For the CEO
A message from our editor on this critical topic.
What’s at Stake
In periods of heightened uncertainty and disruption, CEOs might tend to avoid risk. But being too cautious comes with its own hazards. It can lead companies to miss out on opportunities to expand market share, enhance the brand, or drive innovation as consequences compound. CEOs must evolve from worrying excessively about possible setbacks to considering the genuine peril of inaction. Risk is a two-sided coin. It is also a major source of advantage.
What the Numbers Say
BCG research underscores this point vividly. A BCG study assessing the tenures of 7,000 CEOs worldwide found that those who initiated transformations within the first two years delivered higher total shareholder returns than those who started later. A separate survey of 70 former CEOs and senior executives found that more than half cited moving too slowly among their biggest regrets.
The inclination to delay, often perceived as prudent, was later recognized as costly. To succeed, CEOs need to balance operational caution with strategic boldness. This dual mindset—part operator, part visionary investor—is essential in transforming short-term uncertainties into long-term strategic advantages.
Leadership by Design: Navigate the complexities of today’s leadership and management environment.
Betting Bold
By embracing calculated risks, leveraging external insights, and continuously challenging ingrained biases, CEOs can seize critical opportunities today. They can secure their organization’s competitive future by building an uncertainty advantage in volatile times.Here’s how:
Quantify Upside and the Cost of Inaction. In volatile environments, caution doesn’t guarantee safety. It belies hidden exposure. Deciding not to move is an implicit bet with often significant, invisible costs. But companies often focus more on the downside—rather than the potential upside—of market disruptions. Some 80% of senior leaders surveyed by BCG in 2024 said they viewed risk in a mainly negative or neutral light. The result? Many CEOs may be missing out on opportunities that come with being a first mover or early adopter.
The strongest CEOs demand equal attention to bold “what-if” possibilities. They ask questions such as “What if our strategy delivers better-than-expected results?” and “If this works spectacularly and we had hesitated, what actions would we regret not taking now?”
- Potential First Step: CEOs can task their team with quantifying both sides of the risk equation to account for the cost of inaction. This contingency-planning process can include negative impacts on market share, brand momentum, talent retention, or long-term value. The analysis should be grounded in solid financial metrics—the business’s P&L and total shareholder return. The analysis should include multiple scenarios for when the company would scale the new initiative. Such scenarios can reveal how even slight delays degrade value and how early, decisive action compounds advantages.
Balance the Operator and Investor Hats. Operational excellence can’t sustain value on its own. CEOs must actively build future-ready businesses by making bold capital allocation decisions, strategic investments, and shaping compelling long-term growth narratives. Nevertheless, research in 2023 revealed that caution, rather than bold action, is becoming the norm. Analysis from BCG’s capital allocation database—covering over 10,000 listed firms—showed a 10% decline in capex relative to revenues over the past decade. This conservatism comes despite more than 70% of US and European investors (and 80% among US investors exclusively) supporting companies making investments in innovation and market strategies, even at the expense of short-term margins.
How can CEOs effectively balance their operational duties with a forward-looking, investor-oriented view? A critical step is dedicating deliberate, uninterrupted time for big-picture reflection. These periods should come with no interruptions, no slides. Just expansive, future-focused questions like “What bold moves would my successor immediately make?” Such conversations rarely happen without intentional space. It’s equally important for CEOs to communicate openly with their executive teams about balancing immediate operations with long-term strategy—reinforcing the need to look ahead, not just around.
- Potential First Step: CEOs can examine their calendar over the past 60 days. How much time was devoted to immediate operational demands versus opportunities that are three years ahead? The calendar test will reveal which “hat” dominates. If leaders find themselves busy yet lacking clarity, it's likely the operator role is overshadowing the investor responsibilities. The goal should be to block out the equivalent of one to two days per month for broader reflection. This time, which can be spread over the course of the month, should be free from operational distractions and used to reassess core assumptions, explore new strategic scenarios, and identify opportunities with fresh eyes.
Get Out of the Echo Chamber. CEOs can build conviction for bold moves by intentionally tapping into diverse viewpoints, both within their teams and across broader professional networks.
