Read April 2026 · 2736 words
General Motors’ chief executive Mary Barra told us, “Becoming a CEO is unexpectedly lonely. I’ve always had a regular dialogue with whoever my leader was, and all of a sudden, you don’t have a leader to go to.” – page 65
six key responsibilities emerged: setting the direction, aligning the organization, mobilizing through leaders, engaging the board, connecting with stakeholders, and managing personal effectiveness. – page 136
These are what enable great CEOs to, in the words of Eaton’s former CEO Sandy Cutler, “play big ball, not small ball. By that I mean spending time on things that no one else can in ways that magnify your effectiveness without getting mired in things that don’t make a difference.” – page 148
virtually every CEO told us that they thought they were well equipped for the job because of their experience in having led large business units or functions, only to find that to simply not be the case. – page 172
What took them aback was how the top job is the only role in an organization that is literally peerless. A CEO is accountable for everything. – page 174
“The CEO role is the intersection of all contradictions.” Interview after interview brought to light the kinds of contradictions Aschenbroich was referring to. Delivering short-term results versus investing in long-term performance. Taking time to gather facts and do analyses versus moving fast to capture opportunities. Respecting the past and creating continuity vs. disrupting the future. Maximizing value for shareholders versus delivering impact for other stakeholders. Having confidence to make tough calls versus having humility to ask for and receive feedback. You might say that F. Scott Fitzgerald’s observation that “the test of a first-rate intelligence is the ability to hold two opposed ideas in the mind at the same time, and still retain the ability to function” applies fully to the role of the CEO. – page 180
They embrace uncertainty with a view that fortune favors the bold. They’re less a “taker” of their fate and more a “shaper”—constantly looking for and acting on opportunities that bend the curve of history. – page 250
reframed what winning meant for their companies. They didn’t just raise aspiration levels; they changed the definition of success. – page 268
a game-changing vision for their organizations. They do so by… … finding and amplifying intersections … making it about more than money … not being afraid to look back to look forward … involving a broad group of leaders in the process – page 317
“at the intersection of four circles: what the world needs, what you are good at, what you are passionate about, and how you can make money.” – page 322
By the time Joly stepped down in June 2019, Best Buy’s shares had soared 330 percent from $20 to about $68 while the S&P 500 rose only 111 percent. Finding the right intersection indeed pays off. – page 345 bad metric
Under Sørensen’s tenure, Novo Nordisk revenue grew fivefold and net profit elevenfold, and today the company controls nearly half the insulin market globally. – page 354 control - revenue as goal of vision?
Looking back at the boldly framed visions in table 1, it’s striking that none of these successful companies focused on achieving financial outcomes—profits were an outcome of achieving their vision. Oliver Bäte, CEO of the world’s largest insurance company, Allianz, explains why: “Nobody gets galvanized by, ‘I need to double net profit.’ Sorry, even my top team doesn’t. So the question is, what can you rally people behind? It’s really different to tell people, ‘We want to be the loyalty leader in everything we do,’ than, ‘We want to double return to shareholders.’ ” – page 379
“employees want to jump out of bed in the morning to invent something new, produce a high-quality product, or help doctors in an operating room. This holds true whether we’re talking about South Korea, China, Poland, or Argentina. It motivates senior leaders, the woman on the production line, an engineer back at the lab, and the person who will drive through the night halfway across the state of Michigan to deliver a defibrillator so a doctor can start – page 393
procedure at seven o’clock the next morning. That’s a true story.” – page 397
the best CEOs often dig back into a company’s history to find out what originally made it successful and then take that central idea and expand it in ways that open up new opportunities. – page 399
Smith’s advice to new CEOs is to have “a vision that is so clear a leader doesn’t have to do anything but get out of the way. That’s the most inspiring vision of all.” – page 414
“As the leader, you have the power—and the responsibility—to raise the level of ambition in your organization.” – page 421
The best CEOs create a game-changing vision for their company. When it comes to sharing it with the organization, however, they rarely dictate their views. – page 423
“people support what they help create.” In fact, they’re some five times more supportive than those who aren’t involved. The underlying psychology relates to our desire for control, which is a deep-rooted survival instinct. – page 433
It was somewhat disconcerting to find that the best CEOs used the terms vision, mission, and company purpose as largely interchangeable. Communications and HR professionals, academics, and we as consultants can argue all we – page 471
