- A large fashion retailer faces the possibility that much of its supply chain will be subject to 90 percent tariffs depending on how and when geopolitical winds shift.
- A global industrial-equipment maker needs to quickly redesign a flagship product that keeps malfunctioning because of stronger and more frequent weather events.
- A consumer-packaged-goods company needs to optimize its coding and product-marketing processes given that gen AI can automate both—and competitors are already doing so.
Leading is more difficult now than ever before. Every hour brings CEOs and their teams a flood of new information about tariffs, geopolitical instability, social unrest, the rise of gen AI and other technologies, shifting demographics and workforce expectations, the business impacts of climate change, and much more. CEOs should address these and other compounding business challenges and make decisions as quickly and as accurately as possible—despite any gaps in knowledge and under intense scrutiny of stakeholders, shareholders, and the 24/7 news cycle.
The highest-performing leaders understand that along with every obstacle there may be a business opportunity—if they can approach periods of disquiet with calm, clarity, confidence, and a focus on future needs as well as current emergencies.
In the wake of extreme uncertainty, CEOs should take a step back and reflect on the leadership traits and capabilities that will define their own and others’ success in the future and embed these traits and capabilities into their organizations. Our previous research on the art of 21st-century leadership, as well as our more recent thinking and discussions with CEOs on the topic, point to six critical traits for leadership success: positive energy, personal balance, and inspiration; servant and selfless leadership; continuous learning and a humble mindset; grit and resilience; levity; and stewardship.1
Even though some leaders may be born with, or have already developed, these traits, all leaders need to continually sharpen them to succeed. Such growth cannot be left to chance; in our experience, a lot of organizations talk broadly about career trajectories and succession plans, but very few devote enough time and resources toward the development of the next generation of leaders. By contrast, CEOs in some of the world’s best-performing companies are setting themselves apart by standing up a leadership factory to develop tomorrow’s leaders today. In this article, we’ll talk about what they are doing and how other CEOs can do the same.
The most important lesson from our research, workshops, interventions, and executive conversations? The CEO must be involved, deeply and personally, in the leadership development process.
Create a CEO-led leadership factory—at industrial speed and scale
Building a leadership factory, which involves taking a systematic approach to identifying, nurturing, and empowering future leaders, is a group activity. But its lessons are more likely to stick, and growth opportunities are more likely to emerge, when CEOs, working closely with their leadership teams, take an active, hands-on role in building the factory.
To begin creating a leadership factory, CEOs and their teams should focus on the following critical actions and support them with enabling technologies and detailed metrics to ensure that leadership development efforts are having the intended impact.
Take the pen and outline the traits and attributes you want future leaders to have
CEOs must ask a fundamental question of themselves and their leadership teams: “What kind of leaders do we want to be—and what kind of leaders do we want to build?” The answer will be different for every company, of course. The CEO of one technology company asked his top team to reflect on the core leadership attributes required for the company to weather recent economic and competitive shocks. All agreed that resilience and optimism were crucial, so the company emphasized the development of a culture in which “failures” were instead treated as opportunities to learn. And, to foster trust and optimism, the company organized team-building activities and created spaces for informal interaction so leaders could connect with their teams on a personal level.
Engage your high potentials and mavericks—and get them into the field quickly
Identifying priority traits is critical; just as important, CEOs and their leadership teams must engage early and often with high-potential employees and unconventional thinkers in the organization, recognizing that innovation often comes from the edges of the business. Skip-level meetings are a powerful tool for this purpose. Most famously, Apple’s Steve Jobs would gather what he deemed the 100 most influential people at the company, including young engineers, to engage directly in strategy discussions—regardless of hierarchy or seniority.2 Nvidia’s Jensen Huang is similarly inclusive: “We don’t do just vice president meetings or director or board meetings. At the meetings I have, there are new college grads there. There are people from every different organization.”3
CEOs and their teams should continually evaluate their mavericks and high potentials based on their capacity to learn, intrinsic capabilities, and transferable skills. They should steer the top performers toward opportunities where they can get the experience they need—and quickly.
Field promotions, where individuals are placed in high-pressure leadership roles based on their potential to grow and succeed, can be a powerful tool for developing the next generation. Such stretch roles can be daunting, and, in some cases, it may be necessary for leadership teams to think creatively about their org charts when placing high potentials. But these assignments may ultimately turn into a significant competitive advantage for individuals: Leadership candidates who have experienced significant failures in the past are often looked upon favorably, precisely because they’ve shown an ability to rebound and recover.
In fact, history tells us that the mavericks who are encouraged to “try and try again” can end up delivering substantial value for organizations. Consider the career trajectory of technology giants like Steve Jobs and Bill Gates: Respectively, their early ideas for the Lisa personal computer and the Traf-O-Data, a primitive traffic-measuring system, served as the proving ground for much more successful computing innovations later on.4
Champion new approaches to risk-taking and learning
A culture of experimentation and learning is essential for leadership development—but it must be actively pursued. “Instillation of personal initiative, aggressiveness, and risk-taking doesn’t spring forward spontaneously,” General Jim Mattis explained in his 2019 book on leadership, Call Sign Chaos.5 “It must be cultivated for years and inculcated, even rewarded, in an organization’s culture. If the risk-takers are punished, then you will retain in your ranks only the risk averse,” he wrote.
