Few things a CEO can do are more powerful than leading strategy well. A CEO can elevate the quality of an organization’s strategic choices and its commitment to acting on them. This is because CEOs are uniquely positioned to ensure strategies are designed to a high standard and on strong value-creation foundations. Companies grow faster and earn higher returns after appointing CEOs with more structured approaches to strategy.1
None of this means the CEO acts alone. Strategy is a team sport. Impactful work, such as developing foresight, research, ideation, analysis, and decision-making, can be distributed across an organization. But the CEO’s stature, perspective, and authority mean the success of a strategy ultimately depends on their involvement.
This article sets out six roles the CEO cannot delegate without putting at risk the value a strategy can create: choosing how to engage in strategy, owning the value creation thesis, making the hardest reallocation calls, changing the strategic tempo when necessary, inspiring the organization to see opportunity in uncertainty, and being a catalyst for change. We explain each role and what it takes to do it well. We conclude with a discussion of how the beliefs a CEO builds about strategy can help them fulfill those roles.
The CEO chooses how to engage in strategy
The CEO should be close enough to the design and delivery of strategy—the debates, decision-making, and the flow of resources to opportunities—to bring their judgment to bear on the organization’s most consequential issues.
Accountability for how strategy creates value can fragment when the CEO is not effectively engaged. Finance influences the portfolio through hundreds of allocation decisions, human resources manages the talent agenda, and business leaders control their own operations. Although the CEO oversees these functions, deliberate practices are required to know the business well enough to act when it matters most.
Many of the most strategically effective CEOs we have observed share common practices when engaging in strategy. They engage with the portfolio at a resolution fine enough to know which businesses are creating value and which are destroying it. They convene regular decisions on which initiatives to fund, which to shut down, and which to accelerate. They treat new resource commitments and corresponding reallocations as inseparable, so capital and talent keep moving toward what matters most to the strategy. They insist on postmortems to review whether the underlying strategic choice succeeded or failed. They personally engage in the planning and budgeting cycle, intervening when what gets funded no longer reflects the strategy. And they ensure that a strategy function, if it exists, has a clear mandate. The specifics vary by company and circumstance. The discipline behind the specifics should not.
A. G. Lafley’s time as CEO of Procter & Gamble (P&G) shows many of these practices in action. He redesigned P&G’s strategy reviews (previously called “corporate theater”) into focused debates on a few strategic questions. No presentations were allowed during these reviews, and only a few people from the business unit under review could be in the room. This process gave Lafley the granular knowledge and close engagement he needed to lead the company. Monthly and quarterly meetings ensured engagement and decision-making. Business leaders submitted letters directly to him before each meeting, and the sessions were used to surface and resolve strategic issues rather than to seek approval. Lafley also regularly devoted full days to unstructured strategic thinking.
Lafley stayed externally oriented by visiting consumers’ homes and shopping in stores whenever he traveled. He personally led resource allocation, divesting or discontinuing more than 90 brands during his second tenure to concentrate resources on the 65 to 70 that created the most value. On talent, he took responsibility for placing staff into the roles most important to P&G’s strategy and was directly involved in developing the company’s top 150 executives. Throughout planning and budgeting cycles, he grounded discussions in the same question: Does this reflect the strategy? When strategic bets failed, he insisted on postmortems. At one point, he had 30 years’ worth of unsuccessful acquisitions analyzed to identify the root causes of their failures.
The CEO’s involvement in strategy can represent a meaningful investment of time. But what it enables is something no briefing document or delegated process can replace: a CEO who knows the business well enough to lead the work of strategy and create outsize value, and to discharge the following roles with confidence.
The CEO owns the value creation thesis
A great strategy rests on a clear value creation thesis: How will this company—in these markets and with these sources of advantage and vision of the future—earn returns that justify the resources committed? During the strategy’s design, many people may contribute to building that thesis. But the CEO must own the thesis and is ultimately accountable for its rigor and for ensuring its continued relevance.
Ownership is more than authorship. The CEO must build genuine conviction in the management team in the thesis and the wider strategy it explains. The CEO and their team need to be able to articulate the value creation thesis in their own words, defend it under challenge, and recognize when the evidence has begun to invalidate it. A thesis that lives only in the strategy deck is not owned by anyone; a thesis that can be explained in any forum is. The difference shows up in the consistency of decisions made across the company. When an organization—and at times a broader ecosystem—understands a strategy’s thesis, leaders at every level can make their own decisions consistent with it.
