1 Pakistan
economic
2,000
factors
0
12 March 25 01 April 20 25 30 01 11 May June 01

1. Lockdown date is determined as the date at which both stay-at-home orders and workplace closures were enforced; 2. Upon individual assessment, as of April 7; 3. However, people encouraged to stay
home as much as possible and schools remain closed; 4. Domestic flights resumed excluding Beijing and outbound highway and railway travel resumed after presenting a phone app that indicates whether
they are contagion risks; 5. Public events canceled; restrictions on gatherings limited to no more than 1000 6. Stay-at-home orders, workplace closures, and restrictions on domestic travel were strengthened
McKinsey & Company 11
Source: [Link], [Link], [Link], [Link]; [Link]; NPR; Oxford Coronavirus Government Response Tracker
 As of May 28, 2020

For US states, there is minimal correlation

between Rt and reopening timing
R(t) values for U.S. states and their respective reopening dates1 Implications

There is no clear
correlation between R(t)
values and time before
reopening within the U.S

States seem to apply

their own guidelines
and perspectives to
reopen

Reopening date [date ending stay-at-home orders]

1. Currently announced dates by state; subject to change based on public health guidance and disease progression; “reopening” defined as end of stay-at-home order
* R(t) 1 is widely used as a crucial threshold for the rate of COVID-19 transmission; r(t) = 1 implies no exponential growth of cases and is often used as a proxy for reopening
Note: States which never had stay at home orders, or have not yet announced the end of their stay at home orders, are not included in analysis
Source: NYT, CNN Coalition of Northeastern Governors California Governor's Office Politico, World Economic Forum McKinsey & Company 12
Denmark and Austria show initial success As of May 31, 2020

in re-openings; however, more time is

needed to draw long-term conclusions Both Denmark and Austria see a consistent
decrease in numbers of new cases per day, even
after beginning to loosen restrictions
Key points during re-opening Start of lock down

Denmark – Daily new cases of COVID-19

B April 20th Hairdressers C May 11th: Shopping E May 21st: Cinemas,
Austria and Denmark have followed a similar path
and small business malls open; professional theatres, museums and for reopening:
400 open sports resume art galleries open
300 • Ensuring a gradual opening process, with public
200 places at highest risk of violating social distancing
100 (e.g., restaurants, cafes) to open last
0
13 07 09 11 13 15 17 19 21 23 25 27 29 01 03 05 07 09 11 13 15 17 19 21 23 25 27 29 31 • Leaving a 1-2 week period after every opening to
Mar April May monitor its impact and pivot if necessary (i.e., return
to harsher restrictions if there is a steep increase)
A April 14th: Denmark D May 18th: Restaurants/ bars
opens kindergartens and / cafes open with limited • Encouraging citizens to use digital tools to track the
primary schools (at peak capacity. Teenagers come
of daily cases) back to school
virus (allowing population to self-monitor)

Austria – Daily new cases of COVID-19 Some other factors that might have led to Austria’s
and Denmark’s success are:
400 C May 15th: E May 29th:
Restaurants/ bars/ Cinemas, • Both countries have relatively small economies, with
300 cafés open with swimming pools a relatively smaller movement across borders
200 limited capacity and gyms open1
(relative to e.g., Germany, France)
100
0 • Both countries implemented social distancing
16 07 09 11 13 15 17 19 21 23 25 27 29 01 03 05 07 09 11 13 15 17 19 21 23 25 27 29 31
measures at earlier stages than their neighbors
Mar April May
• Both countries have an advanced and universally-
A April 14th: All B May 1st: Shopping D May 18 : Students
th accessible healthcare system
shops under 440 centers, larger aged 6-14 return to
square meters shops, hairdressers school in “split”
allowed to open open classrooms

Source: [Link], John Hopkins University, WHO, BBC, Vienna official McKinsey & Company 13
1. With restrictions - cinemas can only fill up to 100 people at once
Initial reopening has not always been smooth – As of May 31, 2020

in some geographies, resurgence has required reinstitution of

public health measures
Daily new Reopening Resurgence Response
cases Mar 19: Lifted Apr 7: State of
state of May 4: State of
Mar 25: Daily emergency emergency
Japan 800 emergency case rate began declared extended to May 31
600 mandates in to increase
400 Hokkaido
200
0
15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25
March April May

Reopening Resurg. Response

May 20: Second peak in
May 9-10: Re-instituted cases, mainly in Seoul;
Apr 20: Workplaces, shopping malls, social distancing measures reopened high schools
May 7-9:
South 40
and parks gradually reopened May 6: Reopened bars Identified >50
and restaurants new cases
Korea 20

0
15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25
April
May

Reopening Resurg. Response

May 9-10:
May 6: Reopened Focal
May 10-11: Select districts to
shops and schools; resurgence
allowed people to based on Rt postpone exit from lockdown;
monitoring other districts moving forward
Germany 4,000 visit friends/family
with reopening plans
2,000

0
15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25
April May

Source: Statesman; Statnews; NPR; Al Jazeera; Time; Associated Press; The Guardian; Wired, Reuters; BBC; Financial Times; NY News; Oxford Coronavirus Govt Response Tracker McKinsey & Company 14
 As of May 28, 2020

Localized responses may reduce the need for

nation-wide measures

th
Jilin, China Localized Lockdown from May 10 until now
outbreak
May 7-10: May 10: May 18: Jilin
New cases Restrictions province placed on In China, several provinces like
in Jilin placed on the lockdown
12 city of Jilin (e.g., Heilongjiang, Hubei)
Shulan, Jilin appear to have successfully
10
responded to outbreaks with
8
localized measures
6

4 Throughout the pandemic,

2
specific regions/cities in China
had to be placed under a
0
8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 lockdown to contain the virus
April May
within the whole country
Schleswig-Holstein, Germany Localized Lockdown
outbreak extended until In Germany, 3 non-adjacent
140 May 18th districts with emerging local
Early May: May 11th: May 11th: Even
120
Clusters of new rest of while the rest of outbreaks, including Schleswig -
100 cases in the Germany
district appear opens
Germany opens,
Schleswig & Holstein, had extended their
80
Holstein remains
under lockdown for
lockdown by a week in
60
another week
comparison to the rest of
40 Germany
20

0
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25

April May
Source: Bloomberg; Guardian, [Link], DW, BBC, Politico, [Link] McKinsey & Company 15
COVID-19 disease Reopening in the short-term
progression
Controlling the spread in the long-term

McKinsey & Company 16

 As of May 31, 2020

Significant uncertainty remains around medium- and

long-term epidemiology trajectory of the virus spread
Illustrative

Epidemic peak / flattening

After initial peak/flattening, what are the

potential near-term scenarios as public
health actions are relaxed?
Available healthcare capacity

Initial epidemic phase

What are the longer term scenarios for
disease evolution in advance of an
endpoint (e.g., vaccine)?

Detail following

McKinsey & Company 17

 As of May 21, 2020

Global leaders are exploring various potential paths for the spread
of COVID-19 over the next 1-2 years
Geographies that seem
Paths forward Description Assumptions to follow these paths

Near-zero virus Lifting lockdown while Ÿ Governments consistently implement and enforce South Korea
implementing a collection of control measures that able to eliminate
Detected effective measures that transmission across their entire geography Iceland
new eliminate transmission quickly New Zealand
cases Ÿ Governments seek to eliminate transmission
and keep the number of cases
Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 quickly as opposed to achieving herd immunity
near zero
‘20 ‘21 ‘22

Balancing act: gradual or cycles Lifting lockdown gradually while Ÿ Measures that eliminate transmission are too Germany
implementing measures that costly to be implemented over time, so
Detected keep the number of cases at a governments relax the measures to support USA
new moderate level (well within the social and economic activity
cases capacity of healthcare UK
Ÿ The magnitude of oscillations depend upon the
systems) but do not completely
Detected speed of response to upsurge in cases
eliminate transmission
new
cases Leads to persistent or oscillating
Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 transmission until herd effects are
‘20 ‘21 ‘22 seen

Limited response Lifting lockdown without Ÿ The measures employed by governments are not May be applicable to
effectively implementing able to control transmission some low and middle
measures that control or eliminate income countries where
Ÿ For instance, measures that control or eliminate
Detected transmission, leading to a large lockdowns are not a
transmission are too costly or unfeasible to be
new resurgence and healthcare feasible tool and other
implemented over time and/or are not socially or
cases system overload measures cannot be
politically acceptable, so governments relax the
Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 implemented effectively
measures
‘20 ‘21 ‘22

Geographies may transition from the balancing act paths to the near-zero virus path as they are developing their capabilities to implement effective
transmission elimination measures (e.g., expanding testing capabilities, building PPE stocks).

Source: McKinsey analysis McKinsey & Company 18

 As of May 31, 2020

Key uncertainties that will likely drive medium-term scenarios

Focus of the document – 5 potential uncertainties Other uncertainties

1. True number of cases to date • Severity of illness

The true number of cases is only partly unknown due to asymptomatic or otherwise undetected cases. High • Fatality rate and drivers of mortality
quality seroprevalence studies are forthcoming, which will help answer this question • Long term or secondary complications
• Mutagenicity
2. Pathways to herd immunity
• Transmissibility in sub-population,
Uncertainty remains regarding whether antibody presence equates to immunity, and how long this immunity especially children
to COVID-19 lasts
• Infection intervals such as latent and
infectious periods
3. Seasonality of transmission • Asymptomatic / pre-symptomatic impact
While some studies show a modest decrease in transmissibility of COVID-19 during warmer, more humid on overall spread
months1, seasonality does not currently appear to significantly contribute to stopping the spread • Medium of transmission (e.g., air,
surfaces)

4. Effectiveness and implementation of public health interventions over the medium-term • Exposure risk factors (e.g., age,
occupation)
The medium-term effect of public health measures, as well as the ability to implement and maintain these
measures in specific geographies, are not yet fully understood • Mobility and movement patterns during
outbreaks and mitigation periods
• Population density characteristics
5. Adherence to public health measures
We are still learning how people’s adherence to public health interventions changes over time, which can
affect the effectiveness of these interventions

1. National Academies of Sciences, Engineering, and Medicine, “Rapid Expert Consultation on SARS-CoV-2 Survival in Relation to Temperature and Humidity and Potential for McKinsey & Company 19
Seasonality for the COVID-19 Pandemic”, April 7
 As of May 21, 2020

1. Official case and death counts are only

capturing a portion of the true totals
Sample-based testing suggests that Excess mortality exceeds reported COVID-19
official confirmed cases are only a small deaths and likely includes both missed
fraction of the total COVID-19 cases and incremental non-COVID
Reported prevalence (confirmed cases / population)
mortality While some testing surveys
Extrapolated prevalence sample-based testing Confirmed COVID-19 deaths and unaccounted excess deaths,
Compared to 2015-19 average death counts, varying dates
have methodological and
1.8% Reported COVID deaths Unaccounted death
accuracy challenges, far
New York State1
Antibody testing of ~15,000 residents 12.3% above average more people appear to
New York City 2.3%
have been infected with
U.K.
Antibody testing of the NYC residents
among the broader ~15,000 NY State
19.9% Mar. 14 - May 1
37k 17k COVID-19 than official case
residents counts imply
0.2% Spain 25k 6k
Gangelt, Germany2 Mar. 16 - May 3
14%
Antibody testing of ~1,000 residents This means that the infection
Stockholm 0.3% Italy 14k 11k fatality ratio may be lower
7.3% Mar. 1 – Mar. 31
Antibody testing of ~1,100 residents than previously thought
New York City 20k 4k
Geneva 1.0%
Antibody testing of ~760 residents 5.5%
Mar. 11 - May 9 However, most geographies
Netherlands 4k 4k
still appear to be far from the
Los Angeles, CA 0.7%
Antibody testing of ~800 residents 2.8 – 5.6%
Mar. 16 - Apr. 26 herd immunity threshold
Jakarta 3k
0.1%
Santa Clara, CA Mar. 1 – Apr. 30
Antibody testing of ~3,000 residents
2.5 – 4.2%
5 10 15 20 25 30 35 40 45 50 55
# of deaths (thousands)
1. Results not corrected for test accuracy
2. North Rhine-Westphalia’s reported prevalence data used

