ESSENTIALS FOR LEADERS AND THOSE THEY LEAD

Welcome to the latest edition of Leading Off. We hope you find our insights useful. Let us know what you think at Alex_Panas@McKinsey.com and Axel_Karlsson@McKinsey.com.

—Alex and Axel

The end of the year is traditionally a time for reflection—and for CEOs and other leaders, there’s much to mull over. With a host of common dilemmas complicating executives’ ability to lead, there’s no time like the present to take stock of the leadership lessons we’ve learned throughout 2024. For our final issue of the year, we look at recent insights from leaders who are successfully navigating the increasing complexity and demands of their roles and building strong relationships with employees, colleagues, and other stakeholders—all lessons that you can take with you into 2025.

AN IDEA

Make meaningful connections

The CEO job may be a lonely one, but it’s also defined by relationships with a long list of internal and external stakeholders, from frontline employees and management teams to customers, investors, and government regulators. McKinsey’s Blair Epstein, Julia McClatchy, Kurt Strovink, and Eric Sherman suggest that CEOs can successfully engage their diverse group of stakeholders by embracing their role as the company’s bridge to external audiences, developing a distinctive narrative for the company as its “storyteller in chief,” empowering other leaders to champion the company’s vision, and strengthening relationships while preparing the organization to handle crises. CEOs can start by developing a deep understanding of their organizations’ purpose as well as their stakeholders’ motivations and goals. “These insights will shape the core narrative the CEO shares through public platforms, with adaptations to make it meaningful to different audiences,” the authors say. “Through continuous learning, the best leaders perfect and renew these messages over time, strengthening engagement and enriching their relationships.”

A BIG NUMBER

18

That’s the number of questions on a “CEO checklist” that can help leaders set their organizations’ direction, connect with stakeholders, and manage their personal effectiveness, among other priorities. McKinsey’s Kurt Strovink and the authors of CEO Excellence, Carolyn Dewar, Scott Keller, and Vikram Malhotra, crafted the checklist based on insights from more than 70 current and former top executives. The questions include: “Have we created a short list of clearly defined big moves at the enterprise level that will distance us from our competitors?” and “Do I manage my time and energy well, and do I have the right office support in place to help me successfully and sustainably do what only I can do as the CEO?”

A QUOTE

“When handled correctly, vulnerability is a sign of strength. It can be magnetic and powerful.”

That’s McKinsey’s Dana Maor, Hans-Werner Kaas, Kurt Strovink, and Ramesh Srinivasan on how leaders can benefit from being openly vulnerable. In their book The Journey of Leadership: How CEOs Learn to Lead from the Inside Out, the authors note that a lack of trust is the number-one reason teams fail. Their conversations with more than 500 global CEOs revealed that showing vulnerability can help leaders build trust and strengthen relationships, even if it doesn’t come naturally. “We’re not suggesting that leaders abandon their hard-nosed leadership skills—just that they should challenge themselves to balance those attributes with soft leadership skills that are sometimes the most difficult to muster,” the authors say.

A SPOTLIGHT INTERVIEW

Many top executives share the same trait: they never stop learning from people around them, according to former Yum! Brands CEO David Novak. “The most successful people in the world take the insights they get from learning and pair them with action,” he says in a McKinsey Author Talks interview. In his own case, Novak says he learned to become a better listener after a very public failure. As the head of marketing and sales for PepsiCo, he launched a clear soda called Crystal Pepsi despite objections from the company’s bottlers. After a buzzy debut, the product quickly fizzled—and was even satirized on late-night TV. “It was pretty embarrassing,” he says. “Not everybody has their failures air on Saturday Night Live, but I actually feel like the learning that I received was worth it.”

— Edited by Eric Quiñones, senior editor, New York

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