Everybody has to go eventually—even technology moguls can run out of energy and new ideas. But company founders are often tempted to hang on for one more product cycle, or to just ignore the succession issue entirely. That’s a bad idea—the skills involved in launching a successful company are often quite different from those needed to shepherd a mature one.
Granted, some handle the transition with poise. Bill Gates, for example, first handed the reins for Microsoft Corp.’s day-to-day matters over to Steve Ballmer in 2000. He continued as chairman, giving the company a bit of continuity. Gates could stay above the fray, offering valuable bits of strategic insight, while Ballmer grew into his new job. That process now complete, Gates will step aside altogether in July. And Ballmer has stated he will go within 10 years.
Microsoft’s market dominance granted it sufficient stability for such a leisurely handover. Smaller, fragile companies lack this luxury. Yahoo Inc.’s implosion shows what can happen when a transition is mishandled.
Jerry Yang, the Internet company’s co-founder, reasserted control last summer after stepping aside several years earlier.
His second tenure in the corner office hasn’t been a happy one. The company has steadily lost market share in the search business. Some shareholders are aggrieved that it turned down a generous offer from Microsoft. And now the company is haemorrhaging top employees. Over the past week alone, Yahoo has lost a number of key executives, including Jeff Weiner, its head of networks; Qi Yu, a Yang loyalist responsible for the design of its Panama advertising sales system; Vish Makhijani, senior vice-president and general manager of search; and Stewart Butterfield, founder and general manager of Flickr.
The Wall Street Journal has reported that Yahoo executives, led by president Sue Decker, are discussing a significant reorganization of the company. Yahoo’s new reorganization plan—which involves its numerous divisions, including home page, search and mail—is meant to centralize its absurdly confusing structure.
This would be a good thing. Yet Yang’s future role at the company, already hazy, gets cloudier by the day. Microsoft’s bid gave him a chance to bow out gracefully, and he missed it. Founders shouldn’t hang around past their sell-by dates.