When setting their direction, 21st-century CEOs make use of resources unimaginable to their pre-millennium counterparts: digital technologies, AI, vast data sets, democratized information flows, smart new algorithms, and more. They use algorithms as a tool for business analysis and apply algorithmic thinking when making strategic decisions. But is there perhaps some higher-level algorithm that would improve the odds of a successful tenure for today’s CEOs?
“Strategy” did not exist as a concept at most companies in America until management consultants first started billing for it.
Before Bruce Doolin Henderson opened the doors of Boston Consulting Group on July 1, 1963, the concept of “competition” barely existed in American business culture, let alone the concept of strategy.
There were great, successful companies. Those companies made plans. They were not, however, thinking analytically and rigorously at a high level about the three C’s: their customers, their costs, and their competitors.
“Ad Hoc, slow, short-term, insular.” That’s the overall characterization of corporate innovation processes that appears in a recent “State of Innovation” report by CB Insights, based on a survey of 677 corporate strategy executives.
Elon Musk is a productivity machine who works 100 hr weeks, is the CEO of two companies and sleeps at his office. In a powerful letter to his employees, Musk explains the 6 tips that keep him productive throughout the day.
Every leader understands the importance of the first hundred days or the first year in office—the period during which one must assess and diagnose, formulate a vision and a strategy, and create the early wins that build trust and legitimacy. And dozens of books and articles offer guidance about how CEOs in their final months on the job should approach their primary responsibility: helping develop and select a successor and then smoothly handing over power.
Leadership has its benefits—scale, knowledge, influence, and financial stability among them. But our research shows that as companies age and grow, incumbents increasingly focus on internal matters, have more difficulty freeing themselves from legacy businesses and approaches, and progressively shift their priorities toward running—rather than reinventing—the business. Nontraditional competitors, disruptive technologies, and new business models are making corporate reinvention a critical priority.
Imagine a world in which the average company lasted just 12 years on the S&P 500. That’s the reality we could be living in by 2027, according to Innosight’s biennial corporate longevity forecast.
Why is it that some companies have great heads of strategy who make an outstanding contribution to their companies, while others don’t? To answer this question, we evaluated 55 heads of strategy, and looked more closely at 11 who were particularly successful and 10 who were at the other end of the spectrum. The full findings are contained in this white paper. But here’s a synopsis of what we learned.