Source: MedRxiv, LAND .NRW, USC, NYTimes, Economist, NY State, Swissinfo, Bloomberg, New York State, MedRxiv, folkhalsomyndigheten McKinsey & Company 20
 2. Immunity to COVID-19 is key to return to the As of May 18, 2020
As of May 31, 2020

next normal, yet its prevalence and duration

remain only partly understood
While some early studies suggest …specific incidents of patients
potential longer term immunity similar retesting positive could suggest
Implications
to SARS-COV-1… shorter term immunity
The nature of immunity
Implications Accelerated transition is possible based on Transition to “next normal” is contingent upon
remains one of the biggest
accurate serological testing providing criteria for vaccine development
economic re-openings
Vaccines may not work or require frequent
unknowns about COVID-19
booster-shots

Supporting SARS- A Chinese study reports immune response to S- A Chinese study reports 30% of patients Serologic testing will be an
Data CoV2 protein in 100% patients (n=16) > 14 days post- (n=175) with mild symptoms developed low or impactful lever if immunity
symptom onset no detectable antibody response
evidence is of significant duration
South Korea CDC confirmed neutralizing antibody 48% of 25 recovered patients with neutralizing
in 100% of initial cohort of patients (n=25) antibody also tested positive for viral RNA in
Helper T cells, which aid in targeted antibody
South Korea Durable immunity following
responses against SARS-COV-2, were found in At least ~200 South Korean recovered exposure or immunization
15/18 and 10/10 patient blood samples in a patients tested positive again for COVID-19
German study and a Californian study, respectively is a pre-requisite for herd
- However, experts at the Seoul National
- These helper T cells were also found in 34% of University Hospital suggest that tests were
immunity
blood samples from uninfected patients false positives for active disease, picking up
suggesting cross-immunity between other non-infectious, dead virus fragments
human coronaviruses and SARS-COV-2

Indirect Immunity to SARS-COV-1, which shares 79% Immunity to seasonal coronaviruses (e.g.,
genetic identity, persists for 1-3 years in common colds) starts declining a few weeks
evidence recovered patients after infection

Source: Lancet, Journal of Immunology, Journal of Infectious Disease, Scientific American, BioRxiv, MedRxiv, NYTimes, Epidemiology & Infection, BiorXiv, MedRxiv, Aljazeera, McKinsey & Company 21
Business Insider
 As of May 31, 2020

3. While summer conditions may have some influence on COVID-19

transmission, other factors have a bigger impact
Transmission and Temperature Past influenzas Case study: countries
“The biggest driver of
temperature threshold pandemic with year-round warm
disease transmission is
seasonality climate
our behavior –
3.8% 56°C 50% 2.88 temperature and
the decrease in the temperature at which of influenza pandemics average R(t) factor for
humidity really didn’t
transmission rate (R factor), the spread COVID-19 can started in warm months – selected countries with mean much for disease
for every 1°C increase be eliminated 30% in the spring, 20% in warm weather year-round1 transmission, but our
above 25°C the summer implementation of
physical distancing did,”

Some studies show a A very high temperature is There is no clear correlation Despite warm weather, — Brian Labus,
decrease in COVID-19 able to hamper the spread between influenza many regions still have a PhD, MPH, assistant
transmission due to heat of COVID 19 outbreaks and temperature high R factor (high rate of professor at the School
above a certain threshold (although there is for transmission) of Public Health at the
seasonal flu) University of Nevada in
But that temperature is
never consistently Las Vegas
In practice, this does not Seasonality does not play Warm weather is not by
appear to remove the present on Earth’s a role in influenza itself enough to stop
need for other measures surface pandemics COVID-19

Variations in climate between regions do not appear to significantly

contribute to stopping the spread of COVID-19, in comparison to
other factors (e.g., implementing physical distancing measures)
1. Selected countries only for March 9th – March 31st – max r(t): Singapore 1.95, Indonesia 3.62, Brazil 3.0, Florida (US) 2.9
McKinsey & Company 22
Source: WHO, John Hopkins University Center for Communicable seasonal dynamics, Center for Infectious Disease Research and Policy, Harvard University, NYTimes
 As of May 31, 2020

3. Analysis of selected countries does not show clear correlation

between warm weather and COVID-19 transmission

Relationship between COVID-19 rate of transmission and weather in selected

countries (March 9th-31st) Implications
Average temperature There is no clear correlation
(Degrees Celsius, March 9 th st
– March 31 2020) between temperatures and COVID-
19 rate of transmission (shown by
35 R(t) value):
US-FL
30 Singapore Brazil Ÿ Indonesia, Brazil and Florida had
Indonesia some of the highest R(t) values,
R(t) average
25 despite warm weather

20 2.87 Ÿ Japan had the lowest R(t) values,

despite cold weather
Countries with
15 Japan warm climate1
France While warm temperatures might be a
Poland
10 Denmark 2.58 secondary factor for COVID-19 rate of
transmission, other factors (e.g.,
5 Countries with physical distancing measures,
temperate climate2 population density) have a much bigger
0 impact
0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0

R(t) value
(Maximum value, March 9 – March 31st)
th

1. Singapore, Indonesia, Brazil, US-Florida

2. Poland, France, Japan, Denmark

Source: John Hopkins University, WHO McKinsey & Company 23

 As of May 21, 2020

4. The medium-term effect of more moderate public Effective to reduce transmission

health measures is not yet fully understood Effective to reduce transmission

when coupled with other measures

A B C D
Testing, tracking, and
Physical distancing Travel restrictions targeted quarantine PPE & cleaning

Lockdowns have A vast majority of Examples of countries PPE and cleaning

proven effective to countries have imposed that have successfully measures (e.g.,
reduce rate of international and employed heavy widespread use of
transmission Rt domestic travel testing, tracking / masks) have been
Stricter
restrictions is addition tracing, and targeted used in addition to
implementation (e.g., 1.6 reduction
to other measures to quarantining include other measures in
for Austria, 2.0 for
limit imported cases Taiwan and South most countries
New Zealand)1
and reduce spread Korea

Some countries have implemented more moderate measures (e.g., distancing guidelines, closure of schools, banning public
events) to curb the spread of COVID-19 (e.g., reduction in Rt of 0.9 for Iceland, 1.0 for Germany)3
Partial / more
These measures were part of broader bundles of measures taken at the same time, which makes it difficult to accurately
moderate
predict how individual measures or incremental steps toward restarting the economy may affect transmission
implementation2
Efficacy of these measures will also depends on government’s ability to implement them in specific their specific geographies

1. Impact of full shut-down includes the impact of all the restrictive physical distancing measures put in place prior to shut-down
2. Moderate mitigation measures are often followed by more stringent measures if they fail to lower Rt below 1
3. Both Germany and Iceland have been aggressively ramping up testing, contact tracing and quarantine prior to school closure

Source: John Hopkins University, WHO, McKinsey Analysis McKinsey & Company 24
 As of May 25, 2020

4. Available tests have varying levels of speed, accuracy and

sensitivity
Point of care / beside Laboratory

FDA approved5 Other

Antigen Rapid PCR RT-PCR CRISPR Serology Clinical diagnosis

Description of Detection of antigen from Specialized solution breaks RT-PCR transcribes RNA Special molecules detect Detection antibodies in Mix of symptom, CT scan
methodology SARS-CoV-2 in nasal swab down RNA and replicates with enzymes to match the presence of SARS- serum sample and blood test to assess for
specimens genetic material for against markers CoV-2 genetic signature COVID-19
detection

Site of testing

Additional Provides results in about Quick turnaround including Require swab / aspirate Overall process can be Low effectiveness within 7 In addition to symptoms,
considerations 15 minutes, however 5-45 minutes at the collection methodology and turned around in ~1 hr days with 11% detection require positive viral CT scan
cannot tell the difference bedside and require swab longer turnaround of 48+ including incubation rate, and significantly and evidence of lymphopenia
between the two different utilization hours typically periods for isothermal increased over time3
SARS-CoV under amplification and detection
consideration

Accuracy and Test demonstrated 80% 96-99% based on targeted Up to 100% for RT-PCR Up to 100% specificity and As low as 11% detection 63% of patients with COVID-
sensitivity of clinical sensitivity publications2 but likely methodology with “air sensitivitiy6 however likely rate within the first 7 days3 19 also saw lymphopenia
testing compared to an EUA closer to RT-PCR rates of swab” collection issues closer to RT-PCR rates of with up to 93-97% based and 55% with dyspnea4
molecular device and 70% given collection errors resulting in evidence of 70% given collection errors on appropriate time of
clinical specificity of 100% 70% accuracy in some testing3
studies1

Systems and states will need to quickly develop guidelines on which tests should be administered with which patients and in which care setting

1 FDA EUA release; Tao Ai, et al. RSNA (2020); 2 FDA studies; based on influenza A & B: Mitamura K, et al. J Infect Chemother (2020); 3 Pao Y, et al. medRxiv (2020);
4 Huang C, et al. Lancet (2020); 5 [Link] 6 [Link]

Source: FDA, expert interviews McKinsey & Company 25

 As of May 27, 2020

4. Most countries are gradually increasing their testing capabilities

2.0
Daily tests conducted by country Ÿ Some countries have
Number of daily tests per 1K population1 drastically increased the
1.8 Russia
number of daily tests
performed (e.g., ~350k tests in
1.6
Portugal the U.S. currently compared to
<1k in beginning of March)
1.4
Ÿ Scientists are debating testing
United States
1.2 capabilities required to safely
United Kingdom
reopen (e.g., scientists are
Australia
1.0 suggesting 500k to 20M tests a
Italy day needed in the U.S.)
0.8
Belgium Ÿ Testing random samples of
0.6 Canada populations can help
overcome uncertainty around
0.4 current prevalence (e.g., bias
Malaysia
introduced by self-referrals) to
0.2 better understand future hospital
South Korea
needs and when and how to
India
0 relax restrictions on economic
Feb 23 Mar 08 Mar 22 Apr 05 Apr 19 May 03 May 17 May 26 activity
1. 7-day averages; where no daily data available, number of tests for previous day has been used

Source: Worldometer, Covidtracking, NYTimes, Ourworldindata McKinsey & Company 26

 As of May 26, 2020

4. Contact tracing seems to be one of the few tools

with high effectiveness and low economic cost

Ÿ Contact tracing allows for a

Testing combined with contact tracing has lower economic cost, but equal or precision approach –
higher effectiveness requiring only those at higher
risk to isolate from society
(vs. population-wide
Lower economic
cost

approaches)

Widespread use of masks Testing, contact-tracing and

Ÿ Several scientific studies
and other PPE targeted quarantine suggest that contact tracing
is still likely to be helpful
even when a large fraction of
Saving cases are asymptomatic
Livelihoods because those most likely to
transmit the disease are
isolated
Higher economic

Community wide lock-down /

shelter-in- place Ÿ Evidence suggests that
tracing is likely to have
maximum impact when used
cost

in combination with
Less effective tools More effective tools widespread testing and can
be combined with other
Saving Lives measures

