Game of thrones

Consider this. Twenty years after he founded the company Dell in his dorm room, Michael Dell passed the reins over to Kevin Rollins, a former Bain partner. But Rollins was unable to match up to the legendary founder. Under his leadership and attempts to alter what Dell stood for, the company faced customer service complaints, growing competition from HP and IBM, and an SEC investigation into its accounting. When Rollins resigned in 2007, Michael Dell returned to make a turnaround. A similar tale unfolded at Starbucks when its legendary founder Howard Schultz retired in 2000 handing over the baton to Orin Smith and later, to Jim Donald (2005). Both these leaders were responsible for overexpansion, a move that impaired the fortunes of the brand till Schultz returned in 2008 to take charge.

"The pressure of the 'larger than life' halo effect of a founder is always felt by his successor," says Aditya Narayan Mishra, president, staffing, Randstad. Strong impressions in the minds of stakeholders, after all, are difficult to erase or match. "Even if a legacy founder has no direct operational role, his words carry weight. So he should consciously distance himself from daily operations and give enough room for his successor to grow using his own unique strengths," he adds.

Look closer home, and a similar story seems to have played out in a host of companies. When Vivek Paul, vice-chairman of the company at that time, put in his papers at Wipro citing 'restlessness' at the organisation, founder Azim Premji faced a delicate situation. Paul was a star performer and a sort of brand ambassador for Wipro. On the other hand, Premji's old guard was becoming resentful, and something had to happen. One can't really say if Premji felt upstaged by Paul, but there's a thought.

That said, there are quite a few examples of new CEOs who have successfully emerged from the shadow of a founder-predecessor.

 

Staying with the IT industry, consider TCS founder FC Kohli and his successor S Ramadorai. Ramadorai took over as CEO in 1996 when TCS earned just $100 million and had 6,000 employees. Under Ramadorai, the company grew to $6 billion and came to be counted among the world's largest global software and services companies. FC Kohli's strategy and business model was scaled up by Ramadorai and his team to a level no one imagined was possible. Now take ICICI Bank. When KV Kamath returned to the ICICI fold as managing director and CEO of ICICI Bank in 1996, he immediately instituted a series of changes that successfully transformed the project finance entity into a retail finance powerhouse. Over the years he led ICICI Bank into areas such as insurance, retail lending, internet banking, online trading, business process outsourcing and commodities trading. Interestingly, under his successor Chanda Kochhar ICICI Bank gave up its earlier philosophy - to be the biggest in everything it did. It is now less of a risk taker; it is focused more on credit quality and capital conservation than an all-or-nothing growth. In a way, Kochhar has dismantled the very ICICI structure she has grown up with, say analysts.

Looking out of India, a more recent example of a successful change of hands would be at Apple, where Tim Cook replaced founder Steve Jobs. The two couldn't be more different: Jobs was brilliant, fiery and prickly, while Cook is said to be even-keeled, methodical and quietly persuasive. Cook seems to be doing alright, managing to move out of the shadow of Jobs and not crumbling under investor pressure to reignite growth with breakthrough products.