Tomorrow's Business Today
The curse of the Superstar CEO
Yesterday we wrote in praise of Anita Roddick, and said it is a pity the person best qualified to save The Body Shop is no longer with us.
Someone asked: which firms have leaders so closely associated with their business that you can’t imagine the company without that person.
Here’s a quick list about which to argue:
Sir Tim Martin – Wetherspoons
Elon Musk – Tesla
Warren Buffett – Berkshire Hathaway
Peter Stringfellow – Stringfelllows
Michael O’Leary – Ryanair
Bill Gates – Microsoft
Jonathan Harmsworth, DMGT (a controversial selection, disputed by judges, since he is the 4th Viscount Rothermere who inherited, rather than built, an empire).
Rupert Murdoch, NewsCorp (some similar, smaller, objections)
Simon English, Tomorrow’s Business
What about firms that would still have existed, but would not have been remotely the same?
James Hanson, Hanson
Albert Weinstock, GEC
Steve Jobs, Apple
And some firms that did just fine after the supposedly vital CEO/founder moved on:
Mike Turner, BAE Systems
Sir Richard Sykes, Glaxo
Stelios Haji-Ioannou, Easyjet
There are some businesses, of course that are entirely linked to their founder, but not in a good way.
Gerald Ratner of Ratners Group and Neil Woodford of Woodford Investment Management are two that spring to mind.
In general, I think we have moved past the notion that charismatic leaders who dominate large businesses are good news
We prefer the idea of someone steady that leaves things in decent shape for the next person up, who should probably be a woman, since they are less given to grandiose gestures that look good after one year and terrible after five.
(I’m not trying to be right-on. All the academic research says roughly that.)
As far back as 2002, the Harvard Business Review was writing about The curse of the superstar CEO.
Jack Welch and Lee Iacocca might have been terribly charismatic and imposing but the writer found that such characters can “destabilise organisations in dangerous ways”.
Rakesh Khurana wrote: “First, faith in the notion of the superstar CEO exaggerates the impact that CEOs have on companies. Second, the idea that CEOs must have charisma leads companies to overlook many promising candidates and to consider others who are unsuited for the job.”
All of which makes me wonder what will happen to JP Morgan when Jamie Dimon finally moves on.
I think the bank will be absolutely fine. Which suggests the board may have got it right in his case.
He’s not easily replaceable. At the same time, he’s not indispensable.
That’s about what we’re looking for, no?
Press release of the day
Car insurance premiums are shocking. This from comparethemarket claims they go down by £745 after just one year of no claims. And over ten years of no claims, the insurance is £1772 cheaper on average.
Insurance premiums are still up by more than 50%, the release admits.
Julie Daniels says: “While drivers could certainly make significant savings through a no claims discount, insurance premiums remain high even for motorists with no recent claims.”
Stories that will keep rolling
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