Source: Nejm, Medrxiv, Journal of Hospital Infection McKinsey & Company 27

 As of May 31, 2020

4. Recent studies suggest that wastewater

surveillance could serve as an early warning tool
Wastewater and sewage surveillance could potentially be better predictors of
COVID-19 transmission compared to standard testing, which is biased towards
symptomatic transmission
In middle- to low-
1 COVID-19 viral particles have been found to be shed in stool in asymptomatic and income countries
pre-symptomatic patients1,2 and in raw wastewater3 where testing capacity
is limited, wastewater
2 A recent study in CT found that viral RNA levels in sewage sludge were strongly surveillance may be
correlated with new cases 7 days later and hospital admissions 3 days later able to ascertain the
(R2=0.99)4 true level of
COVID-19 viral RNA concentrations with (A) daily new COVID-19 cases community
and (B) hospital admissions4 transmission and
A B influence decisions on
public health
measures

R2 is a measure of correlation between two variables ranging from 0 to 1. The closer R2 is to 1, the more strongly correlated two variables are to each other

Source: 1. JAMA; 2. Nature; 3. Science of the Total Environment; 4. MedxRiv; McKinsey & Company 28
 As of May 28, 2020

4. Meanwhile, the development of a COVID-19

vaccine still faces significant uncertainties
Only one COVID-19 vaccine, out of 100+, is truly in Uncertainties
phase II of clinical trials Implications
Select vaccines by start date and phase of clinical trial Success rate: less than 10% of drug
Phase I Phase I/II Phase II trials are ultimately approved – COVID-19 Although developing a vaccine
vaccines may be even more prone to for COVID-19 is a global priority
2020 Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
failure due to sped up research process and some progress has been
CanSino and the A.M.M.S.
achieved, its success is based
Moderna Time to market: The shortest timeline on multiple factors – many of
for phase II and phase III1 vaccine trials which are highly variable
BioNTech and Pfizer
was 21 months (Ebola)2 – it is unclear to
Inovio Pharmaceuticals what extent the timeline can be shortened
for COVID-19 Maintenance of other health
Sinovac
measures, in the near term,
Wuhan Institute and Sinopharm
Distribution: A vaccine factory usually may be important to mitigate
University of Oxford takes ~5 years to built and costs 3x transmission of COVID-19
Imperial College
standard pharma factories due to high before a vaccine is developed
customization – factories for COVID-19
Novavax need to be built now, despite not knowing
CureVac
whether the factory will eventually be used

Sanofi and GSK

Public uptake: 25% of Americans have
Vaxart no or little interest in taking a COVID-19
Altimmune
vaccine, which might influence whether
the vaccine reaches the public sufficiently
Janssen to establish herd immunity

Source: Reuters, Time, [Link], NYTimes

McKinsey & Company 29
1. Excluding the timeline for H1N1 2009 due to facilitated conditions and already-established infrastructure (H1N1 is a strain of a basic flu vaccine)
2. The rVSV-ZEBOV vaccine; phase II and III trials started in March 2015 and ended in December 2016
5. To achieve significant declines in mobility, it As of May 20, 2020

appears most countries had to implement

stringent measures
Impact on mobility (%) due to stringency measures There is a clear relationship
implemented on n transit stations, and retail/ recreation Australia Singapore between the increase of
facilities Belgium South Africa stringency and a decrease in
France United Kingdom mobility:
Average difference from baseline mobility (transit stations, retail/recreation facilities)
India United States
Ÿ An exception is the US, where
20% Italy Brazil after a ~65 stringency index,
Japan the mobility reduction seems to
0% plateau (potentially due to
varying levels of worry about
COVID-19)
-20%
Ÿ An opposite exception would
be the UK, where despite lack
of strict measures initially, the
-40%
public has decreased its
mobility (probably due to the
-60% awareness of COVID-19 in
Europe)
This indicates that, in addition
-80%
to stringency imposed by the
governments, various
-100% sociological factors are at play
0 5 10 15 20 25 30 35 40 45 50 55 60 65 70 75 80 85 90 95 100 in reducing mobility
Overall Oxford stringency index

Source: Google mobility report, Oxford stringency index McKinsey & Company 30
 As off May 27, 2020

5. Adherence to physical distancing measures

appears to decrease over time
Social distancing index over time in states where lockdown orders are still in place1
Lockdown enforced Social distancing index Daily incremental cases Change in social distancing index
Starting in mid-March, when most
Social distancing index Daily incremental cases stay-at-home orders were
New York
150 -25% 15,000 announced across the U.S.,
people began physical distancing,
100 10,000
going out less and making fewer
50 5,000 trips
0 0 By mid April, people in several
Mar Mar Apr Apr Apr Apr May May May May
states seemed to develop
22 29 5 12 19 26 1 8 15 24
“quarantine fatigue” and began to
increasingly go out, despite the
Illinois 150
-39%
6,000 extension of lockdown orders
100 4,000
50 2,000
0 0
Mar Mar Apr Apr Apr Apr May May May May
22 29 5 12 19 26 1 8 15 24
“It just seems that people are getting
Washington a little tired collectively of staying at
100 1,500 home after we passed that one-
-27%
1,000 month mark,”
50
500 - Lei Zhang, director of the Maryland
Transportation Institute at the
0 0
Mar Mar Apr Apr Apr Apr May May May May University of Maryland, College Park
22 29 5 12 19 26 1 8 15 24
1. Combination of: the percentage of people in a state or county who are staying home, the number of trips per person per day, the distance of those trips and
the number of trips taken beyond county or state borders. Measured using cellphone data.
Source: University of Maryland, NYTimes McKinsey & Company 31
Contents
01 02 03 04
COVID-19: Transitioning to Planning ahead Appendix:
The situation now next-normal across multiple Scenarios and
horizons Return deep-dives

McKinsey & Company 32

 Current as of May 27, 2020

What is happening in China: emerging “post-COVID-19 trends”

China “reopening” Changes since COVID

Chinese consumers are gradually 1 Digitization Ÿ Stickiness of digital: >55% consumers more likely to buy groceries online,
regaining their confidence leading RE firm used “virtual showrooms” with in-house salesforce
Ÿ Even traditionally physical-dominant sectors were forced to go digital: e.g.
Consumers optimistic that the direct-to-streaming film distribution bypassing cinemas
50% economy may recover soon
after the end of the outbreak
2 Decoupling of the Ÿ Localization: Japan has earmarked US$2.2B to help manufacturers shift
Sectors recovering at different rates, production out of China; similar calls in US and Australia
connected world
with large industrial firms recovering Ÿ Accelerated retreats: Samsung announced moving manufacturing
at a faster pace than SMEs and out of China
services
3 Widening Ÿ Resourceful players who use digital are growing: ByteDance (TikTok)
Work resumption rate for large
99% enterprises outside Hubei as of
March 28
performance gap
Ÿ
hiring 10,000 new employees in anticyclical fashion
People unable to embrace remote working trend face a downturn: ~2.3mn
people claimed unemployment insurance in Jan and Feb
Work resumption rate for all
92% government-owned firms as of
early March 4 Consumers Selectiveness in spending: overall spending lowered (consumer confidence
index decreased ~7% in March YoY, but consumers over-index on healthy
growing up products (e.g. ~75% consumers with strong preference to exercise and
Work resumption rate for small
77% and medium enterprises
outside Hubei as of March 29
healthy eating post crisis; e.g. ZhongAn PHI premium grew 60%+)

5 Stakeholder Private sector becoming significant force to accelerate country agenda: e.g.,
Restaurants reopened, but only
40% 20% of workers returned as of
mid-March
capitalism
“Health Code” by Alibaba; Taikang owned hospital leading virus fight

Source: Press releases, McKinsey practice surveys

 Current as of May 27, 2020

The Four Forces that are shaping the Next Normal

Metamorphosis of An altered Regulatory Understanding

demand workforce uncertainty of the virus
Increased online sales is not a new Remote work is the new norm. Before COVID-19, the world was Around the globe, communities are
phenomenon, but the speed with Some are thrilled about facing growing statist sentiments as reopening amidst different public
which new generations of productivity and flexibility, and the well as declining support in the free- health realities (e.g., stage of crisis,
consumers have gone online (20- time reclaimed from commutes. market’s ability to distribute wealth. level of virus containment, levels of
60% more consumers are now Others cannot wait to get back to As governments around the world testing and tracing). On top of that,
digital1) has led to a metamorphosis the office. Up to one-third of jobs sign up huge COVID-19 stimulus our understanding of the virus
of demand that is unlikely to reverse in US– 86% of them low income - packages (~3x compared to 2008 continues to shift, with new studies on
quickly. It is also generating entirely may be vulnerable2. Strangely, financial crisis among G20 testing, transmission and treatment
new patterns of behavior. Switching with so many sidelined, some countries3), new regulations arising each day (e.g., ~171 vaccine
for instance has accelerated. In a industries are experiencing favoring local economies are candidates in development4). This
world of lower overall consumption, shortages. Many people cannot increasingly likely. This uncertainty changing landscape with idiosyncratic
access to the digital consumer return to their jobs because of can lead to new complexities in considerations by region results in a
dollar is shaping the new resilients health-related issues, and newly government relationships, supply constantly changing set of safety
needed skill sets are in short chain, pricing economics and interventions to protect customers,
supply consumer behaviors. employees, and citizens at large.
1. McKinsey & Company COVID-19 US Consumer Pulse Survey
2. "Lives and livelihoods: Assessing the near-term impact of COVID-19 on US workers", [Link], 2020.
3. 2019 GDP taken into account for values related to COVID-19 crisis; 2008 financial crisis data based on data published by IMF in March 2009; G20 here excludes Turkey and EU (no data available)
4. As of May 21, 2020; source: Milken Institute, BioCentury, WHO, Nature, [Link], ChiCTR, [Link], press search
McKinsey & Company 34
Metamorphosis of demand – B2B and B2C
Lockdowns have accelerated digital adoption, which is driving entirely new patterns of consumption

The new consumer …is more willing to …and is refocusing towards

shops online far more… switch across brands… domestic & local activities

Net intent1 % consumers who Post-COVID consumer

By category, channel switched expectations This change is
and intent to continue Intent to increase or decrease time spent
not just restricted
20 to B2C; B2B
Decrease Increase
10
customers are also
New brands 18% 64% Retail online -13 23 similarly changing
0
Grocery stores -15 24 their patterns
-10
Retail stores -19 24 (e.g., X% of physicians
-20 now prefer remote
New website 14% 50% Domestic travel -24 26
-30 sales from
Grocery online -27 26 pharmaceutical reps)
-40
Movies, events -29 25
-50 New grocery
14% 55% Mall -29 20
-60 store
Online In-store Intl. travel -34 21

1. Categories: Accessories, Appliances, Jewelry, Footwear, Alcohol, Apparel, OTC medicines, Fitness, Tobacco, Snacks, Electronics, Skincare, Personal care,
Print, Delivery, Groceries, Supplies, Vitamins, Child products, Home Entertainment
Source: McKinsey & Company COVID-19 US Consumer Pulse Survey 4/20–4/26/2020, n = 1,052, sampled and weighted to match US general population 18+ years McKinsey & Company 35
Workforce demands are shifting, with new
hybrid-remote work models emerging
Traditional jobs are likely at risk – with one-third of current jobs At the same time, new ways of working are taking precedence
estimated as being vulnerable1 due to physical distancing e.g., near-shoring supply chains, remote working

