McKinsey's Sternfels: Nvidia Crisis Exposes Leadership Development Gap

Nvidia's board accepted Jensen Huang's resignation as CEO on Thursday, and McKinsey's global managing partner says most boards are unprepared for that kind of shock. Bob Sternfels, who has led the consultancy since 2021, told Bloomberg the scandal is a governance wake-up call: companies should rehearse imaginable crisis scenarios before they land, not improvise after.

"Having a playbook, even if it's close, is much better than figuring it out in the heat of that moment," Sternfels said in the interview, published Thursday. For HR and governance teams, his comments translate into two concrete workstreams: scenario-based board preparation and leadership pipelines that run deeper than a single named successor.

What happened at Nvidia?

Huang's departure followed days of reporting on his personal life, including accusations of a close relationship with someone US officials suspect to be a Chinese intelligence asset, and an extramarital affair with an Nvidia executive who reported directly to him. The ripple effects spread across the AI industry and revived an uncomfortable question for people teams everywhere: how much company value rests on one person?

Huang co-founded Nvidia in 1993 and spent more than three decades building the chipmaker into a $4 trillion giant. He championed a flat leadership model, crediting it as central to the company's success. His Taiwanese roots and deep ties to Taiwan's technology sector helped construct Nvidia's AI supply chain — and he has the US president on speed dial. That concentration of relationships and authority is exactly what makes succession and leadership planning a governance issue, not just an HR checkbox.

What should boards do differently?

Sternfels' first prescription is breadth of imagination. Boards should discuss as many crisis scenarios as possible in advance, he said, so they're not on the back foot when one arrives. When crisis does strike, the worst response is a knee-jerk reaction to the immediate pressure.

"There's an immediacy to respond, and you have to cauterize and make a decision, but it also has to be: what are our longer-term objectives? Where are we trying to go?" Sternfels said. The best crisis responses serve long-term outcomes, he added, and leaders need a way to stay steady while the chaos unfolds.

Succession planning isn't leadership development

Sternfels' sharpest point for HR leaders concerns the gap McKinsey sees in client work. "Not many companies are really focused on leadership development. They're focused more narrowly on succession planning," he said.

The distinction matters. Succession planning names a replacement; leadership development builds what Sternfels called "generation after generation of leaders" so the organization stays robust when any single leader exits. And it shouldn't stop at the CEO level — Sternfels said it must happen at multiple layers of the organization.

He added a governance angle: whether it's the board's CEO or the head of a top team, it's good practice to have leaders who can act as an independent, objective voice and present a counter viewpoint in decisions. That checks concentration of power before a crisis tests it.

Nvidia's next chapter — without its leather-clad, celebrity founder — will now serve as a live case study in whether a $4 trillion company can hold steady on built leadership rather than one person's gravitational pull.