Lots of business dramas over the years have involved strong-willed company founders who couldn't let go in their 60s or 70s. Put much-younger founders into the mix, and tensions can be even greater.There's no shortage of ambition among corporate top lieutenants. But if they collide with a founder who mightn't yet have reached age 40, that's a recipe for management upheaval. It's also likely to provoke intense anxiety among investors, customers and employees.
Anyone attending The Wall Street Journal's D: All Things Digital conference last week saw how challenging such human interplay can be. Three famous high-tech founders -- Microsoft Corp.'s Bill Gates, Yahoo Inc.'s Jerry Yang and Facebook's Mark Zuckerberg -- took the stage for separate appearances. Each was joined by his company's most powerful nonfounding executive.
While all the speakers did their best to make nice, it didn't take a Geiger counter to sense that offstage, each management team might have a few issues to work out.
Microsoft's executives were the most candid about the challenges. Mr. Gates said he had a hard time pulling back from day-to-day decisions after handing over the CEO's job to longtime colleague Steve Ballmer in 2000. The two met as Harvard undergraduates in the 1970s.
At the conference, Messrs. Gates and Ballmer talked about how it has taken a while for them to establish that Mr. Ballmer has risen to be the "senior partner" in their business relationship, while Mr. Gates has become the "junior partner." Both men are 52.
Yahoo's leadership history has taken the opposite path, with Mr. Yang stepping in as CEO in 2007 after the Internet company parted ways with Terry Semel, a boss brought in from outside.
Mr. Yang's conference appearance was colored by the recent breakdown of merger talks with Microsoft. That put him on the defensive for much of his time on stage, arguing that Yahoo wasn't "under siege" and hadn't suffered a loss of momentum.
"I think I'm the best person to run Yahoo," the 39-year-old CEO said. "It isn't just because I bleed purple," the main color of Yahoo's logo. "It's my time to take Yahoo to the next level."
But Mr. Yang's toughest moment came when he was asked to define Yahoo's business. "We want you to start your day with Yahoo," he said. "We want you to come to Yahoo multiple times a day."
That brought a quick interjection from Sue Decker, the company's 44-year-old president, who built her career on Wall Street before joining Yahoo in 2000. Aware that Yahoo has been criticized in the past for sprawling into too many areas, she said: "It's a little bit of a change. We still do hundreds of things. But we want to focus Yahoo on four things" -- its home page, search, email and mobile communications.
After the Yahoo presentation, conference attendees were buzzing about what struck them as a hazily defined strategy. With Mr. Yang and Ms. Decker emphasizing different elements and shareholders unhappy about Yahoo's falling stock price since the Microsoft deal fell apart, the status quo doesn't seem stable.
Facebook's Mr. Zuckerberg and his recently recruited chief operating officer, Sheryl Sandberg, 39, went on stage with different challenges.
The 24-year-old Mr. Zuckerberg, dressed in jeans and a hooded olive sweatshirt, was grilled on why he is remaining CEO of his fast-growing social-networking Web site. When a growing company needs more-experienced management, the norm in Silicon Valley is for young founders to let someone else become chief executive.
Mr. Zuckerberg offered a job description that suits him well. "CEOs do two things basically," he said. "They set the vision, and they build the team."
But Facebook's vision was set years ago. The company's biggest challenges today include finding ways to sell ads or raise revenue in ways that won't alienate users; managing fast-paced expansion in an orderly way, and dealing briskly with privacy concerns about users' data. As the company's "grown-up," with previous managerial experience at Google Inc. and the Treasury Department, Ms. Sandberg is the logical person to take command of such areas.
Ms. Sandberg and Mr. Zuckerberg have been working together for only a few months. Their onstage remarks at D were separate soliloquys. It's anyone's guess whether they can establish true working harmony and divide up duties effectively.
"Once you've founded a company, you tend to think extremely highly of your abilities," says David Lewin, a professor at the UCLA Anderson School of Management. "And in some ways you should." But founders' hubris can often get them in trouble, he cautions.
A more philosophical view comes from Adam Galinsky, a professor at Northwestern University's Kellogg School of Management who studies ethics and decision making. Founders' challenges in letting go have been studied for decades, he observes, without ever being solved in a lasting way.
"These are timeless issues," Prof. Galinsky says. "Many people have to learn the lessons themselves. Their own experience counts for much more than anything anyone else will tell them." Often it's only on a second or third start-up that founders are more mindful of how -- and when -- they pass the leadership baton, he says.
By: George Anders
Wall Street Journal; June 4, 2008