~44-57M jobs are vulnerable1 in the short term, of which 86% are low-income
83% of employees are willing to work remotely after the
Vulnerable jobs,1 by industry, net of jobs created, millions Lower range emergency (vs. 37% pre-COVID-19)
Upper range
0 1 2 3 4 5 6 7 8 9 10 11 12
Accommodation and food services
Retail trade >50% of respondents recommend improvement of tech
Healthcare and social assistance tools and a review of company welfare policies to
Construction
Administrative, support, and waste services enable Virtual Working “at scale”
Government
Others2
Manufacturing
Transportation and warehousing
Arts, entertainment, and recreation
33% of respondents with a client-facing role report
Wholesale trade and increase in client satisfaction vs. only 14%
Real estate and rental reporting a decrease
Educational services
Personal services
Professional, scientific, and technical services
Religious services
6% Increase in efficiency through Virtual Working,
reported by respondents
Simultaneously, there are under-matched demand pulls as: a) few sectors are
facing surging demand (e.g., 2-3 million new jobs in groceries, pharmacies and
delivery services) and b) new skills are required (e.g., physical retail moving to online Several companies, incl. Facebook and Twitter have
sales)
announced intention to expand the option for
These forces may require the adaptation of workforces to new industry majority of its workforce to be remote
realities and relevant reskilling

1. Vulnerable jobs are subject to furloughs, layoffs, or being rendered unproductive (for e.g., workers on payroll but
not working) during periods of high physical distancing; 2 – Others include utilities, repair and maintenance, finance
and insurance, information, mining, quarying and oil & gas, agriculture, forestry and fishing
Source: LaborCube, McKinsey Global Institute Analysis - “Lives and Livelihoods: Assessing the near-term impact of McKinsey & Company 36
COVID-19 on US workers; COVID-19 Smart working survey, 4,034 respondents, Italy
Government stimulus packages on top of
growing statist sentiments and free-market
backlash may lead to regulatory shifts
Regulatory uncertainty may require corporate adaptability to manage this complexity

Declining confidence Governments worldwide are Resulting potential

in free market mechanisms & providing stimulus packages3 complexity
rising statism1 to alleviate COVID-19 impacts for organizations

3X • New relationship with government

– with depth of change unclear
greater response from G-204 governments compare • No global playbook given highly
to 2008 financial crisis (11.4% vs 3.5%) varied approaches and
competencies by country

• Likely new regulations affecting

Moves ignoring free markets and favoring onshoring are manufacturing locations and
likely to accelerate in the post-pandemic world - supplier economics
• Japan sanctioned incentives worth $2.2B (Apr 2020) • Disruption to global supply chains
to push local firms to move back manufacturing of (for e.g., move to near-shore,
high value-added products from China heavily controlled vs global,
decentralized partners)
• With output constant, US imports of manufacturing
goods from 14 Asian LCCs decreased by 7% from • 2nd order implications on pricing,
2018 to 20192 (first decrease in 5 years) competition and consumer
behavior

1 Source: Bloomberg, Forbes;

2 Source: Kearney ‘US Reshoring Index 2019’ report, LCC – low cost countries;
3 2019 GDP taken into account for values related to COVID-19 crisis; 2008 financial crisis data based on data published by IMF in March 2009, includes
discretionary measures announced for 2008-2010; 4 - Excludes Turkey and EU (no data available); McKinsey & Company 37
The evolving understanding of the virus and the shifting impacts
of the crisis may require a changing set of responses
Shifting perspectives and uncertainty on 3 key topics requires adaptability on implementing safety measures

1 Shifting public health reality across different geographies globally 2 New information on virus testing efficacy and
transmission patterns
Public health situation such as hospital capacity, reopening guidelines/timing,
testing and tracing vary widely across regions
For instance, many countries had to re-institute lockdown measures after
resurgence events post re-opening

Japan Reopening Resurgence Response

Daily new
cases Mar 19:
Apr 7: State of
800 Lifted state of
emergency
Mar 25:
Daily case
emergency May 4: State New transmission incidents indicate emerging ways of virus
declared of emergency
600 mandates in rate began to extended transmission (for e.g., droplet transmission due to air-conditioning)
400 Hokkaido increase

200
0

South Korea 3 Emerging solutions on how the virus will be

May 9-10:
Apr 20:
Workplaces,
May 6: May 7-9:
Re-instituted
social
treated
shopping malls, and
parks gradually Reopened Identified distancing
bars and >50 new
40 reopened
restaurants cases
20
0

Germany
May 9-10: Post May 10:
May 6: Focal Select
Reopened resurgence districts
4,000 shops; allowed based on Rt to postpone
family visits monitoring exit from
lockdown
2,000 Nearly 171 vaccine candidates (13 in clinical trials, 28 entering trials
0 in 2020, others unknown) and over 210 therapeutics1 candidates
are currently in consideration

1. As of May 20, 2020 - Source: Milken Institute, BioCentury, WHO, Nature, [Link], ChiCTR, [Link], press search
Source: [Link] Statnews; NPR; Al Jazeera; Time; Associated Press; The Guardian; [Link]
McKinsey & Company 38
beat-covid-19-have-to-do-it-again/; Reuters; BBC; Financial Times
Return is a muscle, not a plan

The four forces may continue to shift for the

next 2 years, implying that thinking about
return as a static plan could be ineffective.

Adapting to the changing landscape likely requires a

muscle comprised of 3 separate capabilities:

1 2 3
Strengthen the Increase pace & Develop ability to
speed and quality of skill- handle uncertainty
execution building and of through real-time
discipline used for scaling new microdata monitoring
the last 60 days working models and iteratively-testing
operating plans

McKinsey & Company 39

Return is a muscle, not a plan
How can we rewire the organization for speed and embed in our long-term DNA?

Strengthen the “fast-twitch” Increase pace & quality Learn from the environment
muscle you have been using of skill building and bound-uncertainty faster
for the past 60 days at scale than ever before

Faster decision making “out of necessity” Process-based capabilities: can we Develop an enterprise-wide ability to absorb
involving only critical decision makers execute well? uncertainty and incorporate learnings into the
operating model quickly
Basing decisions on minimum and essential Relationship-based capabilities: do we know
information our counter parties well? Modify plans and base decisions on updated
projections —supported by continually
Leaders’ time freed up from non-priority activities Knowledge-based capabilities: do we have refreshed microdata about what’s happening
unique insights?
Ubiquitous license to act at all levels

Stepping up individual performance

McKinsey & Company 40

Contents
01 02 03 04
COVID-19: Transitioning to Planning ahead Appendix:
The situation now next-normal across multiple Scenarios and
horizons Return deep-dives

McKinsey & Company 41

Leaders need to think and act across 5 horizons
From Resolve to Resilience and Reimagination to Reform

Reform
Reimagination
Return
Be clear about how the
Resilience
regulatory and
Re-imagine the “new competitive
Resolve
normal” – what a environment in your
Create a detailed plan discontinuous shift industry may shift
to return the business looks like, and
Address near-term back to scale quickly, implications for how
cash management as the virus evolves the institution should
Address the immediate challenges, and and knock on effects reinvent
challenges that broader resiliency become clearer
COVID-19 represents issues during virus-
to the institution’s related shutdowns and
workforce, customers economic knock-on
and business partners effects
McKinsey & Company 42
Leading insights across the 5 horizons of crisis response
Read the latest thinking from across our practices

Resolve Resilience Return Reimagine & reform

Tuning in, turning outward: Cultivating Safeguarding our lives and our Return: A new muscle, not just a plan The future is not what it used to be:
compassionate leadership in a crisis – livelihoods: The imperative of our time Return is not a phase; it’s a way of Thoughts on the shape of the next
By tuning inward to cultivate awareness, – A discussion on how to deal with and operating. A nerve center can help build normal – Seven elements for business
vulnerability, empathy, and compassion, bound the uncertainties surrounding the capabilities that businesses need in leaders to consider as they plan for the
and then turning outward to comfort and COVID-19 and how the future could the “next normal.” next normal.
address the concerns of stakeholders, unfold
leaders can exhibit individual care, build From surviving to thriving:
resilience, and position their A global view of how consumer Reopening safely: Sample practices Reimagining the post-COVID-19 return
organizations to positively reimagine a behavior is changing amid COVID-19 – from essential businesses- The safety – Four strategic areas to focus on when
post-crisis future. Insights into consumer behavior from our protocols of hospitals, grocery stores, reimagining the business model:
global survey series that track consumer and other establishments that stayed recovering revenue, rebuilding
The CFO’s role in helping companies sentiment across 41 countries through open during the COVID-19 pandemic can operations, rethinking the organization,
navigate the coronavirus crisis – the crisis offer ideas for businesses preparing to and accelerating the adoption of digital
Critical steps CFOs and finance welcome employees and customers solutions
organizations can take across three back.
horizons: immediate safety and survival, Lives and livelihoods: Assessing the
near-term stabilization of the business in The Restart: Eight actions CEOs can near-term impact of COVID-19 on US
anticipation of the next normal, and take to ensure a safe and successful workers- Up to one-third of US jobs may
longer-term preparations for the company relaunch of economic activity – Actions be vulnerable and more than 80% are
to make bold moves during recovery. for Return based on research and held by low income workers
conversations with leaders of large
Responding to coronavirus: The French, European, and Asian companies Getting ahead of the next stage of the
minimum viable nerve center – from all sectors, who provided a broad coronavirus crisis – How to launch a
Approach and key considerations when view of their issues and concerns about “plan ahead team” that works across
developing the COVID-19 response the end of lockdown multiple time horizons, using five frames
structure and minimum viable nerve
center

McKinsey & Company 43

Contents
01 02 03 04
COVID-19: Transitioning to Planning ahead Appendix:
The situation now next-normal across multiple Scenarios and
horizons Return deep-dives

McKinsey & Company 44

 The Four Forces that are shaping
the Next Normal

Macro-economic
scenarios Metamorphosis An altered
of demand workforce

Regulatory Understanding
Return as a uncertainty of the virus
muscle

McKinsey & Company 45

 Current as of May 20, 2020

The Imperative of our Time

“Timeboxing” the Virus and the Economic Shock

1
Safeguard our lives
1a. Suppress the virus as fast as possible
1b. Expand testing, quarantining and treatment capacity
1b
Imperatives

1c. Find “cures”; treatment, drugs, vaccines 1a 1c

2 2a
2c

Safeguard our livelihoods

2a. Support people and businesses affected by lockdowns 2b
2b. Prepare to get back to work safely when the virus abates
2c. Prepare to scale the recovery away from a -8 to -13% trough

Source: McKinsey analysis, in partnership with Oxford Economics McKinsey & Company 46
 Current as of May 20, 2020

Scenarios for the Economic Impact of the COVID-19 Crisis

GDP Impact of COVID-19 Spread, Public Health Response, and Economic Policies
Rapid and effective B1 A3 A4
control of virus spread
Strong public health response succeeds
in controlling spread in each country
within 2-3 months Virus contained, but sector damage; lower Virus contained; growth returns Virus contained; strong growth rebound
long-term trend growth
Virus Spread &
Public Health Effective response, but
Response (regional) virus recurrence B2 A1 A2
Initial response succeeds but is
Effectiveness of the public insufficient to prevent localized
health response recurrences; local social distancing
in controlling the spread Virus recurrence; slow long-term growth Virus recurrence; slow long-term growth Virus recurrence; return to trend growth
restrictions are periodically reintroduced insufficient to deliver full recovery with muted world recovery with strong world rebound
and human impact
of COVID-19
Broad failure of public health
interventions
B3 B4 B5
Public health response fails
to control the spread of the virus
for an extended period of time Pandemic escalation; prolonged downturn Pandemic escalation; slow progression Pandemic escalation; delayed but full
(e.g., until vaccines are available) without economic recovery towards economic recovery economic recovery

Ineffective Partially effective Highly effective

interventions interventions interventions
Self-reinforcing recession dynamics Policy responses partially offset Strong policy responses prevent
kick-in; widespread bankruptcies and economic damage; banking crisis structural damage; recovery to pre-
credit defaults; potential banking crisis is avoided; recovery levels muted crisis fundamentals and momentum