Jamie Dimon’s two decades at JPMorgan Chase illustrate what it looks like when a CEO owns and evolves the value creation thesis of the company’s strategy. His original thesis was that risk discipline is an engine for growth. A “fortress balance sheet” let the bank lend through downturns and acquire distressed competitors when others could not.2
The thesis was vindicated when JPMorgan was in a position to absorb Bear Stearns and Washington Mutual in 2008. But by 2015, Dimon was already revising the thesis, warning shareholders that “Silicon Valley is coming” and that a fortress balance sheet would not be enough. JPMorgan’s technology budget doubled over the decade that followed, enabling growth in attractive digital banking, payments, and international retail markets while developing new sources of advantage in scale and customer embeddedness. Each phase built on the previous one: The fortress funded the technology embrace, and the technology embrace extended the fortress into markets that bank branches alone could never have reached. The same impulse is reflected in Dimon’s pursuit of innovation through artificial intelligence, including tracking its impact on the bank’s P&L.
Dimon rearticulates the value creation thesis in an annual shareholder letter detailed enough to ensure the strategy is understood by more than 300,000 employees as well as clients, investors, regulators, and partners. JPMorgan’s market capitalization grew from roughly $140 billion when he assumed the role of CEO in 2006 to roughly $900 billion in 2025, with cumulative total shareholder returns more than one and a half times the S&P 500 over the period.
Strategically effective CEOs continually test their strategy’s value creation thesis. They hold a view of the company’s intrinsic value, constantly weighing it against the market’s shifting expectations. They commit firmly enough to act on the thesis but remain open to revising it. They seek out the people and evidence most likely to inform it, and they engage challengers around them to test the coherence of the thesis. When CEOs can no longer articulate why the thesis is right, they treat that as a signal to step back.
The CEO makes the hardest resource reallocation calls
Great strategies often require countering an organization’s inertia by shifting resources—especially capital and talent—from an existing business to an unproven opportunity. These can be the hardest calls a CEO makes, especially at enterprise scale. They cannot be delegated effectively. Warren Buffett has observed that most CEOs arrive at the role having excelled in operations, marketing, or engineering, only to find themselves responsible for capital allocation, a critical skill that they may never have practiced and is not easily mastered.3 Yet it is precisely because these calls are so hard that they separate the CEOs who create outsize value from those who do not.
These decisions are hard for a reason. The unit losing resources usually has a longer track record, a more polished business case, and the leaders most adept at defending what they have. The unit gaining resources may have uncertain economics and a thesis that the organization finds attractive but not pressing enough to fund at the expense of proven businesses. Dispassionate analysis often narrowly favors the new commitment; organizational politics overwhelmingly favor the old. The CEO is the only person whose authority is great enough to overrule inertial thinking.
Satya Nadella’s first years as Microsoft’s CEO show what these decisions can look like. Early in his tenure, he made two moves that depended on his authority as CEO. One was subtraction: He shut down Microsoft’s phone hardware business, unwinding the Nokia handset acquisition he had inherited from his predecessor. Another was redirection. Nadella concluded that meeting users on their preferred platforms would create more value than defending Windows. So he made Office, one of Microsoft’s most valuable franchises, available on iOS and Android, despite internal resistance.
To reallocate at the scale the strategy required, Nadella had to change the organization. He moved Microsoft away from what he called “a confederation of fiefdoms”—the Windows-centric divisional model in which every reallocation risked being a negotiation among entrenched parties—and centralized capital allocation decisions around cloud and platforms.4 The most consequential reallocation was the sustained investment in Azure, which grew from a nascent cloud offering into a business generating more than $75 billion in annual revenue by 2025. The restructuring also freed up capital and strategic focus to support a string of additional investments that positioned Microsoft for the generative AI wave, including $7.5 billion in GitHub and roughly $13.8 billion in OpenAI. Microsoft’s market capitalization rose from roughly $300 billion when he became CEO in 2014 to more than $3 trillion by 2024, with cumulative total shareholder returns roughly three times the S&P 500 in that period.
The default in most companies is for reallocation to fall short of what the strategy needs. Bold aspirations become modest adjustments, and the portfolio changes only marginally. The CEOs who create the most value resist that pull. They move resources to the biggest opportunities, and accept that doing so sometimes means making part of the organization smaller so the strategy creates more value.
Equally important is the discipline of ensuring that some things stop. In many companies, new commitments are announced while the projects they should displace quietly continue, consuming capital, talent, and management attention. The CEO is essential to ensuring that the business abandons what is less valuable in favor of supporting the strategy.
The CEO can change the strategic tempo
Every organization moves at a default strategic tempo, often reflecting its budget cycle, leadership comfort, and the momentum of what has been working. That tempo is not necessarily what the strategy requires, yet in the absence of a major disruption, it can persist. A major strategic move may need years of investment and ecosystem development, or it may need to scale faster than the organization has ever moved. The CEO is uniquely able to override the default tempo, imposing patience when the organization wants to rush or forcing acceleration when it wants to take more time.
