The Five Traits of Transformative CEOs
Transformative CEOs act within a year of decline, pair quick gains with a growth second chapter, invest in R&D, change their leadership team and commit to large, long programs, and the data show each raises long-run TSR.
Summary
Only about 30% of large-scale transformations succeed. From an analysis of large US companies from 2004 to 2016 and 750-plus transformation journeys, BCG identifies five traits: launching a formal program within a year of a TSR decline (over 5 points of five-year TSR), unlocking quick gains while telling an investor story, adding a growth second chapter with above-peer R&D (5-plus points), replacing 20% or more of the officer group (4-plus points), and sustaining large programs (5 points).
Editor's opinion
Vague, retrospective 'traits of winning CEOs' framing without clear methodology -- classic survivorship-bias genre.
Key concepts
Formal transformation program · Second chapter · R&D versus capex · Leadership team change · Always-on transformation