Knock-on Effects & Economic Policy Response

Speed and strength of recovery depends on whether policy moves can mitigate
self-reinforcing recessionary dynamics (e.g., corporate defaults, credit crunch)

Source: “Safeguarding our lives and our livelihoods: The imperative of our time,”; available online at [Link] McKinsey & Company 47
corporate-finance/our-insights/safeguarding-our-lives-and-our-livelihoods-the-imperative-of-our-time
 Current as of May 20, 2020

Shape of the COVID-19 impact: the view from global executives

“Thinking globally, please rank the following scenarios in order of how likely you think they are to occur over
the course of the next year”; % of total respondents1
Most likely scenario, World April → May surveys
Rapid and effective B1 15 → 13% A3 16 → 17% A4 6 → 4%
control
of virus spread

Virus
spread Effective response,
but (regional) virus
B2 11 → 14% A1 31 → 36% A2 6 → 5%
and public
resurgence
health
response

Broad failure of B3 3 → 2% B4 9 → 7% B5 2 → 1%
public health
interventions

Ineffective Partially effective Highly effective

interventions interventions interventions

Knock-on effects and economic policy response

1. Monthly surveys: April 2–April 10, 2020, N=2,079; May 4-May 8, 2020, N=2,452

Source: “Crushing coronavirus uncertainty: The big ‘unlock’ for our economies”; available online at [Link] McKinsey & Company 48
coronavirus-uncertainty-the-big-unlock-for-our-economies; McKinsey survey of global executives
 Current as of May 20, 2020

Scenarios B2, A1, A2, and A3 have varying profiles of

effectiveness of public health and economic interventions

B2 A1 A2 A3

Virus recurrence; slow long-term growth Virus recurrence; slow long-term growth Virus recurrence; return to trend growth Virus contained; growth returns
insufficient to deliver full recovery with muted world recovery with strong world rebound

Ineffective economic Partially effective economic Highly effective economic Partially effective economic
interventions, effective public interventions, effective public interventions, effective public interventions, rapid and effective
health response health response health response control of virus spread
Slow long-term growth insufficient to Slow long-term growth with muted world Return to trend growth with strong world Return to trend growth with world rebound
deliver full recovery of world output to recovery returning output to 2019Q4 levels rebound returning output to 2019Q4 levels returning output to 2019Q4 levels in late
2019Q4 levels until 2026 in late 2022 in late 2021 2020
Economic policy is ineffective spurring self- Economic policy responses are effective in Economic policy responses deliver robust Economic policy responses are effective in
reinforcing recession dynamics and meager stopping the rapid decline of the economy in relief packages that not-only back-stop activity stopping the rapid decline of the economy in
growth results that cause long-term structural 2020, but are insufficient to raise confidence in 2020 but also deliver sufficient stimulus to 2020 and return the economy to pre-crisis
damage to the economy and restart growth raise confidence and drive growth in 2021 levels after the virus is quickly contained in Q2
Long-term capacity of the economy to deliver Insufficient government stimulus in the face of Fiscal and monetary authorities take Fiscal and monetary authorities mitigate
output is reduced as recurrent regional lockdowns result in measures to boost effectiveness and speed of economic damage with only some delays in
Ÿ Widespread business closures lead to a Ÿ Significant business closures and lack of policy impact transmission
reduction in the physical capital stock confidence lead businesses to pull back Ÿ Fewer bankruptcies and layoffs support Ÿ Fewer bankruptcies and layoffs support
Ÿ Employment levels and participation rates on investment and fragmentation of supply stronger business investment and release stronger business investment and release
drop as individuals drop out of the labor chains pent-up demand driving more spending pent-up demand driving more spending
force Ÿ Widespread job losses and continued Ÿ Increase in business and consumer Ÿ Business and consumer confidence is
Ÿ Productivity growth to near-zero as weakness in consumer spending as as confidence is boosted by more effective quickly restored by effective public health
investment in innovation and human and household focus on necessities public health responses that successfully responses
physical capital stagnates Ÿ Steep drop in tourism, and other service contain the regional virus occurrences and
related industries persist fewer periodic restrictions

McKinsey & Company 49

 Current as of May 20, 2020

Scenario A1: virus recurrence,

with muted recovery
Large economies
China1
United States
Real GDP, indexed Real GDP Drop 2020 GDP Return to Pre-
Eurozone 2019Q4-2020Q2 Growth Crisis Level
Local Currency Units, 2019 Q4=100
World % Change % Change Quarter (+/- 1Q)
110

105 China -5.7% -4.4% 2021 Q4

100
United -11.2% -8.1% 2023 Q1
States
95

90
Eurozone -14.6% -11.1% 2023 Q3

85 World -8.4% -6.5% 2022 Q3

80
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

2019 2020 2021

1. Seasonally adjusted by Oxford Economics

Source: McKinsey analysis, in partnership with Oxford Economics McKinsey & Company 50
 Current as of May 20, 2020

Scenario A2: virus recurrence,

with strong world rebound
Large economies
China1
United States
Real GDP, indexed Real GDP Drop 2020 GDP Return to Pre-
Eurozone 2019Q4-2020Q2 Growth Crisis Level
Local Currency Units, 2019 Q4=100
World % Change % Change Quarter (+/- 1Q)
110

105 China -3.0% -0.4% 2020 Q4

100
United -11.2% -7.9% 2021 Q4
States
95

90
Eurozone -14.5% -10.8% 2022 Q1

85 World -7.9% -5.6% 2021 Q4

80
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

2019 2020 2021

1. Seasonally adjusted by Oxford Economics

Source: McKinsey analysis, in partnership with Oxford Economics McKinsey & Company 51
 Current as of May 20, 2020

Scenario A3: virus contained,

growth returns
Large economies
China1
United States
Real GDP, indexed Real GDP Drop 2020 GDP Return to Pre-
Eurozone 2019Q4-2020Q2 Growth Crisis Level
Local Currency Units, 2019 Q4=100
World % Change % Change Quarter (+/- 1Q)
110

105 China -4.9% -2.0% 2020 Q4

100
United -8.1% -2.5% 2020 Q4
States
95

90
Eurozone -11.0% -5.2% 2021 Q1

85 World -6.5% -2.7% 2021 Q1

80
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

2019 2020 2021

1. Seasonally adjusted by Oxford Economics

Source: McKinsey analysis, in partnership with Oxford Economics McKinsey & Company 52
 Current as of May 20, 2020

Scenario B2: virus recurrence,

with slow long-term growth
Large economies
China1
United States
Real GDP, indexed Real GDP Drop 2020 GDP Return to Pre-
Eurozone 2019Q4-2020Q2 Growth Crisis Level
Local Currency Units, 2019 Q4=100
World % Change % Change Quarter (+/- 1Q)
110

105 China -6.4% -5.4% 2022 Q2

100
United -13.5% -10.4% 2025+
States
95

90
Eurozone -16.7% -13.3% 2025+

85 World -9.8% -8.0% 2023 Q3

80
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

2019 2020 2021

1. Seasonally adjusted by Oxford Economics

Source: McKinsey analysis, in partnership with Oxford Economics McKinsey & Company 53
 The Four Forces that are shaping
the Next Normal

Macro-economic
scenarios Metamorphosis An altered
of demand workforce

Regulatory Understanding
Return as a uncertainty of the virus
muscle

McKinsey & Company 54

Return is a muscle, not a plan
How can we rewire the organization for speed and embed in our long-term DNA?

Strengthen the “fast-twitch” Increase pace & quality Learn from the environment
muscle you have been using of skill building and bound-uncertainty faster
for the past 60 days at scale than ever before

Faster decision making “out of necessity” Process-based capabilities: can we Develop an enterprise-wide ability to absorb
involving only critical decision makers execute well? uncertainty and incorporate learnings into the
operating model quickly
Basing decisions on minimum and essential Relationship-based capabilities: do we know
information our counter parties well? Modify plans and base decisions on updated
projections —supported by continually
Leaders’ time freed up from non-priority activities Knowledge-based capabilities: do we have refreshed microdata about what’s happening
unique insights?
Ubiquitous license to act at all levels

Stepping up individual performance

McKinsey & Company 55

What organizations need now
Pyramidical orgs were never built to handle the situation they face today

What typical pyramidical

organizations are good at vs. What orgs need now Nerve Centers
can help
Topic expertise and pattern recognition Generalized problem solving across
(“do a few things, but do them well”) a wide array of topics traditional
Fact-based decision-making. Leaders that Hypothesis-based decision-making
organizations
can drive action based on well-tested sets of (“By the time the facts are available, manage the
facts promoted it is too late to respond”)
Return
Commitment to a path forward based on Speed of action at a higher premium
consensus from a large swathe of leaders over consensus about the action

Self-selecting organization based on a Multiple world views that provide

specific world-view constructive, purposeful conflict

Source: Prof. Leonard Dutch; Harvard Business School; Kennedy School of Government McKinsey & Company 56
From war War rooms… Nerve Centers…
rooms to Act on the basis of historical data and facts Act on the basis of senior judgement, and an

Nerve Centers informed hypothesis about the future

Focus on solving problems that have cropped up Focus on solving problems that have no
before (sometimes even in the same company) precedent within the company, sector or broadly

Rely on the use of a clear, rigid process Need rigid processes and experts, but also
facilitated by experts to address the problem creative, first-principles problem solving to
address the issue

Have a clearly defined goal that is well Have goals that are tough to define clearly (e.g.,
understood (e.g., improve profitability by X%) “help the company emerge from the crisis”)

Achieve measurable impact that is usually Achieve impact that can be hard to measure, and
publicized broadly is usually confined to close observers

Achieve measurable impact Achieve impact that can be hard to measure,

but is widely acknowledged by those participating

McKinsey & Company 57

 John Boyd’s
Observe Orient
OODA loop

Nerve Center design

is based on military
command principles
Core concept: Create an organization Decide
that can Observe, Orient, Decide and
Act faster than the environment
John Boyd was a Colonel in the U.S. Air Force,
whose ideas on the art of war revolutionized U.S.
military thinking, especially after the Vietnam War

Boyd's key concept: The OODA loop.

