CEO Excellence

The average CEO tenure has shrunk to just under five years. During that time, they face a staggering reality: an executive's actions account for up to 45% of their company's performance. Yet, despite the immense pressure and responsibility, there has never been a clear, data-backed consensus on what separates the absolute best from the merely good. The role is often described as lonely and learned through trial by fire. New leaders receive countless conflicting opinions, inheriting a playbook cobbled together from anecdotes and assumptions. They're told to be bold yet prudent, visionary yet grounded in operations, authentic yet politically savvy. This leaves a critical question unanswered: in a role where the stakes are so high, what does excellence actually look like on a day-to-day basis?

The search for that answer is what drove the creation of this book. After two decades advising leaders at McKinsey & Company, authors Carolyn Dewar, Scott Keller, and Vikram Malhotra realized that even with access to immense resources, CEOs were still flying blind. They launched an exhaustive research project, analyzing 25 years of performance data on thousands of public company CEOs to identify the top performers—the top 5% who consistently created disproportionate value. They then conducted in-depth, multi-hour interviews with 67 of these elite leaders, including figures like Satya Nadella of Microsoft and Mary Barra of GM. Their goal was to distill the specific mindsets and practices that truly define CEO excellence.

Module 1: Setting the Direction — Be Bold

The first core responsibility of a CEO is setting the company's direction. Excellent CEOs approach this with a distinct mindset. They aim to change the game entirely. This starts with a bold vision.

The authors found that the best CEOs reframe what it means to win. Instead of setting a narrow goal like "be number one in our market," they define a much larger, more ambitious mission. Take Ajay Banga at Mastercard. The obvious vision was to "win in payments." But Banga saw that 85% of global transactions were still cash. So he reframed the mission to "kill cash." This simple shift opened up a vast new strategic landscape. It pushed Mastercard to innovate for the cash-based economy, not just compete with Visa for the existing 15%. Similarly, Reed Hastings could have aimed for Netflix to be the number one DVD company. Instead, the vision was to become a global entertainment distribution company. This justified the pivots to streaming, original content, and global expansion.

Next, this vision needs to be grounded. Exceptional leaders build their vision at the intersection of four key elements. Hubert Joly, who engineered the stunning turnaround at Best Buy, used a simple framework. He looked for the intersection of what the world needs, what the company is good at, what employees are passionate about, and how the company can make money. For Best Buy, this meant shifting from selling electronics to "enriching lives through technology." They used their knowledgeable staff and physical stores to help customers navigate a complex tech world. This vision was both inspiring and economically viable.

From this foundation, the authors reveal that the best CEOs make big, transformative moves early and often. The data is clear. The odds of an average company becoming a top performer are just one in twelve. To beat those odds, you need to act boldly. The research identified five types of "big moves" that dramatically increase a company's chances of success. These are:

1. Programmatic M&A: Consistently buying and selling businesses to shape the portfolio.
2. Capital Investment: Investing significantly more in capital projects than industry peers.
3. Productivity Improvement: Driving deep, sustained cost reductions.
4. Differentiation: Creating superior business models and pricing power.
5. Resource Reallocation: Radically shifting resources between business units.

Companies that make three or more of these moves are six times more likely to reach the top tier. Satya Nadella at Microsoft is a perfect example. He made huge acquisitions like LinkedIn, doubled down on cloud and AI, and divested the mobile phone business. These were bold, concurrent strategic actions that reshaped the company.

Finally, you can't make bold moves without bold resource allocation. So here’s the thing. You must adopt an outsider's perspective to reallocate resources. Internal politics and historical budgets create immense inertia. Abraham Wald, a WWII statistician, famously advised reinforcing the parts of bombers that came back with no bullet holes. He reasoned the planes shot in those areas never returned. That’s an outsider’s mindset. Mike Mahoney did this at Boston Scientific. He shifted 80% of R&D funds from slow-growth core products to high-growth areas. It was a painful move internally. But it led to a sevenfold increase in market capitalization. You have to be willing to question everything from a zero base. As GM's Mary Barra asked, "Why would we allocate capital, knowing we're not going to recover it?" This means killing projects, even if they're someone's pet project, to fund the "home runs."

Module 2: Aligning the Organization — Treat the Soft Stuff as the Hard Stuff

Once the direction is set, the next challenge is aligning the organization to get there. The authors found that 72% of strategy execution failures are rooted in people and culture issues. The "soft stuff." Excellent CEOs understand this. They treat culture, organizational design, and talent with the same rigor as finance or operations.

