The list of CEOs who took the reins of large U.S. companies at the dawn of the COVID pandemic or soon after it started in 2020 reads like a Who’s Who of corporate America: the chiefs of Nike, eBay, Abbott Labs, United Airlines, and Lockheed Martin are among the CEO class of 2020, a group of new chiefs who were tested in the first years of their tenures unlike few of their peers ever had been.
Learning a new job is a big challenge in the best of times, from getting to know the culture of a company and where the bones are buried, to the ins and outs of the business. But some 74 CEOs appointed at Fortune 1000 companies in calendar year 2020 had to also deal with bonkers supply chain disruption and plunging revenue, notably for airline and hotel businesses. They also had to contend with workforce concerns—whether employees were suddenly working from home, or, for those having to serve the public, responding to often abusive customers.
The urgency of COVID has long since passed, but many of the chops CEOs acquired during that unprecedented crisis still serve them well and have changed what recruiters and boards look for in leaders. And for good reason: these skills have helped these CEOs on the whole outperform the stock market. Fortune compared the performance of the more than 60 companies with a CEO change in 2020 and found that the companies where those CEOs were still in place had a return of 55% between Jan. 1, 2020 and Dec. 6 of this year, compared to 50% for the S&P 500. (Some companies in the group were already or went private during that period.)
Exactly what might account for the difference? The answer naturally varies by company and sector; however, the CEOs, advisors, and academics who answered this question for Fortune consistently returned to a few themes. Here’s what they observed.
They make it a team effort with employees
Good leaders know that diva outbursts are never helpful, and they’re even less so during a big crisis. The “father-knows-best” approach of the CEOs of yore when chiefs dictated all the shots has proven even less effective in leading. Good leadership knows when to defer to those who do know best.
Take Coach and Kate Spade owner Tapestry. CEO Joanne Crevoiserat had to navigate the abrupt departure of her predecessor, the second CEO exit in as many years, as interim chief in the summer of 2020 when the fashion company was trying to reinvigorate its Kate Spade brand and protect its Coach brand’s comeback. Crevoiserat moved quickly on a turnaround plan she had already been working on as CFO to make the company less reliant on stores for selling and marketing to customers, something the closings of its stores for weeks in the spring of 2020 made abundantly clear. To do that, Tapestry let people closer to the front lines at the brand level call more shots. “We had incredibly talented teams that we had to empower and enable to make decisions to innovate and that was happening so fast through COVID,” Crevoiserat told Fortune in October.
Over at Coty, the beauty company behind Kylie Jenner’s brands and Cover Girl, Sue Nabi came in after it went through five CEOs in five years, none of whom came from the beauty industry, making the rank-and-file question the company's raison d’être. While Nabi is very involved in product development and marketing, she made clear that Coty would tap its people’s expertise in beauty more fully. “I explained how passionate I am about beauty. The feedback was incredible because this was the first time the CEO spoke to them not about the P&L, what we need to do next week, next quarter, and so on, but about a vision, a passion, and how intuition is essential in our business,” Nabi told Fortune in October.
They move fast
One of CEOs’ favorite clichés to trot out is that turmoil can create a big opportunity to improve. The urgency of the pandemic led many companies to test that adage out. That often meant speeding up initiatives that had previously been wending their way slowly through a corporation’s bureaucracy.
At UPS, for example, during the height of the pandemic, the newly minted CEO Carol Tomé recognized that the company wasn’t getting deliveries to its small and medium-sized business clients as quickly as its competitors. “We had launched an initiative to tackle that problem, but we weren’t planning to complete it until June 2021,” Tomé previously told Fortune. In the spring of 2020, just after she was hired, Tomé asked her team what was getting in the way of moving on that speed-of-delivery goal immediately and learned the problem was funding. “We’ve got money, let’s accelerate it,” she responded. The company completed that project in six months instead of 18 and saw market share increases for several subsequent quarters.
Meanwhile Clorox had the opposite challenge, when its wipes became the must-have item for U.S. consumers and sent sales growth to nearly unmanageable levels. “We have historically been a company very good at managing a very steady growth rate, and then managing through those smaller cyclical periods. And what we need to get better at is managing through volatility,” Clorox CEO Linda Rendle told Fortune in 2022. Now of course, she’s dealing with a crisis of another sort: a cyber attack in summer led to double-digit plunges in sales after it tripped up Clorox’ manufacturing.
