Aleksandar Savic
Many investors rely on Morningstar for independent financial analysis and insights, but few people are familiar with the company behind the ratings. From Morningstar’s origins rating mutual funds, the company has expanded its product line, customer base, and global footprint and realized a tenfold increase in revenues and profits between 2005 and 2025.
Morningstar’s culture, CEO Kunal Kapoor said, “has been one of the ingredients that has allowed us to be successful, and I think will continue to allow us to be successful.” We analyzed how 32,000 employees at 15 financial data companies described their employers in Glassdoor reviews. Morningstar employees spoke about corporate culture more frequently and more positively than their counterparts at peer companies and were particularly positive about how the organization lives its core values.
“Execution is everything” is one of those values. In a recent podcast, Kapoor shared three principles that help Morningstar maintain its focus on relentless execution.
1. Decentralize decision-making to instill a sense of ownership.
As companies grow, employees often lose the sense of ownership that drove early success. Morningstar fights this tendency by pushing accountability down to business units. “We’re a very decentralized organization,” Kapoor explained. “And part of the inspiration for being decentralized is to make sure that people own the outcomes that they’re charged with driving.”
Morningstar structures its compensation and organizational design to reinforce that ownership at the business unit level. “We allow a large percentage of how bonus plans are set to be driven by the performance of our business units … even though there’s a companywide factor as well,” Kapoor noted. “We’ve also really tried to push a lot of our central services into the business units. … We keep trying to push whatever we can into the business units so that the accountability is at that level.”
2. Use transparent objectives and key results to enable difficult discussions.
Many organizations struggle to surface and discuss problems early enough to nip them in the bud. “People’s natural inclination is to rush to you with good news and try not to talk about the bad news,” Kapoor observed. “OKRs are really helpful in this context. Because there’s transparency into what’s happening across the organization, it becomes a very tangible way to see why some things are not hitting in the way that they might. … We use them to look at some of our up-and-coming initiatives and see if they’re tracking or not.”
This transparency creates the space to have conversations about what’s not working early enough to course-correct — and is especially valuable for experiments with new initiatives. “Within any organization, you always want to be planting a few seeds,” Kapoor said. “But some of them are going to grow into weeds, and it’s fine to pull them out very quickly because you only want to be watering a few onto the next stage. … If there’s not a system of candor, a system of key results to evaluate initiatives, it becomes problematic. Being less subjective is important and allows you to kind of make those types of decisions.”
Transparent OKRs also provide a framework for disciplined and productive feedback discussions. “Nobody likes tough feedback,” Kapoor said, but “they will come back and thank you at some point, as long as the feedback was actionable and fair.” He structures check-ins with his team around their OKRs: “Here’s what you signed up for. Let’s go through and see where you are tracking to them, and let’s talk about what you want to do in the second half of the year.” The key, Kapoor said, is being “very disciplined around just repeating ourselves and following through on OKRs and, as a leader, talking about them publicly.”
3. Instill urgency and set ambitious goals.
Successful execution requires the urgency and speed to seize fleeting opportunities faster than competitors; complacency is the mortal enemy of urgency. “I don’t walk into any meeting today where I’m not pushing people to get things done faster than they think they’re going to get them done,” Kapoor said. “Otherwise, they start to think that they have infinite timelines and infinite resources just because we’re bigger. … The shorter the timeline, the more motivated people are to go get after things.” As leaders, Kapoor said, “our mandate is to challenge and get the business units moving and to ensure that they are not being complacent.”
Setting ambitious goals is a powerful way to fight complacency, but many organizations struggle to set goals that are ambitious yet achievable. Kapoor explained Morningstar’s approach: “You want to have ambition in your long-term plans, and you want to set those in a way that feels difficult. … Every quarter is a step toward achieving that three-year plan. You need to be realistic as to what needs to get done in a quarter, and you need to be super ambitious in the three-year plan.”
Kapoor cautioned against punishing people for missing ambitious targets, because it could discourage people from setting stretch goals in the future. “It’s important not to penalize people when they are overly ambitious and they don’t get to an outcome,” he said. “The key thing then is to have an honest reflection on why something wasn’t achieved.”
Want to hear more advice from Kapoor? Watch this conversation and the entire series on the CultureX YouTube channel, on Spotify, or on Apple Podcasts.