Prime examples: Intel’s Andy Grove and Craig Barrett, Reuben Mark at Colgate-Palmolive, McKinsey Founder Marvin Bower, Eric Schmidt of Google, and Bill Gates at Microsoft
These CEOs often have an excellent relationship with an internally groomed protégé. They can serve as wise elder statespersons and mentors, with roles like cross-industry spokesperson, government emissary, and global diplomat. Time Warner’s Jeff Bewkes assumed power through a graceful transition from his predecessor, Richard Parsons, and in six years as CEO he has produced 388% total shareholder returns (28% annualized).
The challenge for these leaders is to not be tempted by the pull of past associates or their own unfinished career agenda to intervene and undermine their successors as they learn to walk on their own. Since taking over the reins in an ambassadorial succession at DuPont, Ellen Kullman has produced 263% shareholder returns (23% annualized).
Prime examples: Meg Whitman, CEO of eBay and then HP; Jim McNerney of 3M then Boeing; Anne Mulcahy of Xerox then chairman of Save the Children; Jim Clarke of Silicon Graphics, Netscape; Healtheon, and My CFO
Meg Whitman: Spinoff key to turnaround strategy
These leaders generally have short, but highly effective, terms of office.
Governor CEOs often look for new opportunities in public service, start-ups, or turnarounds. After a four-year stint as CEO at 3M, Jim McNerney assumed the leadership of a highly scandalized Boeing and in a decade, has regained its global luster as well as delivering 228% shareholder returns (annualized at 12%).
The challenge for boards with these leaders is to ensure that they don’t get diverted by new opportunities too soon or engage in fire-sale asset auctions to build short-term credibility.
Ed: Where do you think Zimbabwe fits in?