Carolyn Dewar founded McKinsey’s CEO practice. She has spent years advising the world’s top executives. On June 9, her latest commentary in Fortune landed with force. Operational excellence, she argues, has become a liability.
The question she puts to boards and executive teams cuts straight to the point. “If we were building this business today, where would we choose to compete, and how would we win?”
Simple on the surface. Brutal in practice. For the past decade markets cheered companies that executed flawlessly. They digitized operations. They built resilience. They scaled what already worked. Those efforts delivered real value. Yet the ground has moved.
Geopolitical fragmentation. Fresh industrial policies. Infrastructure bottlenecks. And the rapid advance of artificial intelligence. These forces hit simultaneously. They reshape entire value pools faster than most leadership teams can track. Investors now reprice competitive advantage ahead of the companies themselves.
Dewar’s central warning is stark. You cannot OKR your way out of this moment. Execution still counts. No one disputes that. But it no longer suffices when the assumptions baked into yesterday’s business model no longer hold.
Many senior leaders rose through ranks that prized operational discipline above all. Fewer learned to question the foundational beliefs that once drove success. The result shows up as a widespread blind spot. Companies cling to inherited advantages that may soon erode.
Leaders who perform best return to first principles. They examine which customer problems their organization alone can solve. They hunt for friction points that technology can suddenly erase. They ask what they would construct from scratch with today’s tools. And they assign their strongest operators to these inquiries rather than treat them as optional side work.
The day-to-day business can largely run itself in the short term. Senior teams must lift their gaze. They need to confront the future together. Especially when answers remain uncertain and implications feel uncomfortable. Judgment. Imagination. Strategic courage under uncertainty. These human traits, Dewar writes, suddenly matter again.
McKinsey’s own broader research reinforces her view. Its State of Organizations 2026 report, drawn from more than 10,000 leaders across 16 countries and 17 industries, identifies three tectonic forces: accelerating AI and digital technologies, geopolitical and economic fragmentation, and shifting workforce expectations. (McKinsey)
One finding stands out. Eighty-six percent of leaders say their organizations are unprepared to adopt AI in daily operations. Only 14 percent report consistent leadership sponsorship for that adoption. The gap is glaring.
Kurt Strovink, a McKinsey senior partner who leads global CEO services, echoed similar themes in April. In 2026 AI sits at the top of every CEO’s agenda. It demands near-constant strategy updates across talent, capital expenditure, and business models. Modern CEOs, already proficient in finance and operations, must now develop geopolitical fluency as well. (Business Insider)
A separate McKinsey report from late 2025 laid out five imperatives for CEOs facing geopolitical uncertainty: build foresight, strengthen resilience, apply AI thoughtfully, turn regulatory change into advantage, and foster adaptability. (McKinsey)
Recent discussions at Davos and CES 2026 show these issues have only intensified. McKinsey Global Managing Partner Bob Sternfels appeared onstage with General Catalyst’s Hemant Taneja. They explored how AI moves beyond experimentation into execution across semiconductors, mobility, and robotics. The conversation underscored one reality. Competitive advantage now hinges on integrating technology with strategy at speed.
Traditional planning cycles look obsolete. Annual offsites and three-year roadmaps cannot match the pace of simultaneous shifts across technology, policy, and global supply chains. The best leaders treat strategy as continuous debate. They pressure-test assumptions weekly. They revisit where value migrates. They make big calls before the picture clarifies fully. Waiting for certainty has become its own risk.
Hardest of all are the portfolio decisions. Clean-sheet thinking. Founder-style vision. Reallocating capital, talent, and attention away from once-successful units that may no longer compound. These moves feel painful because they require muscles different from the execution focus rewarded in the prior era.
McKinsey’s work on U.S. competitiveness highlights the collision of AI, geopolitics, and demographics. Leaders rethink investment priorities and competitive posture. What they decide in the next 12 to 24 months will shape the next decade. Recent McKinsey Global Institute analysis points to potential economic gains from full AI adoption reaching $2.9 trillion. Yet realizing that value demands shared C-suite ownership, flexible technology platforms, and reimagined workflows.
Organizations that treat AI as a collective priority rather than a technology project move faster. Chief technology officers often accelerate adoption more effectively than CEOs acting alone. The message is consistent across reports: rewire the operating model or fall behind.
Executives at tonies, the German audio brand for children, illustrate one practical approach. They created a dedicated chief information officer role focused on AI. The company explores process improvements cautiously while maintaining workforce curiosity. Small moves. Deliberate pace. Still forward motion.
Across industries the pattern repeats. Strategy is no longer a staff function or occasional retreat. It belongs at the center of the CEO agenda. Boards expect it. Investors reward it when executed with conviction. Employees follow when direction feels authentic.
Dewar’s piece ends on a human note. The capabilities that matter most cannot be fully automated. They live in the ability to imagine new futures, exercise sound judgment amid ambiguity, and display courage when stakes are high. Those traits define the next generation of standout leaders.
CEOs who grasp this shift early gain an edge. They move resources toward emerging value pools. They challenge legacy assumptions before markets force their hand. They build organizations capable of continuous adaptation rather than periodic resets.
The alternative is clear. Double down on operational excellence alone. Watch competitors or new entrants rewrite the rules. And discover too late that yesterday’s strengths have become tomorrow’s anchors.
Markets are already signaling the change. Value pools move faster. Investor expectations evolve quicker. The leaders who succeed will combine operational rigor with renewed strategic imagination. Both matter. One no longer substitutes for the other.
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