They can solve nitty-gritty problems and take a long-term view
While some CEOs are shrewd long-term thinkers and others excel in the heat of the day-to-day, successful pandemic-class CEOs made their mark by deftly switching between both modes. “They were able to zoom back and forth between the 50,000-foot level and the 200-foot level,” says David Reimer, CEO and founder of The ExCo Group, an executive search firm. “They got involved in a level of detail and running the company that most of them thought they probably left behind years earlier,” he adds.
Bill McDermott remembers the day he had to adjust his field of vision, shortly after he became CEO of the enterprise software maker ServiceNow. “We had a blue-sky-thinking meeting in 2020 to talk about what we were going to be when we grew up,” he told Fortune. “I walked into a boardroom to talk with my leaders, and I'm like, ‘Guys, look, if we don't solve for COVID, we'll never be a great company. We'll never be a great brand. So let's just kill all the slides.’”
Within a week, ServiceNow had produced a guide to returning to work safely and made it widely available to businesses and the public sector. “We got the entire engineering machine, the entire go-to-market machine, focused only on that,” McDermott says, “and that made us a sensation.”
They manage multiple stakeholders
In theory, stakeholder capitalism was a creditable concept by the spring of 2020; in practice, it was “dismissible,” says ExCo Group’s Reimer. But just as nobody saw the pandemic coming, he tells Fortune, nobody could imagine “the degree to which stakeholder capitalism would just overwhelm the office of the CEO.”
With COVID bringing illness, grief, and immeasurable stress into employees’ lives, CEOs received a crash course on the necessity of putting shareholder supremacy aside and leading with what some academics call an “ethics of care” philosophy. The most admired world and business leaders took a human and employee-centered approach to their policies, David McGuire, a professor of human resources management at Edinburgh Napier University and co-author of Leadership in a Post-Covid Pandemic World, explains. In the pandemic’s wake, CEOs now talk about stewardship and servant leadership, he adds, “and the whole idea of stewardship and being a servant is you're sometimes putting other people first.”
Paul Knopp, CEO of KPMG US, was among those first-time chief executives who saw employees leap to the top of his priorities list at the beginning of his stint in 2020. The KPMG insider—he had spent 36 years at the firm—officially took control in July of that year. “I certainly understood the gravity of the moment and what I was taking on,” he told Fortune. Demonstrating empathy for employees’ experiences in a time of uncertainty was paramount, particularly following the racial reckoning that erupted in the aftermath of George Floyd’s murder. The new CEO decided that improving diversity in KPMG’s top ranks would be his leadership team’s legacy issue and his first order of business. After consulting with underrepresented employees at the firm, his team spent a month working intensely to create a program to make that happen. At KPMG, underrepresented groups now make up 46.8% of partners and managing directors, up from 39.3% in 2020 when Knopp took over, according to a company spokesperson.
They work collaboratively with their C-Suite
During the early months of the pandemic, geopolitical dynamics and the global economic outlook became unpredictable. The CEOs who took over then inherited a world that looked nothing like the one they grew up with, says Reimer, and the wisest leaders recognized that “there's no one person in any organization of any size” who could manage the world’s new complexity.
“People who came in feeling like the job of the CEO is to provide answers got in real trouble fairly quickly,” says Reimer.
Boards came to the same realization, he adds, and many companies abandoned their original successor candidates, skipping names of some rising stars on their lists to find those executives who would lead like player-coaches, not autocrats.
The best pandemic-class CEOs are the opposite of micromanagers, says Tierney Remick, co-leader of Korn Ferry's global board and CEO practice. Instead, they empower their teams, setting a new standard for their C-Suite colleagues. “CEOs who have been very effective in the last several years have made sure that everybody on the C-Suite team was thinking of the enterprise end to end,” she says. Rather than focus solely on their personal departments or lines of business, Remmick adds, senior leaders were encouraged to think: “We're all linked and we all need to lean in together.”
Three years out since the pandemic’s beginning, one thing that is clear is that the presence of crises is not going away, and CEOs have to adjust their style accordingly, says Jason Baumgarten, head of executive search firm Spencer Stuart’s global CEO and boards practice. “You have to have a more agile style of leadership that isn’t just about making a decision quickly,” he suggests. “It’s about knowing how you set up the organization and what permissions you give for decision-making further from the center.”
