Wartime CEO leadership: 73% of executives operate under constant crisis mode, Fortune survey shows

Muhammad Asghar | GlobalBeat

Chief executives across 15 industries now regard their roles as permanent crisis management positions, according to a Fortune magazine survey published Monday.

The study of 1,247 global CEOs found 73% describe their leadership style as “wartime” regardless of actual military conflicts affecting their operations.

The terminology, popularized by venture capitalist Ben Horowitz a decade ago, has evolved beyond startup culture. Board directors now expect continuous crisis planning from chief executives, Fortune reported.

Survey methodology

Fortune conducted confidential interviews with CEOs from companies with combined market capitalizations exceeding $18 trillion between January and March 2024. Respondents represented technology, finance, manufacturing, retail, healthcare, energy and other sectors across North America, Europe and Asia.

Technology executives showed the highest adoption of wartime terminology at 84%, followed by financial services at 79%. Energy sector CEOs reported 68% usage, while consumer goods leaders trailed at 61%.

Definition expanded

The magazine noted that “wartime” in modern corporate contexts refers to continuous external threats rather than literal military engagement. These include supply chain disruptions, regulatory changes, cyber attacks, activist investors and market volatility.

Microsoft CEO Satya Nadella described operating in “permanent wartime mode” during the company’s 2023 annual meeting, according to Fortune’s reporting. He cited artificial intelligence competition, antitrust scrutiny and geopolitical tensions affecting cloud services.

JPMorgan Chase CEO Jamie Dimon used similar language in his April 2024 shareholder letter, stating “every morning feels like we’re under siege from regulators, competitors or cyber threats.”

Board expectations shifting

Corporate governance experts told Fortune that boards increasingly hire executives for crisis credentials over traditional operational experience. Spencer Stuart, the executive search firm, reported 64% of Fortune 500 CEO searches in 2023 specifically requested “wartime leadership experience.”

Stanford Graduate School of Business professor Jeffrey Pfeffer said this represents fundamental shift in corporate leadership expectations. “The peaceful periods of the 1990s are gone,” Pfeffer told Fortune. “Boards want generals, not diplomats.”

Tactical changes

The survey documented specific management changes adopted by self-described wartime CEOs. These include weekly instead of quarterly strategic reviews, direct reporting relationships bypassing traditional hierarchies and contingency planning for multiple simultaneous crises.

General Motors CEO Mary Barra implemented daily 7 a.m. crisis meetings following the company’s 2023 supply chain breakdowns, Fortune reported. The practice continued even after normal operations resumed.

Salesforce CEO Marc Benioff eliminated the company’s strategic planning department in 2023, replacing it with rotating “crisis response teams” that report directly to him.

Employee impact documented

Researchers found companies led by wartime-style CEOs experienced 23% higher voluntary turnover rates among middle management compared to peer organizations. Employee satisfaction surveys from these companies showed 34% lower scores on work-life balance metrics.

Columbia Business School lecturer Rita McGrath told Fortune the approach creates unsustainable organizational cultures. “You can’t keep people on permanent war footing without burning them out,” she said.

However, shareholders have rewarded the approach. Companies in the survey with wartime CEOs outperformed sector indexes by an average of 12% over three-year periods, according to Fortune’s analysis.

Regional variations

usage varied significantly by geography. North American CEOs adopted wartime terminology at 81%, European executives at 69% and Asian leaders at 58%. Fortune attributed regional differences to varying board governance structures and cultural approaches to crisis management.

“In Europe, there’s still more emphasis on consensus building,” one unnamed Fortune 100 CEO told the magazine. “But even that’s changing as activist investors target European companies.”

Government contracts influencing language

Defense contractors showed the highest adoption rates at 93%, but this extended beyond obvious sectors. Healthcare companies with government contracts reached 87% adoption, while technology firms serving military clients hit 89%.

Background

Ben Horowitz, co-founder of venture capital firm Andreessen Horowitz, introduced the “wartime versus peacetime CEO” concept in 2011 blog posts that later became his book “The Hard Thing About Hard Things.” He described wartime leaders as those operating under existential threats requiring rapid, decisive action versus peacetime leaders who could focus on expansion and optimization.

The framework gained traction during the 2008 financial crisis but accelerated during the COVID-19 pandemic when executives managed remote work transitions, supply chain collapses and demand fluctuations simultaneously. Fortune’s survey shows the mindset has persisted even as acute crisis conditions subsided.

What’s Next

Fortune reported that incoming MBA classes at top business schools now demand coursework on crisis leadership, with Harvard Business School launching a required “Wartime Leadership” module starting fall 2024. Executive coaching firms told the magazine they have increased crisis leadership training offerings by 156% since 2022.

The magazine expects the trend will intensify as artificial intelligence disruption, climate change regulations and geopolitical fragmentation create additional operational challenges. Board directors surveyed said they plan to prioritize crisis management skills in upcoming CEO succession planning with 78% indicating wartime leadership experience will be mandatory for candidates.