Inventing a new product and brand from scratch doesn’t ensure that your brand will forever remain yours. As history has shown, founders are not forever. Take for example Uber founder Travis Kalanick who had to resign as CEO, after taking an indefinite absence of leave amidst a communications crisis surrounding sexual harassment and gender discrimination complaints. Twitter co-founder and CEO Jack Dorsey had also stepped down from the CEO role in favour of a chairman role, before his return in 2015. And of course, Steve Jobs too had to step away from the CEO role of Apple at one point, before returning once again to head the tech company.
Recently, Facebook CEO and founder Mark Zuckerberg has found himself in the hot seat, following congressional hearings surrounding the Cambridge Analytica scandal. On top of testifying to various government entities globally, Zuckerberg has embarked on a global apology tour, while addressing issues surrounding user data access and measures taken to mitigate it. Just on Monday, Zuckerberg apologised again for what had transpired thus far saying this was a “big mistake”.
“It was my mistake, and I’m sorry. I started Facebook, I run it, and I’m responsible for what happens here,” he said.
Shortly after, Cambridge Analytica acting CEO Alexander Tayler stepped down from the role, resuming his former position as chief data officer in order to focus on the various technical investigations and inquiries, read a statement from its board.
Do founders always make the best CEOs?
When asked how companies should decide if a company’s founder is still suitable for the CEO role, Edwin Yeo, general manager, SPRG Singapore said, founder or not, a CEO needs to be assessed based on fixed KPIs as set by the Board. Yeo added:
If founders continues to meet his/her KPIs as CEO, then there is no need for change.
“Apple didn’t thrive until Steve Jobs came back as CEO. Bill Gates arguably presided over Microsoft’s best years before stepping down in 2000. The jury is still out on Dara Khosrowshahi’s tenure as Uber’s CEO,” Yeo explained.
For Lars Voedisch, principal consultant and MD of PRecious Communications, original founders bring with them a vision and drive that no hired employee will ever be able to match. That being said, many companies including Alphabet/Google also reached a certain point where professional management up to the highest level needed to come on board. This was to simply run a company as complexity grows exponentially.
“In many tech start-ups, original founders have been moved into a CTO or chairman positions, to leverage their technological insights or focus on the company’s long run vision. This ensures they are not being hold back by administrative hassles,” Voedisch explained.
He added, “The larger and faster a company grows, the higher the impact of its mistakes will be, and most of the time – founders simply do not have the experience in running large scale organisations.”
Under Zuckerberg’s care
That being said, under Zuckerberg’s care, Facebook has done very well financially, Yeo said. Despite the recent beatings it took in the stock market due to the scandal, its shares are still trading nearly 10 times what it was when it first listed. It is also regarded as the other credible competitor to Google in the online advertising space.
“From that perspective, it’s hard to argue that he is not the right man for the job. If I were a board member, I’d be looking at how he leads Facebook out of this crisis. If he does so well, then he would continue to be the right CEO for Facebook,” Yeo added.
Echoing the sentiment is Voedisch, who added that in times of crisis, it is important that the founder or leader to step up and front the storm, as hiding behind lawyers or corporate experts would worsen the situation.
“I believe it is overdue for Zuckerberg to have a more active role in representing his company and for Facebook in general to become more transparent and open in its communications. Its attitude in not commenting on many issues in the past or being very tight lipped has put them into a situation of possibly perceived arrogance and growing mistrust,” Voedisch said.
From a communications point of view, this means “over communicating and becoming very transparent” in what it does and what it stands for. If Facebook wants people to trust it with their data, it has to ensure a constant effort to regain trust.
Voedisch added that sincere apology is still one of the most important things in crisis communications. This does not necessarily be about admitting guilt, but rather to acknowledge that the brand or its actions made stakeholders feel or be uncomfortable.
“People are willing to forgive. The sooner someone says ‘sorry’ in a sincere manner which is accepted as being sincere, coupled with follow up actions addressing the situation, the sooner everyone is willing to move on,” Voedisch explained.
Echoing the sentiment, Yeo explained that the urgency to apologise depends on the crisis. In cases where a crisis occurs due to misconduct or negligence by a company, saying sorry should be the first step, followed by firm action which demonstrates remorse.