Act
The key to victory is to be able to make appropriate
decisions faster than the rate at which the OODA loop of the effective organization
environment evolves OODA loop of the environment

Source: Osinga, Frans PB. Science, strategy and war: The strategic theory of McKinsey & Company 58
John Boyd. Routledge, 2007.
Increasing the pace and quality of skill building
at scale (1/2)
Define the reskilling strategy – identify critical employee groups, no-regrets critical skills
and tailored learning journeys
Focus investments on four kinds of critical,
Rapidly identify the For example, when moving from in- no-regret skills
skills your recovery store sales to predominately home
business model deliveries, the tech team and logistics
coordinators will play a critical role in
depends on the new strategy
Digital Higher cognitive
Expand the ability to Develop cognitive skills to
Build critical employee Build a tool kit that will be useful no operate in a fully digital ensure that critical players can
skills including a no- matter how an employee’s specific
environment respond to the need for
role may evolve. Focus investments
regrets skill set redesign and innovation
on four kinds of skills: digital, higher
cognitive, social and emotional, and
adaptability and resilience

Launch tailored For example, when its regular face-to- Social/emotional Adaptability/resilience
learning journeys to face sales model faced disruption, an Strengthen social and Build adaptability and
close critical skill gaps international bank began a tailored emotional skills to resilience skills to thrive during
upskilling for its sales reps to develop ensure effective an evolving business situation
the skills for virtual selling collaboration

Source: “To emerge stronger from the COVID-19 crisis, companies should start reskilling their workforces now”, [Link] McKinsey & Company 59
Increasing the pace and quality of skill building
at scale (2/2)
Enable business to reskill by learning from rapid iterations, adopting the principles of smaller companies and
protecting learning budgets

Start now, test rapidly, Build institutional learning by

and iterate capturing what works now and what
doesn’t. Apply these lessons to future Organizations that had already tried reskilling felt
disruptions more prepared to take on future skill gaps than
those that hadn’t.
Assessment of previous reskilling, % of
Act like a small Emulate smaller companies that are companies that said there were unprepared
company to have more agile, find it easier to change
to address the potential role of disruptions
a big impact and are often more willing to take
due to market and/or technology trends
risks. They have a clear view of their 47
deficiencies to help prioritize reskilling
30
Protect learning Invest in skill building to adapt to the 21
budgets next normal. Cutting learning budgets
only delays the investment in learning 9
to a later day. E.g., a drop in training
expenditures in 2009 and 2010 was
followed by a surge in 20111 Successful Neutral Unsuccessful Waiting to
start reskilling
1. According to the Training Industry Report, US data during and after the Great Recession

Source: “To emerge stronger from the COVID-19 crisis, companies should start reskilling their workforces now”, [Link] McKinsey & Company 60
 Sector-specific power curves show dramatic differences in
performance during the recession

Mean TRS for automotive sector, 2007–11

Resilience: 30
Speed + 25 The top 20% of companies that
emerged from the recession
discipline is 20
15
are called the Resilients
key 10 These Resilients didn’t have
5 any particular starting
“The Resilients” 0
advantage (e.g., existing
Teams seeking to boost portfolio). Instead, they
-5 managed to achieve a small
resilience during COVID-19
-10 lead, which they then extended
need to learn lessons from the
companies that survived and -15 over the next 10 years.
thrived in the last recession -20 Two words that define their
-25 success: Speed + discipline.
-30

Non-Resilients Resilients

Source: “Bubbles pop, downturns stop”, [Link], 2019 McKinsey & Company 61
Speed + discipline—how the
Resilients stood apart

How Resilients performed

EBITDA Resilients companies sustained1 relative to Non-Resilients:
and revenues organic revenue growth early
and throughout the recession
outperformance
and on revenue in recovery 30%
Speed

Increase in revenue

Early and hard Resilients moved faster, harder

moves on productivity; preserved
growth capacity
3x
Reduction in operating costs; they
also moved 12–24 months earlier

M&A activities Resilients divested more during

1.5x
outperformance the downturn and acquired more
Discipline

in the recovery

Divestiture in the downturn

De-leveraging Resilients cleaned-up their

outperformance balance sheets ahead of the
downturn ~5% pts.
Deleveraged before trough
1 Resilients only lost 1% of organic revenue vs. 2007 level during 2009

Source: “Bubbles pop, downturns stop”, [Link], 2019 McKinsey & Company 62
Develop ability to absorb uncertainty & incorporate
learnings fast

Fast moving
epidemiological
& shelter-at-
home provisions
Stress-test Leading indicator
Evolving
Issue maps across scenarios dashboard
changes in
w/ evolution
economic
outlook Cross-team plan Portfolio of
assumptions strategic actions
Shifts in
customer
preferences &

3
consumption Stress-test the
patterns
1 Capture the full scope
of the uncertainty 2 Bound the
uncertainty
portfolio across
multiple scenarios &
4 Build basis for rapid
yet thoughtful
through issue maps that through tangible actions by building a
ensure delivery teams leading indicator
emphasize future scenarios that
have appropriate dashboard & portfolio
evolution, not just facts include 2nd order
planning assumptions of strategic actions
about the past effects
McKinsey & Company 63
 Continuously monitor microdata and iteratively take
actions to inform future-state hypothesis, and consequently,
current strategy
A leading indicator dashboard and rapidly, iteratively taking actions allows companies to navigate uncertainty

Current strategy driven by Rapid actions &

Real-time, curated ongoing hypothesis about learnings from
micro-data future evolution successes & failures

Sample Monitor local public health Tailor marketing approach, workforce Update consumer messaging,
journey conditions, consumer behavior, and salesforce timeline to return change policies / strategies to
government interventions to onsite, and project spikes in target consumers effectively -
understand the evolving local consumer demand (e.g., if and track success of actions to
circumstances in regions of consumers returning to workplace, improve future hypothesis
interest / relevance they will return to retail stores)

McKinsey & Company 64

How to get started: Focus on few key capabilities
Gather the information and initial assessments needed to guide companies through the return journey

Strengthen the Increase pace & quality Learn from the environment
“fast-twitch” muscle of skill building and bound-uncertainty

Asses remote work Monitor leading

Set up a nerve center readiness indicators Build a return plan

Establish a sustainable nerve Evaluate the net benefit of Monitor industry and regional Leverage monitoring
center with both strategical remote work to your recovery signals to assess dashboards, industry best
planning oriented and tactical organization and the readiness the timing of return practices and outside-in risk
implementation oriented teams of your workforce to go remote assessments to build an
initial return plan

McKinsey & Company 65

Separating responsibilities through a new Nerve Center structure
helps develop and sustain the 3 return muscle capabilities
Dedicated muscle teams within BUs interact with broader Plan Ahead, WF Readiness, and COVID-19 teams

Expert Advisory Panel

Ÿ Public health
Ÿ Economic/business projections Executive Committee
Ÿ Region specific health advisory
Ÿ New capability building

COVID-19 Workforce Business units &

Operations Readiness Plan Ahead Team Functions
Ÿ Create safe workforce Ÿ Plan supply-demand Ÿ Absorb uncertainty
Return plans (journey of matching Ÿ Determine / sharpen future-
safety interventions) requirements state hypothesis BU1 BU2 BU3
Ÿ Lead org-wide Ÿ Determine necessary Ÿ Create portfolio of strategic
perspective on public skill-building and actions (leveraging insights)
health situation develop process BU-specific strategic actions,
Ÿ Monitor leading indicators
Ÿ Develop training to scale including:
(and additional tech
modules Ÿ Lead changes in resources / platform) Ÿ Digital sales
Ÿ Lead workforce workforce models Ÿ Contactless operations
communications (e.g., remote work)

BU Dedicated delivery teams within BUs (fast-twitch)

McKinsey & Company 66
This org structure enables a continuous-feedback operating model
between fast-twitch and slow-twitch teams
Iterative feedback between the Plan Ahead and execution teams helps absorb the uncertainty of the crisis

1
Information passed
between teams

Business 1 Actions taken and

Unit /Function their results
Refines future-state
hypothesis based on delivery
teams Take in strategic 2 Real-time external
external and internal Tech
Plan Ahead priorities and rapidly indicator monitoring
listening and resources
Team 2 iteratively make
develops perspective
and platform customer & product 3 Strategic shift and
on current-state
decisions (fail fast), current strategy
strategy
reskill workforce, and
test other hypotheses 4 Strategic workforce
COVID-19 priorities (reskilling)
to manage uncertainty
Operations
3
Workforce
Readiness 4 How teams
use the
information
From the future-state hypothesis, determine what
workforce readiness investments are needed now
to help equip the org for long-term success

Ops/tactical teams Strategic teams Enabler teams McKinsey & Company 67

The 8-to-12-month journey to developing the Return muscle
follows a three-phase journey
Phase 3: Use outcomes to learn
and set future direction (4-6 mo.)
Phase 2: Scale capabilities at all
Phase 1: Focus on developing levels (2-3 mo.)
muscle (2-3 mo.) Strengthen ability to rapidly make
decisions emerging from the crisis
Extend autonomy from nerve center to Continuously adapt leading indicators
Create dedicated COVID-ops team for business unit leads to new data to tap into emerging realities
rapid execution Dedicate Return-specific “muscle” Extend ‘fast twitch’ capabilities to all
Strengthen Establish ‘decision-making’ process teams within BUs teams beyond “muscle” teams
‘fast twitch’ involving only key stakeholders Continue stress testing / improving
muscle Create safe workforce return plan return plan with new information

Accelerate/ Identify few key capabilities to get right Create feedback loops with BUs / PA Institute processes for continuous
(e.g., remote work, digital sales) team to identify emerging skill gaps capability building
scale skill-
and create relevant trainings Identify policies to incentivize skill
building Determine workforce segments and
supply / demand relationship Reduce time to develop new skills building in areas relevant for future

Learn from Create leading indicator and internal Continuously adapt 1-2 month future- Establish org-wide processes to enable
intervention monitoring capabilities state hypothesis based on real-time ability to handle uncertainty
environment
feedback from actions & monitoring Improve hypotheses and take actions
and bound Leverage experts to stay ahead of local
health guidelines, regulation, etc dashboards based on past prediction results
uncertainty Build tech platform to support muscle

McKinsey & Company 68

 The Four Forces that are shaping
the Next Normal

Macro-economic
scenarios Metamorphosis An altered
of demand workforce

Regulatory Understanding
Return as a uncertainty of the virus
muscle

McKinsey & Company 69

 Current as of May 6, 2020

Adoption of digital sales channels is ‘on the rise’

Consumers are accelerating adoption of digital channels1 …and so are B2B decision makers2
Most first-time customers (~86%) are satisfied/ very satisfied with digital B2B decision makers believe digital sales interactions will be
adoption and majority (~75%) plan to continue using digital post-COVID ~2X more important than traditional interactions in the next
% of respondents few weeks (vs equally important pre-COVID)
% of respondents
73% 66

61%
51% ~2X
51% 45%
30%
37% 34
33%
31%
31%
31%
17% 21%
13%
6%
Average (All Banking Grocery Apparel Travel Traditional sales interactions Digital-enabled sales interactions
industries)

Regular users First time users

Source:
1 - Q: Which of the following industries have you used/visited digitally (mobile app/ website) over the past 6 months? Which of this services have you started to use digitally during COVID-19?
McKinsey & Company COVID-19 Digital sentiment insights: survey results for the U.S. market; April 25-28, 2020 McKinsey & Company 70
2 - McKinsey B2B Decision Maker Pulse Survey, April 2020 (N=3,619 for Global. Respondents from France, Spain, Italy, UK, Germany, South Korea, Japan, China, India, US, and Brazil)
Rapidly iterating on redesigning the end-to-end Current as of May 6, 2020

customer journey will be critical

Travel example: designing a ‘contactless’ experience

Understand the risks across key journeys to fuel the design of relevant solutions Vision development, ideation,
that can best address and mitigate those risks. Rapid development of solutions by a prototyping
cross-functional team enables the team to create a “table-top” future experience to
Increase the level of fidelity to
rapidly test and validate with users and stakeholders. prototype a winning subset of
ideas
Ideas solving for risks
identified in the E2E
traveler journey Testing with customers and
stakeholders & refinement
(Illustrative)

A B C D E F G H I J K L M N Validate and refine concepts

with relevant user groups
Touch free E2E journey Fully digital hotels Medical services linked to hotel Safe-o-meter to plan options Visible security tray sanitization Staff resilience training

Prioritization
Balance investments over time
Safer train/bus interior zoning Safer luggage storage on trains Seclusion pods in airport UV cleaning robot for transport Air vents in transport headrest Health check-up prior to trip
to accelerate re-start and
recovery

McKinsey & Company 71

 The Four Forces that are shaping
the Next Normal

Macro-economic
scenarios Metamorphosis An altered
of demand workforce

Regulatory Understanding
Return as a uncertainty of the virus
muscle

McKinsey & Company 72

Remote working can generate substantial
value for organizations…
Example Impact

Lever Definition
Is the typical TRS outperformance
Increasing
Equipping organizations to react more flexibly and
efficiently to events that are beyond their influence by
150% resilient organizations (companies with
the ability to adapt faster during and
resilience decoupling location and business outcomes after a crisis) achieve post-crisis
compared to less resilient peers1