It is difficult to both speed up and slow down strategic tempo. Imposing patience requires the CEO to defend an investment whose returns have not yet materialized against the natural pull of the quarterly review, the activist investor, or the operating leader who would prefer to redirect the funds to something already working. Forcing acceleration requires the CEO to absorb the discomfort of moving before the organization is ready—launching at scale before every issue has been resolved or committing capital before every assumption has been tested. The default is for organizations to move at a tempo that minimizes near-term anxiety, which is rarely the tempo the strategy demands.
Reed Hastings’s leadership of Netflix’s transition from DVD to streaming illustrates what changing the strategic tempo looks like in both directions. By 2007, Hastings was convinced streaming was the future. He could have forced a rapid transition; instead, he launched streaming as a free add-on to DVD subscriptions and ran both businesses in parallel for four years. Hastings funded the streaming build-out with DVD cash flows while broadband penetration grew and the content library matured. The strategy required patience, so he imposed it, resisting the organizational instinct to demand returns from a business that needed years to mature. When conditions changed, he shifted the tempo: splitting DVD and streaming pricing in 2011, committing $100 million to the series House of Cards without a pilot, and launching in 130 countries simultaneously in 2016.
The transition also shows how getting the tempo right isn’t about perfection and what a CEO-led correction looks like. The 2011 Qwikster announcement—an attempt to accelerate the separation of DVD and streaming into distinct brands—cost Netflix 800,000 subscribers and a 75 percent decline in its stock price. As Hastings acknowledged, “There is a difference between moving quickly—which Netflix has done very well for years—and moving too fast, which is what we did in this case.”5 He reversed the announcement but kept the strategic commitment, recognizing that he had misjudged the pace, not the direction. Netflix’s market capitalization grew from roughly $1.5 billion before the streaming transition to more than $150 billion by the time Hastings stepped back as co-CEO in 2023, far outpacing the S&P 500.
Calibrating strategic tempo requires the CEO’s judgment. When things go wrong, the CEO distinguishes between a mistake in pace and a mistake in direction. They correct one without abandoning the other. The CEO must also guard against their own defaults, because the tempo a strategy demands changes as conditions change.
The CEO can inspire the organization to lean into uncertainty
Uncertainty makes organizations hesitate. When the competitive landscape shifts in ways that are hard to understand or predict, the natural response is to delay commitments, hedge bets, and let the picture clarify before acting. The companies that create the most value in uncertain environments do the opposite: They move toward the uncertainty with a point of view about why it favors them.
That point of view does not emerge on its own, and it cannot be generated by analysis alone. Analysis can sharpen a thesis, but it cannot supply all the conviction needed to mobilize an organization. Only the CEO, conferring with members of their team, can supply it. The CEO sits at the intersection of the company’s history, purpose, capabilities, and ambition, and holds the authority to commit the institution to a future that has not yet been validated. A CEO who refuses to take a position will find their organization doing the same. The cost of that posture is rarely visible in the moment, because nothing has gone obviously wrong. It shows up later, when the period of uncertainty resolves, and the organizations that committed early have built positions the late movers can no longer challenge.
Doug McMillon’s transformation of Walmart illustrates what this action looks like. When he became CEO in 2014, the prevailing view was that big-box retailers could not compete in e-commerce. McMillon saw the same uncertainty but drew a different conclusion. Walmart’s 4,700 stores in the United States, within ten miles of 90 percent of the population, were an advantage in the digital world if the company could learn to use them as fulfillment engines for pickup and delivery. He ensured the e-commerce strategy was designed around that thesis, so store managers experienced digital growth as something that made their businesses larger, not smaller.
Data reinforced the strategic framing. Customers who shopped both in stores and online spent roughly twice as much. McMillon grounded the organization on what would not change—low prices, purpose, respect for associates—so that leaders at every level had a stable platform from which to drive change. McMillon made the case publicly, stating in a 2017 interview that the company needed people to “lean into the future.”6 This was a message to investors and partners as much as to the organization itself.
McMillon later described the transformation simply: “This story is actually about people changing.”7 Walmart’s category buyers and merchandisers had to strengthen their product management and digital design skills to shape online shopping experiences. Store operators had to accept that tech priorities would be set by customer needs, not by their own preferences. When specific bets failed—and several did—McMillon corrected openly without letting the setbacks become an argument for retreat. By the time he stepped down in early 2026, Walmart’s global e-commerce revenue exceeded $100 billion, its advertising business had reached $6 billion, and total shareholder return during his tenure was more than 400 percent, ahead of the S&P 500.
The CEO cannot resolve uncertainty; no one can. But uncertainty is when action is most needed. Often, only a CEO can inspire an organization to act when a leap of faith is required, applying experience, authority, and leadership skills. That is the difference between an organization that waits for the fog to clear and one that leads through it.
