This year’s 7 most revealing rea ds | And what they say about 2024

“It’s hard to make predictions, especially about the future.” That line is attributed to everyone from Niels Bohr to Yogi Berra, and, no matter who said it, we agree. Nonetheless, we predict you’ll find these Best of Bain offerings from 2023 a great way to start looking ahead to 2024. They are among the most read and shared insights we produced this year, which makes them essential reading as you map your priorities and strategies for the upcoming year. Also, don’t miss the one on workplace happiness, it’s a great note to end on.

—The Bain Editorial Team

So much for rarity. Today there are 2,500 unicorns, or private companies with a market value of at least $1 billion. But our analysis did uncover a handful of true unicorns, those companies that also generate $1 billion in cash and revenue. We also explore what makes them fly, and what other companies can learn from their success.

This year, ChatGPT became the fastest growing consumer application ever. Behind the excitement is true opportunity: AI can be infused into virtually all areas of digitized life and work. That massive potential has triggered a massive response: The portion of investments that went to AI companies doubled in the first half of 2023 to 28%.

With apologies to our canine friends, you might say that if seven years in real life equates to one year in the software world, in AI it’s one month. The risks of inaction (and wrong action) are high.

When we asked more than 23,000 global consumers about sustainability, we found that they care a lot about it but are often fuzzy on the details. For example, when asked which of two products generates higher carbon emissions, they got it wrong 75% of the time. They also differ widely in how they define sustainability, worry about it at different rates, and prioritize different aspects (societal good versus scarcity of resources, for example). We explain why decoding consumers is key to sustaining your sustainability progress.

When it comes to applying AI to customer interactions, most companies are aware of the potential risks to data privacy or the frustrations that can result from completely automated communication. But a more subtle risk also looms: deploying models and bots that are engineered to extract maximum short-term value from a customer, rather than foster long-term loyalty. Can these AI algorithms can be made to prize love and loyalty? It’s already happening. One bank now provides customers an AI assistant that creates budgets, and it has reduced customer attrition by nearly 75%.

To help senior leaders understand where and how AI can plug into their operations, we’ve built an interactive microsite where you can explore real-world use cases across a range of B2C and B2B applications. You can also see the productivity boosts AI is already making possible across a range of industries and business functions.

Private equity has a critical role to play in the energy transition, if firms can figure out where to deploy that essential capital. Energy is, of course, a complex issue that spans sectors, and it’s often uncomfortably beholden to politics, not to mention regionalism, regulatory uncertainty, and other challenges.

The best approach, we find, is to avoid trying to pick the biggest winners in the most dynamic fields and instead invest selectively where you can add value. And if your risk appetite is low, buy out “pick and shovel” players.

Author, educator, and columnist Arthur Brooks (also a former CEO) has ideas about workplace happiness and productivity that nicely match our own, one being that happy people build profitable businesses. His work at the Leadership and Happiness Laboratory at Harvard’s Kennedy School finds that happiness is built on four pillars: faith, family, friends, and work. As an employer, you might think you can only affect the fourth, but in fact, you hold the key to them all, largely through helping employees find the time and space to form and maintain the relationships that give life meaning.

Another key to happiness? As Brooks says, “Spend more time with your ‘real’ friends, not just your ‘deal’ friends.”

Foundation models. Data management. Applications. Across the entire generative AI landscape, company formation and investment are blossoming. Or should we say ballooning? You’ll see what we mean.