Improving talent Increasing the size of the addressable talent pool as of employees report that the ability
(especially high potential) individuals are less willing to
access
move for work 70% telecommute plays a role in the
choice for their next job2

Improving employee efficiency

performance improvement of
Increasing
operational Improving efficiency through required redesign of work
(e.g., automation, new tools, improved process times,
13% remote workers was shown in a
Stanford study on the Chinese
efficiency travel agency Ctrip3
reduced paper flow and # reports)
15-20% efficiency improvements can be
realized by GCCs through remote
Improving cost Reducing demand for expensive real estate space and
work (incl. full program cost) 4
position business travel
average reduction of unscheduled
Driving employee
satisfaction
Offering employees flexibility to reduce attrition and
unscheduled absences
63% absences for organizations that
implemented a telework program5

1. [Link]
2. [Link] 4. McKinsey survey across 46 GCCs and 248,000 employees)
3. [Link] 5. American Management Association

McKinsey & Company 73

.. Although it is unlikely to be a panacea – certain
tasks will still benefit from in-person connection

Description Examples
An experiment done by researchers
Negotiations rely on deep mutual trust and require interpretation of non-verbal at the University of Chicago and
Negotiations communication to react sensitively to the counterpart to achieve the best mutually Harvard found that negotiators who
beneficial outcome shook hands were more open and
honest, and reached better
Relationship building (e.g., boards, potential customers, interviews, team kick-offs) done outcomes1
Relationship
in person enable a faster and more trust based connection, as physical human
building 8 out of 10 executives surveyed
interaction (e.g., shaking hands) plays a major subconscious role in that
preferred face to face meetings, with
three main reasons:2
Onboarding Training new hires with no previous experience in respective role presents a significant Ÿ Build stronger, more meaningful
and job challenge in a remote setting as regular feedback and interaction with a business relationships (85%)
training trainer/supervisor is beneficial to optimize learning and train new behaviors
Ÿ Ability to read body language and
facial expressions (77%)
Critical Decision meetings in boards are often based on a deep mutual knowledge of board
Ÿ More social interaction, ability to
decision members, where implicit signals have elevated importance (e.g., reading body language
bond with co-workers/clients
meetings of people in the room): thus it is harder to make consensual decisions remotely
Gitlab the world’s largest only remote
Critical conversations require a sensitive reaction on emotional and unconscious company does not hire junior roles
Critical expressions of one’s counterpart (e.g., body language, facial expressions), which is and so far only has a pilot for interns3
conversations hindered in a remote setting
According to research the degree of
Furthermore a remote conversation might be perceived as less appreciative liking conveyed by facial expressions
[Link], Juliana and Risen, Jane and Gino, Francesca and Norton, Michael I., Handshaking Promotes Cooperative Dealmaking (May 29, 2014). will dominate and determine the
[Link] Insights: The case for Face-to-face impact of the total message4 which
[Link]
[Link] messages Paperback – 1971 by Albert Mehrabia might deteriorate in video calls5
5.[Link] - Why zoom is terrible

McKinsey & Company 74

The shift to hybrid-virtual model requires considering the needs of
employee segments, teams and organization as a whole

What are the virtual work archetypes What do businesses What do businesses solve for
at an employee segment level? solve for at a team level? at organization level?

Virtual work archetypes Description The need for teams to sustain and Ability to attract and retain top talent
improve productivity
Fully virtual +90% of work is in the virtual Ability to flexibly dial talent supply up and
workplace
down by greater reliance on virtual
The need for teams to frequently contractors
Hybrid - Regularized On-site work occurs at regular
interval s largely at individual re-organize as opportunities arise
discretion and dissipate
Improved
location
Hybrid – On-demand Split on-site versus virtual
fluctuates depending on work strategy and
demands Ability to tap into greater skill cost
pools to assemble winning teams optimization
Onsite Primary Majority of work occurs on-
site while some activities are Ability to close
done virtually
the gaps in
critical skill
Onsite Critical 100% of work activities must
be completed on site pools

McKinsey & Company 75

There are a number of core principles that can enable a successful
virtual transition

Develop hybrid-virtual Ensure leaders are equipped to lead in a world where inspirational leadership is more effective to build trust that hierarchical
leadership
leaders
Define new leadership “observable behaviors” to ensure leaders are spending their time on appropriate activities (e.g., creating informal
interactions with employees)

Be deliberate about your Create a culture where remote working employees do not feel like second class employees (e.g., fear for disadvantages in career
development due to remote work)
culture
Leaders should role model by working remotely for a significant share of their time
Acknowledge the benefits of F2F communication and create periodic in person interactions (1 - 2 times/ yr min)

Ensure productivity of Ensure virtual employees can stay on the pulse by establishing clear guidelines and working norms for documentation and creating
transparency for all meetings and decisions, that also apply for co-located employees (e.g., be on own laptop in VC even in meeting that is
onsite and virtual partly in person)
employees Overcompensate with managerial attention for virtual employees to remove in-person bias
Increase efforts in performance management, clearly define outcomes, regularly document KPIs, and evaluate employees purely on
transparent outcomes / metrics in order to remove in-person bias

Actively manage Actively engage with employees on organizational health

engagement and org Continuously monitor organizational health and take action if required
effectiveness Be intentional about everything, especially interpersonal connections (or they may not occur)
Conduct social networking analysis to understand social cohesion and intervene as appropriate

Foster a sense of purpose Emphasize and communicate purpose for each and every employee through clear communication strategy and channels
for employees

McKinsey & Company 76

 The Four Forces that are shaping
the Next Normal

Macro-economic
scenarios Metamorphosis An altered
of demand workforce

Regulatory Understanding
Return as a uncertainty of the virus
muscle

McKinsey & Company 77

Nerve center teams should be modular and reorient their focus
around “Return to work” priorities

Central nerve center Emerging squads for ‘Return’

Workforce Expert << Strategic Tactical >>
Advisory advisory
Council panel

Issue map Monitoring

Training/
Customer Workforce Return decision Return
complianc
support planning Scenario leadership timing
Industry Leading e Execution
planning
dynamics indicator squad
Decide squad
Team Central nerve
Industry center
Customer Interventio
dynamics Return Corporate journey n planning
strategy
Org decision makers
CEO

Corporate Remote
Leading strategy
strategy
indicator

Workforce strategy squad

Workforce
Nerve Center segmentati
[Across 5Rs] on

Return focused nerve center squads build on existing priorities of the core nerve center to focus on strategic return priorities
1. Focus on short term strategic priorities, long-term workforce strategy to be prioritized (in collaboration with core nerve center) as return ramps up McKinsey & Company 78
Success of a return plan can benefit from adequate data and
scenario-based response readiness (1/2)
Outputs of a Return Plan What does good look like?

Immediate q Immediate post-return business strategy map (e.g., stop a business • Short term ‘business priorities’ are in alignment with capital position, ecosystem
business strategy1 model, focus on a product/ customer segment, re-orient mfg. focus) readiness (suppliers), and focused on customer retention
q Business priority list for execution (e.g., restart mfg., prioritize resilient • Strategic highlights focus on ‘continuous iteration – strong willingness for
business partners) reversal as required
q Digital-first scenarios/ roadmap for short-term pivots • Includes focus on resiliency in business partners

Return strategy & q Leading-indicator monitoring dashboard • Return strategy is grounded in macro-economic scenarios
phase-wise q End-to-end return strategy, timeline and checklist2 including phases of • Leading indicators are customized to adequately reflect local conditions
roadmap return and organizational focus by phase specific to your industry sector, geographical presence
q List of clear triggers for return phases and communication plans • Return phases in accordance with regional guidelines and regulations
q Weekly cadence to monitor return phases/ issues and re-focus • Participation in industry associations and collaborative groups

Workforce q Current workforce segmentation based on remote vs in-person and • Priority considerations around digital and remote-first return
segmentation risk levels of infection
• Mindful return without ‘follow-the-crowd’ mentality
q Operating model by workforce segments for each return phase
• Workforce transitions through cycle of return, reimagine and reform supported
q Plan for larger remote enablement by cost-benefit analyses

Workforce training q Implementation plan including workforce trainings on norms, • Pre-emptive, consistent and transparent communication on upcoming phases
and engagement interventions, two-way communication modes, health response and ‘what to expect’ for all employees
manuals

Health & safety q End-to-end Intervention plans with detailed illustrative posters, videos, • Consideration of end-to-end employee journey in different environments
interventions manuals, safety protocols to enable safety measures for workforce (e.g., office, manufacturing, retail)
return
• Interventions stress-tested against growing repository of known failures
q Goals and milestones to monitor each intervention
• Interventions address physical safety as well as mental health

1. Core nerve center builds out long term business strategy scenarios; near-term strategy in 'Return' feeds into the long term strategy
2. Detailed return checklist in page 9
McKinsey & Company 79
Success of a return plan can benefit from adequate data and
scenario-based response readiness (2/2)
Outputs of a Return Plan What does good look like?

Intervention q Monitoring dashboards for intervention performance through • Adequate two-way communication modes for feedback loop with
monitoring measures such as safety levels, infections (if any), barrier gaps, employees/ customers/ suppliers
workforce sentiments, productivity
• Ability to be agile in responding to barrier leaks in interventions
q Cadence with the Return planning and ops teams

Return policy q Guiding policies on workforce priorities • Policies in line with emerging local and national guidelines
(e.g., for vulnerable populations/ high risk regions)
• Policies prioritize workforce safety while protecting against potential
q Policies to oversee specific scenarios liabilities
(e.g., on-site infection at point of entry)

Return operating q Operating model of return squads including roles, governance, • Operating model ensures agile ways of working with flexibility to pivot quickly
model decision flows and cadence of delivery
• Roles and responsibilities clearly articulate dependencies and focus on
q Cadence of checkpoints with core nerve center decisioning speed

Risk management q Risk readiness scenarios with a focus on legal, compliance and HR • Holistic approach to risk management considering brand, legal, compliance
risks risks
q Manuals for risk reviews of interventions and workforce processes • Liability protection readiness for preventative and mitigative scenarios

McKinsey & Company 80

 Potential phased approach for organization’s return to work

Phase: Preparation for return Phase: Initial return stages Phase: Full scale return

Define near-term roadmap for sustainable workplace operations

Evaluate options
Execute phase-wise return to drive to post-COVID strategic objectives
Decide plans and moves:
Adapt • Understand likely shifts in • Build and iterate on financial scenarios and Initial transition
stakeholder priorities/ behaviors issue maps to guide rapid decision making
Ensuring sustainability
and resulting business impact
• Evaluate and invest in move to ‘digital-first’, • Reiterate on financial and business
• Leverage macroeconomic as customers reorient their buying preferences scenarios based on initial feedback
scenarios for development of
• Pre-empt customer and business partner • Transition to Reimagine Plan Ahead team
financial models and business risks
safety and resilience needs
Accelerate • Segment the workforce and build • Prioritize initiatives with immediate • Begin workforce return for critical onsite • Drive readiness for possible outbreak
timetable for return onsite for each relevance and key enablers employees resurgence
segment
• Consider remote enablement and workforce • Implement agile principles to rapidly • Revisit workforce segments converted to fully
• Re-assess legacy initiatives (e.g., retraining for groups not immediately returning develop and test new ways of working virtual operations to assess additional
scaling workforce up or down) and opportunities for remote working
• Reallocate and retrain resources for high-
net new aspirations
priority divisions opening first
Craft • Develop and implement workplace safety • Identify and empower change champions
• Establish/ reassess the role, structure and interventions based on industry best to help sustain organizational culture
mindset of a nerve center practices and local govt. guidelines
• Monitor effectiveness of interventions (e.g.,
• Map employee end to end journey to use as • Build in time for training on changing work adherence, transmission) and continuously
a framework to plan interventions practices, norms update and redeploy initiatives to improve
• Engage in two-way communication around employee outcomes
• Implement structures, such as checklists
expectations for return to work and templates to support management
Time • Define trigger points and leading • Identify red-flags and levers that can be • Continuously align practices based on
indicators for workforce return and pulled to mitigate problems updated data from relevant health agencies
setup monitoring dashboards • Continue monitoring indicators for
McKinsey & Company 81
transitioning from high to low restriction
 The Four Forces that are shaping
the Next Normal

Macro-economic
scenarios Metamorphosis An altered
of demand workforce

Regulatory Understanding
Return as a uncertainty of the virus
muscle

McKinsey & Company 82

Sample transmission case: Outbreak at a
Environment: Neighborhood tables at
restaurant in China during lunch a 5-floor restaurant without windows

Outbreak scale1 Index case Location: Guangzhou, China

# of customers at restaurant: 83 (across 5 floors) First patient A1 had been to Wuhan but was
asymptomatic at the time of the lunch. No other source Timeline: Jan 26 -Feb 10, 2020
# of infections: 10 (A, B, C families)
of exposure was detected for other families

Transmission event

Arrangement of Potential considerations for return

restaurant tables
2 1
Air conditioning Ÿ Rethink air-conditioning inlet /
airflow direction outlet to minimize droplet
indicates index case- transmission (e.g., ventilation
patient perpendicular to workstations)
indicates seating of
future case-patients; Ÿ Increase distance between tables/
work stations (> ~2 m)
Ÿ Separate tables using plexiglass and
disinfect them frequently

Authors conclusions Ÿ Screen customers/visitors/ workers

1 Strong airflow from for temperature at points of entry
air-conditioning
assisted droplet
transmission >1m
2 Pre-symptomatic
patient A1 was not
screened for temp.

