The echoes of history are growing louder for today’s CEOs.
Just as the turn of the 20th century brought era-defining innovations like the electric lightbulb, telephone, and automobile alongside increasingly sensitive geopolitics, today’s leaders face a technology revolution and a more politically complex world.
The visionary founder-CEO archetype that defined that earlier era — exemplified by Rockefeller, Carnegie, and Ford — is once again prominent as new business empires emerge with the capital-efficient scale offered by today’s technologies and global markets.
Yet today’s CEOs face the unique pressure of driving efficiencies to deliver quarterly results (with growing dividends and buybacks) while investing in the kind of transformative plays that can drive future growth. These competing objectives require different management skills, different metrics of success, and in particular a more centralized approach to creating and redeploying financial capacity.
Making matters trickier, the median CEO tenure among large companies worldwide declined 8% from 2013 to 2023 to 4.6 years, shortening the time window CEOs have to deliver demonstrable impact.
The growth imperative
Recent decades have seen the rise of founders like Steve Jobs, Jeff Bezos, and Mark Zuckerberg, who grew companies around innovative ideas and long-term visions. This shift is reflected in market performance: While value stocks outperformed growth stocks in 96% of all 10-year periods from 1936 to 2009, growth stocks have beaten value stocks in every 10-year period from 2010 to 2023.
This trend holds even when excluding the largest tech stocks. The history-defying success of growth stocks is enabled by technology — particularly smartphones, hyperscale cloud computing, and machine learning — that has created unprecedented opportunities to scale and disrupt incumbents.
Leaders are internalizing this lesson. In a 2024 survey by the Oliver Wyman Forum and the New York Stock Exchange, 56% of CEOs ranked growth as their top priority, marking a significant shift from the pandemic years’ focus on efficiency and cash flow.
However, growth is not easy to find. Net equity issuance trends reveal that CEOs over the past two decades have invested less in their businesses and returned more capital to shareholders. This suggests many leaders struggle to find profitable growth strategies for long-term capital deployment. This scarcity of high-quality growth plays makes them all the more valued by investors.
Mindful of short tenures and short-term growth pressures, many CEOs start boldly. From 2013 to 2023, CEOs averaged 3.6 and 3.8 merger and acquisition deals in their first and second years, respectively, dropping to 2.1 by their eighth year, if they made it that long.
Becoming a growth company does not require being a tech giant, even if it usually requires a degree of technological sophistication. Many companies from outside tech have successfully embraced innovation to become growth engines. Netflix began as a DVD rental company and transformed itself into one of the world’s largest video streaming platforms. Mastercard and Visa have successfully adapted to technological shifts, solidifying their positions as leaders in the global payments ecosystem. Walmart’s digitalization journey is paying off — today it is the second-largest e-commerce retailer in the United States.
A new leadership framework
To succeed in today’s volatile environment, CEOs must split their strategy into two distinct horizons. Traditional three-year strategies — relics of a less tumultuous era — should be deprioritized in favor of rolling six-month plans tracked against real-time market signals, allowing for course corrections. The tight horizon helps ensure tangible results that fund the business. Long-term success requires visionary seven-year-plus plans that place strategic bets by anticipating structural market changes and competitor strategies.
While the playbook for long-term strategic visioning is well known, its importance cannot be overstated. The vision needs a point of view on trends across technology, regulation, demographics, competition, consumer preferences, and business model innovation. This vision then serves both as the north star for the company’s equity story to shareholders and as internal direction for bold initiatives that prove the strategy.
CEOs must also maintain strategic optionality given the risk of betting on wrong scenarios. If there are true path dependencies — where committing to one long-term scenario leaves a company ill-prepared for another — then leaders need to flag this and apply extra rigor and debate before making choices.
Looking ahead
For CEOs today, it is both the best and worst of times. Opportunities and risks are both exploding. To capture the former and minimize the latter, leaders must build their strategies around geopolitical forces while working to shape regulatory frameworks that enable growth. Smart investments in supply chain visibility and restructuring will boost resilience and competitiveness.
Misinformation and data quality challenges will require enhanced capabilities for vetting insights and countering false narratives.
CEOs must also combine their strategic focus with quick decision-making and execution to shape and win new market segments. Achieving AI return on investment will require close alignment between AI strategy and organizational context. Empowering the workforce in a volatile world will require truly agile and collaborative organizations.
Above all, CEOs must master the balancing act between bifurcated time horizons: Run fast but also run far. Survive today but also redefine the future. A new era of business reinvention has arrived, and it requires dreamers who are also maniacally focused operators.