The CEO is a catalyst for change
A strategy usually changes something about the business in pursuit of greater value. But sometimes, a strategy requires a substantial pivot or transformational change, often as a consequence of decisions CEOs make in fulfilling the roles above. When strategy requires such change, the CEO is a critical catalyst—the one leader positioned to sustain it. Other executives can catalyze change within their own domains, but only the CEO can hold the whole organization to a new course.
Catalyzing change takes persistence from a CEO. The energy behind a strategy can dissipate as urgency fades and the next problem arrives, and the organization slips back toward how it used to work. The CEO is essential to overcoming the many collective-action challenges that can thwart change.8 Positioned above individual interests, the CEO is uniquely situated to catalyze the change. The CEO is needed to hold firm when the costs of change are clear and the returns are not, and retreat may feel like the more prudent option.
David Cote’s transformation of Honeywell shows how a CEO can be a catalyst for the changes a strategy requires. When he became CEO in 2002, the company was focused on meeting quarterly results at the expense of investment in the future. Cote’s strategy called for the company to do two things at once—perform now and simultaneously invest for the future. That required changing how the company worked, from its approach to strategy design and mobilization to its operating model to its culture. These changes did not come easily due to what Cote termed a form of entropy: the drift toward disorder that a leader must continuously seek to counteract.
Cote worked hard to hold the company to a new course. He set a higher standard for strategy and changed how it was debated, replacing long annual presentations with fact-based summaries and a standing review every six weeks. As a result, strategy became continuous work rather than a yearly ritual. He ended “make the quarter” meetings and rebuilt accounting to better reflect the realities of value creation. Cote rejected requests to revert to old practices even when doing so hurt reported earnings. He accepted a stretch of lagging performance and a stock price that fell about 25 percent while the changes matured, the costs visible long before the returns.
Cote ultimately played a catalyst role for years to ensure the changes stuck, taking over a decade to roll out what he called the Honeywell Operating System under the mantra “go slow to go fast.” His strategy and commitment to change paid off. Over his tenure, Honeywell’s market value grew from roughly $20 billion to $120 billion, a return of about 800 percent, roughly two and a half times the S&P 500 over the period.9
A strategy can be chosen quickly, but changing an organization and its value creation trajectory takes sustained commitment. Holding the organization to that commitment, for as long as the strategy requires, is work only the CEO can do.
The power of beliefs about strategy
Carrying out the roles outlined in this article is difficult. They require confronting hard trade-offs, taking professional risks, and a great deal of energy. The CEOs who fulfill the roles benefit from many sources of support, including collaboration with their team and board, counsel from advisers and peers, and, powerfully, beliefs about strategy and value.
By beliefs we mean ways of thinking about value creation that enable leaders to judge evolving situations and make hard choices. Beliefs can act as a shorthand for wisdom that leaders have earned from experience and study, which can be applied to challenges that pages of analysis or hours of debate alone cannot settle. A CEO’s beliefs are built over their career through study and lived experience. Lafley came to believe that what consumers do reveals far more than what they say, and that value came from connecting unarticulated needs with what technology makes possible. He built his beliefs from many sources, including lessons learned from time spent with the management theorist Peter Drucker and from observing consumer behavior in laundry rooms and nurseries. According to an unpublished interview, Lafley’s beliefs were essential to his ability to make many difficult strategic choices.
Beliefs are most powerful when they are embedded in an organization. Held only by the CEO, a belief strengthens one person’s decisions; embedded in the organization, it strengthens everyone’s, so that choices made in disparate rooms cohere. Cote constantly reinforced his belief that Honeywell could achieve short-term performance and investment in the future during town halls, planning meetings, and training sessions, until he began to hear leaders repeating it unprompted. By then, the belief was shared, shaping strategic decisions across the company.10
Beliefs should be firm but never fixed; much of a leader’s power relies on their capacity to keep learning. That capacity is likely to grow in importance. As AI makes access to knowledge and analysis increasingly abundant, the judgment that comes from beliefs based on a leader’s own experience and learnings will remain a scarce source of value.
Strategy at its best is the work of an institution, but the CEO plays essential roles. A CEO can hire excellent strategic thinkers, build a capable strategy function, and surround themselves with leaders who understand individual parts of the business better than the CEO ever will. But the six roles described above belong to the CEO. The most important work of a CEO in strategy is understanding how strategy creates value, holding well-grounded beliefs about it, and ensuring leaders across their organization can draw on those beliefs to collectively debate and shape their institution’s future.
This article is adapted from Strategy and Value: The Four Foundations of Long-Term Performance, forthcoming in November from McKinsey and published by Wiley.
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