1. As per the sourced study/report

Source: Early release research - Lu J, Gu J, Li K, Xu C, Su W, Lai Z, et al. COVID-19 outbreak associated with air conditioning in restaurant,
Guangzhou, China, 2020. Emerg Infect Dis. 2020 Jul [May 6, 2020]. [Link]
McKinsey & Company 83
Disclaimer: Early release articles are not considered as final versions. Any changes will be reflected in the online version in the month the article is officially released.
Example: A customer journey view across the CDC pyramid
An end to end customer journey, with interventions tied to the CDC pyramid, allows for upgrades over time

Travel to Common Post-

Pre-entry work At work spaces infection
Policy and Manufacturing Public, employer- Meeting rooms Isolation
education environment sponsored and
individual transport Break rooms Tracing & isolation
Workforce Office environment
communication Entrance controls Hallways Facility response
Retail environment
Restrooms Insurance
Hierarchy of hazard controls1 Field environment
Other Liability

Elimination

Substitution

Test & isolate

Upgrade equipment
Engineering controls
Clean & disinfect

Separate in space & time

Drive safe behavior norms

Administra-
tive Increase awareness
controls
Insure & respond

PPE Use protective equipment

Least effective Most effective

1. [Link] | [Link] McKinsey & Company 84
Companies are increasingly mapping new interventions across the
workforce journey – Sample Manufacturing journey
Travel to work and pre-entry At Work Common space use

Modularized
spaces, with
limited interaction
across spaces

Masks and other

appropriate PPE
required
at all times

High-frequency
Use of masks required during employee commutes Separated lunch seating with dividers on dining tables
cleaning of high-
touch surfaces
and spaces

Improved air
filtration/
ventilation

Clear posters
on safety
guidance and
sickness
Temperature checks protocols Use of non-reusable dishes at cafeterias
Does not reflect McKinsey guidance customized to individual client needs - should be vetted against applicable legal and business requirements before application to a specific client McKinsey & Company 85
Source: Industry expert interviews, government/public health websites (including, but not limited to, sources available at [Link], [Link]), and press research (including, but
not limited to, sources available at NYT, WSJ, and specific Fortune 1000 or equivalently large international company websites)
Sample journey: Office environment
Travel to work and pre-entry At Work Common space use

Reorganized
seating
(6 feet apart)

Headcount limited
below fire code limit
(e.g. limiting number
of entries by shifts)
Masks required and provided for employees Separated lunch seating

Masks required at all

times (Except when
working individually
more than
6 feet apart)

Increased frequency
of cleaning of high-
touch surfaces
Increased frequency cleaning with visibly monitored
Limited entrance for non-employees
cleaning schedules
Does not reflect McKinsey guidance customized to individual client needs - should be vetted against applicable legal and business requirements before application to a specific client McKinsey & Company 86
Source: Industry expert interviews, government/public health websites (including, but not limited to, sources available at [Link], [Link]), and press research (including, but
not limited to, sources available at NYT, WSJ, and specific Fortune 1000 or equivalently large international company websites)
Sample journey: Retail environment
Travel to work and pre-entry At Work Common space use

Staggered entry and work shifts Guidance on no-questions-asked sick leave

Increased cleaning of high-touch surfaces

Upgraded PPE encouraged, required and/or provided Plexiglass shields installed at cash registers
and spaces (e.g., Bathrooms)

Does not reflect McKinsey guidance customized to individual client needs - should be vetted against applicable legal and business requirements before application to a specific client McKinsey & Company 87
Source: Industry expert interviews, government/public health websites (including, but not limited to, sources available at [Link], [Link]), and press research (including, but
not limited to, sources available at NYT, WSJ, and specific Fortune 1000 or equivalently large international company websites)
Sample journey: Field environment
Travel to work and pre-entry At Work Common space use

Discuss safety practices at tailboard meetings

Modularized
Allow use of personal vehicles to minimize contact spaces, with limited Minimize number of people in trailers
interaction across
spaces

Masks and other

appropriate PPE
required
at all times

Clear posters
on safety guidance
and sickness
protocols
Contactless temperature checks prior to entry Stagger and distance pick up of supplies at the yard
Does not reflect McKinsey guidance customized to individual client needs - should be vetted against applicable legal and business requirements before application to a specific client McKinsey & Company 88
Source: Industry expert interviews, government/public health websites (including, but not limited to, sources available at [Link], [Link]), and press research (including, but
not limited to, sources available at NYT, WSJ, and specific Fortune 1000 or equivalently large international company websites)
Improve air filtration / ventilation Pre-entry Travel to work At Work Common areas Post-infection

to remove aerial antigens Upgrade equipment

Office Manufacturing Retail

Description of potential
intervention
Improved air filtration
and ventilation systems Install high-efficiency air filters and
increase ventilation rates in the work
environment
Avoid using central air conditioning and
heating systems where possible

Where this has been done

Multinational automotive manufacturer
Ensure airflow in S. Korea heightened ventilation
does not aid requirements beyond government guidelines
transmission American multinational automotive
through droplets manufacturer
Global commercial real estate company

HEPA (high-efficiency
particulate air)-rated filter
Does not reflect McKinsey guidance customized to individual client needs - should be vetted against applicable legal and business requirements before
application to a specific client
Source: Industry expert interviews, government/public health websites (including, but not limited to, sources available at [Link], [Link]), and press McKinsey & Company 89
research (including, but not limited to, sources available at NYT, WSJ, and specific Fortune 1000 or equivalently large international company websites)
Identify high risk areas based on a Pre-entry Travel to work At Work Common areas Post-infection

walkthrough assessment Drive safe behavior norms

Office Manufacturing Retail Field

Description of potential
intervention
Have an employee, employee team or third-
party perform a walkthrough assessment to
identify high-risk, high-touch areas
Use this assessment to inform new safety
measures

Where this has been done

American multinational aerospace and defense
manufacturer
Global commercial real estate company

American multinational technology

conglomerate

Third party walk-through

Does not reflect McKinsey guidance customized to individual client needs - should be vetted against applicable legal and business requirements before
application to a specific client
Source: Industry expert interviews, government/public health websites (including, but not limited to, sources available at [Link], [Link]), and press McKinsey & Company 90
research (including, but not limited to, sources available at NYT, WSJ, and specific Fortune 1000 or equivalently large international company websites)
COVID-19 impacts on behavioral health
may change the role of employers

Financial crises can incite COVID-19 presents behavioral Employers can have a critical role to
behavioral health crises. health challenges. In a recent play in promoting resilience and
Following the 2007-2008 global survey of American adults mitigating the impact for their
financial crisis: employees
59% of respondents reported
Rates of depression, anxiety, and feeling depressed or anxious, or both In the Return phase, employers likely need
alcohol and drug use increased to attend to the behavioral health needs
1 out of 4 reported binge drinking of the workforce, including those
Worldwide, suicides attributable to and 1 out of 5 misused prescription returning to physical plants (e.g., fear of
unemployment increased 13%, drugs 4 contagion) as well as those working
leading to over 46,000 lives lost 1, 2, 3 remotely indefinitely (e.g., social isolation)

Employers can foster health and

resilience, through their benefits and
supports, communications, and culture
1. Classen TJ and Dunn RA. Health Economics, 2012. 2. Milner A, Page A, and LaMontagne AD. Psychological Medicine, 2014.
3. Nordt C et al. Lancet Psychiatry, 2015. 4. McKinsey COVID-19 Consumer Surveys, 3/17/2020, 3/29/2020, and 4/13/2020.

McKinsey & Company 91

Framework of employer behavioral health actions to consider

Strategic themes

Prioritize Communicate Make treatment Cultivate inclusive Measure and hold

behavioral health resources accessible culture accountable
Appoint a behavioral Develop a clear overview Examine BH policies and Educate the organization Use analytics to
health (BH) of behavioral health benefits to ensure that in behavioral health understand BH needs
ambassador/leader, to resources (e.g., EAP, they have capacity to meet literacy, ways to reduce (e.g., pulse surveys,
coordinate efforts and telehealth,) and current demand; consider stigma, and how to support people analytics, program
Tactical initiatives

demonstrate commitment disseminate widely adding enhanced supports colleagues utilization, culture surveys)
(e.g., internal websites, and tailor supports and
Commit funding to HR, team leaders) Ensure easy to access BH Institute formal and communications for key
behavioral health treatment resources, informal programming to segments (e.g., on-site vs.
initiatives, including Convey senior leadership (e.g., telehealth, provide social support and remote roles; teams
enhanced supports and commitment to BH, scheduling flexibility, on- promote wellbeing working directly on COVID-
targeted programming to acknowledgement of site care) accounting for (e.g., leadership check-ins, 19 response)
address COVID-19 needs distress, and support for employee needs and counseling webinars,
addressing behavioral physical distancing social connectivity) Hold the organization
health needs, including guidelines accountable and take
substance use action based upon
metrics

McKinsey & Company 92

 Current as of May 28, 2020

Identifying and sourcing critical protective supplies is likely a key

enabler to facilitating safe return to work
Detailed fact packs and supplier lists are available across a number of critical supply categories
Critical supply category Examples Usage observed in case studies
Respiratory protection
1 Widespread
(e.g., PAPR, N95, surgical mask)

Eye/Face protection Limited to select

2
(e.g., face shield, goggles) applications or cases

Body protection Limited to select

3
(e.g., isolation gowns, lab coats, coveralls) applications or cases

Hand protection Multiple applications

4
(e.g., gloves) observed

5 Sanitizers and disinfectants

Widespread
(e.g., alcohol-based hand rub)

Limited to select
6 Diagnostic tests
applications or cases

Limited to select
7 HVAC / Air purification
applications or cases

Thermal measurement Multiple applications

8 observed
Image source: 3M, Home Depot, Amazon, Grainger
McKinsey & Company 93
DOCUMENT INTENDED TO PROVIDE INSIGHT BASED ON CURRENTLY AVAILABLE INFORMATION FOR CONSIDERATION AND NOT SPECIFIC ADVICE