This begins with culture. The best CEOs drive culture change by focusing on one single, critical behavior. Instead of a laundry list of values, they pick the one thing that will make the biggest difference. At Alcoa, Paul O'Neill focused obsessively on "worker safety." He believed that by mastering the habits required for safety, the entire organization would learn excellence. And it worked. The company’s income hit record highs. At Microsoft, Satya Nadella’s "one thing" was a "growth mindset." He evangelized the shift from being "know-it-alls" to "learn-it-alls." This simple, memorable idea became the lynchpin for a massive cultural transformation.

But a slogan isn't enough. You have to reshape the work environment. One of the most powerful ways to do this is through personal example. Leaders must make change personal by modeling vulnerability. At Intuit, Brad Smith wanted to foster a culture of experimentation. He publicly discussed his own mistakes. He even posted his performance review on his office window for everyone to see. When leaders admit they aren't perfect, it gives everyone else permission to learn and grow. This is what Nadella did when he publicly apologized for giving poor advice on gender pay. He used his own mistake to demonstrate the growth mindset in action.

Next up is organizational structure. Most companies swing between centralization for efficiency and decentralization for agility. This creates chaos. Excellent CEOs create "stagility," a balance of stable and agile elements. They avoid these pendulum swings. They use a "helix" model instead of a traditional matrix. In a helix, an employee might report to a geographic leader for customer relationships and to a product leader for technical expertise. These are two distinct, hard-line reporting structures. It clarifies accountability and reduces the turf wars common in matrix organizations. Aon’s Greg Case implemented this to unify the firm. It ensured everyone was focused on both local client needs and global product excellence.

Finally, let's talk about talent. The best CEOs know that talent management starts with identifying the most critical roles. Stephen Schwarzman at Blackstone analyzed a portfolio company and found that just 37 roles out of 12,000 created 80% of the value. The top CEOs focus obsessively on getting the absolute best people into those few, high-value roles. This also means looking for the "left tackles." In football, the left tackle protects the quarterback's blind side. They aren't the star, but they are critical. In business, this could be the head of supply chain or R&D. Larry Culp at GE identified the supply chain leader as a critical left tackle, realizing flawless execution was paramount. Getting these non-obvious roles right is a hallmark of excellence.

Module 3: Mobilizing Through Leaders — Solve for Team Psychology

A brilliant strategy is useless if the leadership team can't execute it. The authors found that over half of senior executives feel their top team is underperforming. The problem is rarely a lack of talent. It's dysfunctional team dynamics.

The best CEOs understand this deeply. They build their top team by staffing for both aptitude and attitude. Aptitude is table stakes. You need proven experts. But attitude is what makes a team click. They look for people who prioritize the company's success over their own silo. Cadence CEO Lip-Bu Tan looks for transparency, humility, and a learning attitude. Alphabet’s Sundar Pichai highlights empathy. When a team member isn't the right fit, excellent CEOs act fast, but they are also fair. They ensure expectations were clear and resources were provided. But they don't let a bad fit fester for years.

Once the team is in place, the work begins. The most effective teams focus only on work that only the top team can do. They are ruthless about prioritization. They avoid the "law of triviality," where teams spend hours debating minor issues like a bike shed but only minutes on a multimillion-dollar investment. Ecolab’s CEO Doug Baker says his top team focuses on two things: what can make the company successful, and what can kill it. Everything else is delegated. This requires a "first team" mindset, where every executive's primary allegiance is to the leadership team, not their own department.

To make this work, you need a rhythm. The best CEOs proactively design a multi-tempo operating rhythm. This is a system for running the business. It usually includes:

• Weekly meetings for rapid updates and problem-solving.
• Monthly meetings for deeper strategic and operational reviews.
• Quarterly business reviews to hold units accountable.
• Annual off-sites for big-picture strategy and alignment.

Jamie Dimon at JPMorgan Chase anchors his rhythm with a weekly Monday morning meeting. There's no set agenda. Leaders bring their most pressing issues. This forces transparency and ensures critical problems surface early. This rhythm synchronizes the entire organization.

Within this rhythm, the CEO plays a specific role. The CEO must act as the chief "dot-connector." Because they have the broadest view, only they can see the disconnects between finance and HR, or between product and technology. Gil Shwed at Check Point Software provides a key example. After an acquisition, his team was focused on marketing a new product. Shwed intervened. He asked how this new cloud product would integrate with their existing flagship product. No one had considered it. By connecting those dots, he forced the team to create a unified solution for customers. This is a job that only the CEO can do.