The Hardest CEO Succession Isn’t the First One 🏭🧑🏻✈️
What happens when a CEO inherits a culture they never lived through
In recent years, most Big Tech companies (defined broadly) have lost their founders to retirement (or worse).
Apple lost Steve Jobs, Google has been largely without Larry Page and Sergey Brin (though he’s now more involved), Amazon is mostly without Jeff Bezos, Reed Hastings retired from Netflix recently, and Microsoft hasn’t been run by Bill Gates in a very long time.
Mark Zuckerberg, Jensen Huang, and Elon Musk are some of the last men standing.
While the transition from founder to non-founder is extremely important, a lot of these leaders are still from the generation that grew up with the company. They were there at the start, or at least pretty early on, and they understand the company’s culture firsthand because they lived it for a long time and saw it evolve.
They don’t just know the solutions that the culture came up with — they know the original problems that generated those answers. They don’t just know the how, they know the why. That’s important!
The second crucial transition occurs when you get a CEO who *wasn’t there* in the early days. They inherit something already big and successful, they land in an existing culture that they don’t have all the reference points to understand.
That’s extremely critical! It’s a pivotal moment in the lifecycle of a company!
Satya Nadella may seem like one of these at first glance, but he joined Microsoft in 1992 and was around for enough of the company’s history — not just in calendar years, but in “mass of stuff happening” (ie. more things happening during certain years than others) to be part of the old guard. He was around for most of the formative things that made Microsoft the company it was when he became CEO.
I’d argue that Tim Cook is in a similar position. He joined Apple in 1998, which was early enough to see the company at its lowest point, close to bankruptcy and having to claw its way back to relevance and success. This is one of the most formative periods in Apple’s culture and perception of itself, and witnessing it firsthand matters.
Same for Andy Jassy joining Amazon in 1997 and became a founder of AWS inside of the company.
The biggest danger point, where things could go really wrong, will be when some of these companies are led by management that only knew the latter incarnations.
These transitions are not impossible to get right, and once in a while you get someone who can have a new “founding” moment and have the legitimacy to make bold choices and risky but high-reward bets. But most of the time, you get caretakers who stick around for a few years, optimize for whatever KPIs their bonuses are based on, make their millions, and then move on.
That’s rarely good for the health of companies…
🧭 This first appeared in Edition 492 of Liberty’s Highlights. New here? I made a page for that: Start Here.