Establishing a “fail fast, learn faster” culture can be helpful for encouraging individuals and teams to innovate and grow. For instance, the US Navy SEALs and other military institutions have long conducted “hot wash” reviews—or after-action meetings conducted immediately after an emergency or drill, where leaders take stock, celebrate noble failures, and extract lessons for future missions. Similar reviews are becoming more common in a range of organizations and functional areas, including in hospitals and other medical facilities and in software development. Meanwhile, to share internal and external knowledge more quickly, Procter & Gamble launched a thought leadership platform several years ago called Fastest Learner Wins—a collection of short (five minutes or less), “snackable” interviews with experts that people could access anywhere, anytime.6
Customer-oriented cultures, such as those at Amazon and Apple, rely on constant feedback loops to continually learn and improve. As Amazon’s CEO Andy Jassy explains, “A lot of the invention we do is listening to something customers are really struggling with, and they won’t tell you how to do it, but we start asking ourselves, why do those constraints have to happen and start to invent on their behalf.”7
In all cases, CEOs and leadership teams should take advantage of core technologies—gen AI and agentic AI, advanced analytics, and so on—to accelerate learning and leadership development. Such technologies can enhance the factory’s reach (allowing far-flung teams to access the same learning modules, at the same time or asynchronously, as required) and compress its learning cycles so organizations can build a deep bench of leaders faster and more effectively.
Shape and ‘own’ high-impact interventions for leadership development
As much as possible, leadership development interventions should be directed by the CEO and others on the top team and not simply relegated to HR or training departments. Such interventions should be aimed at addressing the specific challenges and needs of people in pivotal roles within the organization. The interventions may entail sessions on managing complex projects, dealing with ambiguity, and fostering a culture of innovation, among other themes. The critical point is that these leadership development interventions should be targeted at groups of high-performing peers, conducted in relatively small groups, and facilitated in a way that encourages personal growth and authenticity.
Senior-most leaders at McKinsey, for instance, directly led more than 20 high-impact interventions over an eight-month period, reaching more than 250 colleagues and client service teams. During these sessions, leaders worked with small groups of individuals to raise their personal and collective leadership capabilities and define their next S-curve of impact, with both clients and across the firm.
Some companies have established leadership forums, in which they convene high-potential employees to share questions and crowdsource answers to some of their biggest management challenges. Others have established daylong or multiday academies designed to take individuals out of their day-to-day responsibilities to develop key leadership skills. Still other companies have extended the hours dedicated to leadership development—in one case, from two hours per year to two full days per year.
They and others understand that “hire and develop” cannot just be a slogan; it must be a system. As Axel Dumas, CEO of Hermès, has noted “Every leader at Hermès is responsible for teaching and passing on their knowledge to the next generation.”8 Blackstone’s Stephen A. Schwarzman says he frequently reminds those promoted to senior roles of the message he gives to the company’s analysts every year on their first day of work: “You are not alone here, so don’t wear the weight of the world. … What may seem new to you won’t be new to the institution. Just ask for help.”9
Simplify and rewire the organization for faster decision-making
For CEO Jensen Huang, the benefits of a simpler organizational structure at Nvidia are less about efficiency and more about collaboration and problem-solving. “I love that there is no privileged access to information,” he said in a recent interview.10 Everyone is working off the same song sheet, he says, and hears the reasoning behind both the problem and the solution.
Other CEOs and their teams should also aim to dramatically simplify organizational structures and processes to enable faster, more effective decision-making. As JPMorgan Chase CEO Jamie Dimon said in a recent interview, its important to “kill bureaucracy all the time—and relentlessly.”11
There are multiple ways to streamline decision-making, including redefining decision rights to focus on a handful of owners and distinguishing between different types of decisions, as not all choices are high stakes. The buyers at one global clothing retailer, for instance, are fully empowered to bypass traditional hierarchies and can acquire designs, fabrics, and other assets within certain spending limits—all the better to keep up with consumers’ fast-changing fashion choices.
Meetings are another potential area for improvement. In his 2024 annual letter to shareholders, Dimon opined on the need to come to meetings prepared and with full attention. “I see people … all the time who are getting notifications and personal texts, or who are reading emails. … It’s disrespectful. It wastes time.”12
The very act of building a leadership factory provides an opportunity for the CEO and team to consider not just the traits and behaviors the organization needs but also those habits and actions that need to stop. This latter point is critical and frequently overlooked: CEOs will often say that they want a culture of transparency, for instance, but fail to identify the trade-offs that would be required to achieve more transparency (such as requiring teams in different functions to share information systems or to otherwise adopt operating processes that would force them to knock down silos).
Measuring the impact of a leadership factory
Having all these elements in place can ensure success with a leadership factory—but that’s just the first step. CEOs must also take care to measure the impact of the leadership factory across all components just described. Is the program delivering the intended outcomes? One technology company uses a range of KPIs to determine the success of its leadership factory, including the change in the amount of development time offered to employees, 360-degree feedback scores, client satisfaction scores, and employee satisfaction scores. If the leadership factory is not delivering on its metrics, CEOs and leadership teams can alter programs accordingly, including by removing low performers through “up or out” mandates or forced ranking based on monthly or even weekly evaluations.
Leadership in the 21st century requires more than just operational excellence. It demands vision, agility, and the ability to inspire and empower others. Indeed, as one CEO told us, navigating recent business trends has been a lot like trying to land a plane, “but I suddenly have little data or instruments with which to steer.” Against this backdrop, building a leadership factory is not just a strategic imperative; it’s a survival mechanism. And yet it remains an underutilized approach across most global organizations.
As we rethink the future of work in a world of traditional, gen AI, and agentic AI, the one role that we know won’t be disintermediated is that of the leader. But CEOs can’t simply build next-generation leadership through attrition, reputation, or the winds of chance. By systematically investing in the development of 21st-century leaders, CEOs and organizations can create deeply connected and committed teams, driven by a shared sense of purpose, open to innovation and debate, confident and composed, productive and prepared, and, most important, impervious to the disruptions that will inevitably emerge.