about the nuances of each term, but the fact remains that the best CEOs don’t worry much about the distinctions—what matters for them is to have a clear and simply articulated North Star for the company that redefines success, influences decisions, and inspires people to act in desired ways. – page 473
the best CEOs boldly make big strategic moves early and often during their tenure. – page 494
Buy and Sell. The best CEOs execute at least one deal per year on average, and over a ten-year period these deals cumulatively amount to more than 30 percent of a company’s market cap (although typically no single deal amounts to more than 30 percent of the company’s value). This puts a premium on having a deep capability to identify, negotiate, and integrate acquisitions. The top CEOs are as bold about selling as they are about buying, which can also take the form of spinning off businesses. Aon is a poster child for making deals. In CEO Greg Case’s words, “We’re always shaping and improving our portfolio. Over the last fifteen years, we’ve done over 220 acquisitions and more than 150 divestitures, some big and others small.” Invest. If you want your company’s investments to be big enough to move the needle, your capital expenditures to sales ratio needs to exceed 1.7 times the industry median for ten years. That’s a big number, but when capital is spent wisely it can enable a company to expand faster than its industry. General Motors’ Mary Barra exemplified this strategic move when she committed more than half of GM’s product development capital ($27 billion through 2025) to pursue leadership in the global electric vehicle market. Improve Productivity. The most successful companies reduce administrative, sales, and labor costs more deeply than others, and in so doing achieve 25 percent more productivity improvement than their industry’s median over a ten-year period. This is exactly what Allianz’s Oliver Bäte did to help him pursue his renewal agenda, “Simplicity Wins.” In an industry that had seen flat expense ratios at 30 percent for decades, Bäte—soon after he became CEO—drove the company’s expense ratio below 28 percent while increasing customer loyalty from 50 percent in 2015 to 70 percent in 2019, and increasing internal growth rates from negative rates in 2015 to 6 percent in 2019. Differentiate. The best CEOs improve their business models and create pricing advantages in ways that are big enough to change a company’s trajectory. As a result, their companies achieve an average gross margin that exceeds the industry’s by 30 percent or more over a decade. Former LEGO CEO Jørgen Vig Knudstorp used this strategic move well in pursuing what he called, “a strategy of niche differentiation and excellence” that aimed to refresh at least half the company’s core products every year. He created, for example, digital platforms that strengthened communication among LEGO fans, developed products for girls, licensed collections (e.g., Star Wars), and launched the successful LEGO movie franchise. Allocate. This move is deemed big when a company shifts more than 60 percent of its capital expenditures among business units over ten years. Doing so creates 50 percent more value than companies that reallocate more slowly. Resource reallocation involves more than just capital, however; it also means shifting operating expenditure, talent, and management… – page 511
Feike Sijbesma, former CEO of Dutch life sciences and materials sciences powerhouse Royal DSM, explains, “When we did daring things my board asked, ‘Are you sure?’ My answer was, ‘Of course not, there’s no way to be sure.’ We created a culture to be open about having insecurities, but also to have the guts and determination to go after the opportunities.” The best CEOs aren’t only willing to venture into uncharted waters—they’re also willing to boldly stay the course on stormy seas. – page 566
“Being terrified but going ahead and doing what needs to be done—that’s courage. The one who feels no fear is a fool, and the one who lets fear rule him is a coward.”19 Medtronic’s George puts a fine point on the importance of this aspect of the role. “I’ve seen some otherwise very well-qualified CEOs who lacked courage,” he observes, “and their companies managed for a while but atrophied over time.” As we explored where this courage comes from, we found the best CEOs… … are exceptional futurists … keep an eye on the downside … act like an owner … regularly apply “heart paddles” – page 575
Virtually every CEO we spoke to emphasized the importance of having a clear point of view on where the world is going. They keep careful track of shifts in technology, changes in customer preferences, new competitors, and threats on the horizon. Doing so enables them to place bets before these trends become conventional wisdom and to maintain conviction when others inevitably criticize their choices to invest in markets that may not exist or technologies that are considered long shots. – page 582
taking risks only makes sense when the trade-offs are understood. “Most of the time, you’re making strategic decisions with imperfect information,” says Baker, who became head of the water and hygiene services giant in 2004. “If you wait until you have everything you want to know, then you’re likely to miss the opportunity. More often than not, you have to make calls with incomplete information. I often ask, ‘Which mistake can you more afford to – page 654
