When Jensen Huang cofounded NVIDIA, in 1993, he focused on a single niche: building powerful computer chips to create graphics for fast-moving video games. As the company went public in 1999 and grew through the 2000s, video games remained its growth engine—but even back then, Huang, a Taiwanese immigrant who studied electrical engineering at Oregon State and Stanford, could see a different path forward. Data scientists were beginning to ask computers to perform much more sophisticated calculations more quickly, so NVIDIA began spending billions of dollars on R&D to create chips that would support artificial intelligence applications. By the mid-2010s its AI-focused chips had come to dominate this nascent market, showing up inside autonomous vehicles, robots, drone aircraft, and dozens of other high-tech tools. One look at NVIDIA’s stock chart shows how this bet has paid off: From late 2015 to late 2018, the company’s stock grew 14-fold—a performance that puts Huang, 56, in the top spot on HBR’s list of best-performing CEOs in the world this year.
The Best-Performing CEOs in the World, 2019
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Unlike rankings that are based on subjective evaluations or short-term metrics, HBR’s list relies on objective performance measures over a chief executive’s entire tenure—and these “career numbers” tend to hold steady. It’s no surprise, then, that 65 of last year’s CEOs reappear this year.
They do so despite a change in our methodology, made to reflect the fact that a rapidly growing number of funds and individuals now focus on far more than bottom-line metrics when they make investment decisions: For the past four years we’ve weighted environmental, social, and governance (ESG) scores to account for 20% of each CEO’s final ranking. This year we increased that share to 30%.
The CEO Life Cycle
How long should a CEO remain in the job? Executives and board members have ideas about this, but they are based on anecdotes, assumptions, and rules of thumb. To get beyond the conventional wisdom, researchers at the recruiting firm Spencer Stuart conducted a study on how CEOs typically perform over their tenure. They found a common pattern of ups and downs, which they’ve divided into five distinct periods. This framework should enable CEOs and boards to communicate more candidly. It may also keep directors from jettisoning a solid CEO during a temporary and predictable period of underperformance or tolerating mediocre performance for longer than they should.
The CEO’s Guide to Retirement
Some CEOs remain in the role too long, hurting investors, employees, and their own legacy. The author sees a frequent reason for that: CEOs don’t know how to identify the optimal time to retire, and they procrastinate because they can’t imagine what they will do after they leave the job. In this article he presents questions that chief executives can ask themselves to determine the right time for an exit; a step-by-step process for stepping down; and an overview of the options a former CEO may find fulfilling.
The complete Spotlight package is available in a single reprint.
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