The new normal - The McKinsey Quarterly - The new normal - Strategy - Strategic Thinking

The new normal - The McKinsey Quarterly - The new normal - Strategy - Strategic Thinking

This is the return to normal capitalism, where productivity gains, technological innovations and creation of new markets have been the traditional sources of value creation.

The period where value creation was achieved by financial innovations and extremely high leverage (eg. 30-1 in some hedge funds) is over. The price of risk is going to be higher from now on.

Is this so difficult to understand and assume? I find this is back to normal. For management teams, it means refocusing on long term value creation through the creation and maintenance of unique capabilities. And defocusing from tyring to make up next quarter results.

Again, back to normal.