by: Noam Wasserman for Forbes.com
Many founders ride their companies up the value ladder, and then down it. Last week saw the latest example of this phenomenon, as the next dramatic chapter was written in the evolution of Research-in-Motion (RIM), the once world-beating maker of the Blackberry smartphone. Once again, a founder overstayed his welcome and paid a price.
A founder’s early passion, confidence, and attachment to a vision are often the magical ingredients that fuel the launch of a startup rocket ship. Visionary founders are usually the most central, irreplaceable players in a startup. Seen as the guardians …Read more →
In prior posts about my “Founders’ Dilemmas” MBA course, I provided an overview of the course, details about the Introductory case and the cases in the “When to Found” module, details about four cases in the “Building the Team” module, and descriptions of the core new-venture hiring cases.
This post covers the course’s founder-CEO succession cases. The first case (“Founder-CEO Succession at Wily Technology“) examines the antecedents of succession: What are the events and conditions that lead to the founder’s being replaced as CEO? Should the replaced founder be involved in …Read more →
Our recent CompStudy webcast included a chart (originally conceived by Mike DiPierro) that showed a breakdown of founders versus non-founders in each executive position. For instance, in the 240 IT start-ups in this year’s survey, how many have founder-CEOs and how many have non-founding CEOs? Likewise for the other C-level positions and the next level down in the organization.
The chart below shows the mix of founders (dark blue) versus non-founders (white) within C-level positions, separated by whether the company had raised 1 or fewer rounds of financing, 2-3 rounds, or 4 or more rounds. (The bars don’t add …Read more →
Note: Harvard Business Online asked me to provide some reflections on the CEO succession developments at Yahoo this week. Below is an expanded version of what they just posted to their site.
When a board replaces a founder-CEO with a “professional CEO,” the founder-CEO is often “demoted to Chairman” as a way to keep the founder involved with the company. The company issues a press release stating that, “[The replaced CEO] will assume the position of non-executive Chairman and serve as an advisor and important resource for the company’s senior management team, while also working closely with …Read more →
Hope 2007 is off to a great start for everyone!
In the near term, I will be posting the results of analyses that my co-author (Matt Marx) and I have done of the factors affecting the stability of founding teams. Before then, I have 2 items to post that are related to past topics covered in this blog. This one is related to founder-CEO succession, and the next one will be related to boards of directors. (For past postings and relevant papers/cases on each of these topics, see the “Topics Covered in This Blog (So Far)” …Read more →
Earlier this month, Business Week had an item entitled “The Temp in the Corner Office.” It described a “rise” (from 2 in 2004 to 9 last year) in the number of large companies using interim CEOs as a bridge between two “permanent” CEOs. (The most ironic one is Kelly Services, the big temp agency that hired Carl Camden as its own temp CEO. Here’s an example from academia that hit close to home.) The article, citing Leslie Gaines-Ross of Weber Shandwick, stated that these interim CEOs averaged 159 days on the job.
This brought to mind our …Read more →
Is the first non-founding CEO of a venture “doomed to fail”?
On Monday, we debuted my new case on founder-CEO succession at Wily Technology. In class, we discussed the potential problems faced by Dick Williams, Wily’s first non-founding CEO, if founder Lew Cirne were to stay in the company post-succession — e.g., if Lew were to remain unhappy with being replaced, or were to oppose any of the changes Williams wants to make. As it turns out, Lew’s eventual — very positive — attitude about the succession (after getting over his shock at having to step down as …Read more →
With our required MBA course in Entrepreneurial Management under way, I have less time to post research results and related items here. However, here are three quick items I recently accumulated related to the “After the Firing” side of my founder-CEO succession research.
Nike’s Post-Succession Woes
I recently got a call from Daniel Roth, a senior editor at Fortune magazine who is doing a story on Nike’s post-succession problems. In short, a little over a year ago, Phil Knight, the founder of Nike, brought in Bill Perez, the very successful CEO of consumer-goods company S.C. …Read more →
On Wednesday, I gave a keynote address at the Emerging Ventures conference. I also chatted with several founders and venture capitalists, some at lunch Wednesday and some after my address. Three tidbits from those conversations that are relevant to this blog:
- Succeeding at Founder-CEO succession? – A central issue in the “After the Firing” project and in my “Wily” case (which I explored for several minutes during the address) is whether the (replaced) founder stays in the company post-succession, and if so, whether the founder’s presence will be beneficial (e.g., if the founder willingly takes another executive role) or
…Read more →