I founded McKinsey’s CEO practice: Here’s why operational excellence is a liability right now

A foundational question is confronting executive teams, boardrooms, and investors across industries: “If we were building this business today, where would we choose to compete, and how would we win?” For many leadership teams, wrestling with a question this fundamental requires exercising long-dormant strategic muscles that have not been used at full strength in years. For the last decade, markets rewarded companies for extraordinary execution: operational rigor, resilience, digitization, and scaling proven models consistently. In many cases, this operational discipline created enormous value. The challenge now is that the environment has shifted rapidly, and is now demanding new leadership capabilities faster than teams can adapt. Geopolitical fragmentation, industrial policy, infrastructure constraints, and AI are all reshaping markets at the same time. While many senior leaders came of age in this era focused on operating the current business, fewer have been trained to challenge the beliefs underneath it — or to use creativity and bold thinking to rethink what their companies could become. Which business models remain defensible and structurally advantaged as technology and economics shift simultaneously? Where will value actually accrue in this new world? What capabilities or positions could suddenly become far more valuable? What inherited assumptions are we still defending simply because they made us successful in the last era? These strategic questions are becoming harder to avoid because market dynamics that once felt relatively stable are now shifting simultaneously across multiple dimensions. In many sectors, value pools are moving faster than leadership teams are accustomed to navigating. In some industries, investors are already repricing future advantage faster than leadership teams are reassessing the foundations underneath their own business models. Execution discipline still matters enormously. But you cannot OKR your way out of a moment