When top CEOs are faced with making big, bold decisions, they say that the best way to arrive at the right answer is to think like an owner. – page 697
many of the best CEOs think of making big moves: as a series of “S-curves” driving change over time. This means they ramp up into a period of intensive activity and radical improvement through a set of big moves, followed by a period of restoration while still improving incrementally, followed by another ramp-up in big-move intensity, and so on. Excellent CEOs are always looking to the next S-curve while ensuring the current one is delivered on. – page 733
“No one likes change, so you need to create a rhythm of change. Think of it as applying ‘heart paddles’ to the organization. – page 740
It’s an existential issue to change enough, regularly enough. If you’re not doing this, you’re not going to be around.” – page 742
Every big move should have a start and a finish, with the completion of each phase building confidence and creating capacity for further change. – page 757
83 percent identify capital allocation as a key lever for growth—citing it as even more important than operational excellence or M& – page 789
the top decile of high-performing CEOs is much more likely to shift around large amounts of capital, and they do it far more often than average performers. – page 791
Internally, it has to do with the political challenges of taking away from A and giving to B. “Resource allocation is one of the most important things,” says Adidas’s Kasper Rørsted. “Most people don’t want to give up resources, so very often the CEO has to intervene.” – page 799
Coming in from the outside can make it easier to move resources around. – page 803
Thinking like an outsider when it comes to reallocation means a CEO isn’t wed to tradition, encumbered by internal loyalties, or willing to bow to short-term pressures. Instead, they regularly ask themselves what a new CEO with no emotional ties or history would do if brought in to take over the company. Practically speaking, this translates to allocating resources by… … starting with a zero base … solving for the whole … managing by milestones (not annual budgets) … killing as much as they create – page 824
Now let’s apply this learning to the way most companies traditionally approach resource allocation: It starts with last year’s budget or some other form of historical baseline (the “anchor”). This means that capital is likely to get distributed based on the way it always has been in the past. – page 839
But what if the “anchor” is replaced by zero? No investment is taken as a given—every investment is scrutinized, alternatives explored, and approval justified by how it helps deliver against the company’s strategy and vision. – page 842
“the ability to see things through a fresh set of eyes” – page 867
“You’re never going to have a chance unless you radically reallocate resources, so with that we started producing a product portfolio every year that was fifty to seventy percent new.” – page 868
‘We’re going to look at your investment plan from top to bottom. We’re going to put all the plans together, and we’re going shave off the stuff at the bottom and we’re going to double down on the things that we all collectively know we need to go after as a corporation. And it may mean somebody gives something up over here. Or it may mean that somebody takes the lead over there. But if we don’t do that collectively as leaders of the corporation, as leaders of Lockheed Martin—not just leaders of Aeronautics, or Space, or Mission Systems—then we’re not going to be as strong as we can be as One Lockheed Martin.’ ” – page 873
“Otherwise if the leader of the business were to make the decision themselves, they would of course do what they think is right for their business. But that’s not necessarily right for the company as a whole.” – page 880
Allianz’s Oliver Bäte explains the resistance he experienced when centralizing some functions, as well as the analogies he used to help cut through the office politics: “We grow up with all these kingdoms, that produce their own grain, have their own cows, have their own machinery, build their own highways, and so on. So the leaders of your businesses say, ‘If you take all these resources away from me, I don’t rule a kingdom anymore. I’m not going to be anything more than a sales outlet.’ “That is totally the wrong analogy,” he continues. “The better way to think about it is like the Mercedes-Benz team in Formula 1. You have two champions. You have Lewis Hamilton, who is a world champion race car driver, which is the heads of the business units. And you have the makers of the car, which is Mercedes, that’s the role of the central functions. Lewis Hamilton doesn’t design tires, steering wheels, the chassis, or the engine. But he still has to drive in Shanghai, Monte Carlo, and so on. And he has to finish the race first. That’s the power of solving for Allianz as a whole,” says Bäte. “You [the business head] tell us what car you need to win the race, and we [the center] will bring it to you, built on a world-class platform.” – page 886