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."