Internally, leaders should actively seek candid insights from frontline employees—retail teams, operational heads, and junior engineers. They can also draw insight from internal skeptics, individuals whose incentives aren't aligned with moving ahead with new initiatives. Soliciting challenging critiques from these employees is critical for pressure testing ideas. They might also ask themselves, “What would Apple do? Or Unilever? Or an organization without fear or constraints?” That train of thought can help CEOs draw inspiration from other models of success.
Executives shouldn’t hesitate to look beyond their organizations. They can engage with peers in noncompetitive industries, analog sectors, and markets further along the innovation curve. Connecting with savvy investors on risk tolerance and capital allocation priorities can be a further way of testing assumptions. Viewing new opportunities and initiatives through an external lens can be a game changer. BCG research reveals that companies that consistently look beyond their immediate environments—examining industry trends, geopolitical factors, macroeconomic shifts, and sustainability developments—achieve a 5 percentage-point higher success rate in growth transformations compared to inward-looking firms.
- Potential First Step: CEOs can schedule quarterly “outside-world” reviews and establish diverse advisory panels comprising experts from different sectors, geographies, and industries. Tapping into external expertise on a regular basis ensures that leadership maintains a clear-eyed view of emerging trends and competitive shifts. At the same time, arranging rotating executive field visits can ground strategic discussions in observations and frontline experiences. One CEO described a goal of spending a full day per week connecting with employees and partners, both within headquarters and across facilities in the field, to “get a pulse on what I don’t know and what the organization doesn’t want to tell me.“ Among the questions asked: “What is the single largest pain point for doing your job?” and “If the leadership team could help resolve one friction or issue, what should it be?”
Check Bias, Blind Spots, and Boldness. Self-awareness is one of a CEO’s most powerful tools—but it requires intentional effort. Leaders must routinely audit their decision-making processes for biases and blind spots. A valuable starting point is asking tough questions like “Am I dismissing this idea simply because it hasn't been done before?” Often, what appears as necessary caution is actually fear, or inertia in disguise. Being bold begins with recognizing and confronting what's genuinely holding a decision back.
At the same time, while CEOs must trust their intuition, they need to cross-check their views. They shouldn’t bet big without inviting constructive dissent. The bigger the vision, the more critical it is to seek out—and thoughtfully consider—alternative viewpoints. Boards can be especially effective in reducing biases. Research published in the Academy of Management in 2024 suggests that the board plays an effective role in company decision making when it “reduces the overall influence of cognitive, personal, and group biases on a given decision.”
CEOs can cultivate a culture of strategic risk taking by testing and refining bold ideas through learning loops and pilot programs. Establishing smart partnerships can further strengthen new ideas, enhancing value propositions while managing risk effectively.
- Potential First Step: CEOs can conduct a series of exercises to identify their own biases and blind spots. One option: imagine being an infinitely funded startup intent on disrupting your actual business—what weaknesses would you target first? Exploring this type of scenario can reveal hidden vulnerabilities and outdated assumptions. For example, it can help leaders identify the dogmatic beliefs and rigid practices that no longer serve their organization, empowering them to break the boxes they've inadvertently built around their thinking. At the same time, it’s valuable to push beyond identifying vulnerabilities and consider execution. How would you actually put your vision into action? What concrete steps would it take? How flexible could your business be if a pivot were required? Would your strategy still hold if outcomes turned out differently than expected?
A Parting Thought
Ensuring a smart, balanced approach to risk doesn't end at the C-suite. CEOs must actively nurture an organizational culture that views risk not just as something to control but also as a key driver of growth. Build an environment in which teams consistently challenge assumptions, experiment with new ideas, and openly explore areas ripe for innovation.
To achieve this, clearly articulate the importance of taking calculated risks, reinforcing that experimentation and initiative are not just tolerated but expected and rewarded. Leadership must visibly support this mindset by recognizing effort and innovation as much as successful outcomes and offering resources and training that empower employees to explore confidently. Embedding this proactive approach into daily operations transforms traditional risk management into a strategic advantage. Organizations that actively cultivate a culture of curiosity and courage are better equipped to seize the day.
