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LOS
ANGELES , In the years after Walt Disney's death in
1966, his successors did their best to run his namesake
company as they thought the founder would have wanted.
Even
small decisions were subjected to extensive debate about
Disney's preferences. The effort was heartfelt and
well-intentioned , and it hobbled the company.
"They
were always double-checking themselves with 'what would
Walt have done?'" said Harold Vogel, a veteran
Disney analyst. "It didn't allow them to react to
changes in marketplace nearly as fast as they should
have."
As Apple
Inc. embarks on a future without Steve Jobs as chief
executive, the technology giant can only hope it doesn't
follow in the footsteps of the many companies that
suffered after their iconic leaders stepped down.
A host of
prominent companies including Starbucks Corp. and
Microsoft Corp. endured various stumbles after their
luminary CEOs gave up the reins, analysts say. Apple
itself floundered after Jobs exited in a 1985 power
struggle before returning to rescue the technology giant
11 years later.
Even
long-planned transitions to hand-picked successors often
don't work out, experts say.
"There
are examples of charismatic and entrepreneurial founders
who have passed the reins successfully, but they are
much fewer and farther between than what we mostly see,
which is a founder exits and the company falters,"
said Nancy Koehn, a historian at Harvard Business
School.
Apple has
stage-managed the transition to new CEO Tim Cook as well
as it could, and it has a big advantage with Jobs
staying as chairman, analysts say.
And
whenever Jobs departs permanently, they say, his absence
probably won't be felt for several years as the company
executes the business strategy that he left.
But the
longer-term track record at other companies isn't
encouraging, analysts say. It's particularly weak at
tech companies, which are vulnerable to the loss of a
founder's creative instincts in a constantly changing
industry.
"Succession
failures are more common in high-tech because the
dynamic nature of the market and the intense competition
requires constant innovation," said Arvind Malhotra,
an associate professor at the University of North
Carolina's Kenan-Flagler Business School.
CEO
transitions are normally beset by obstacles , only some
of which stem from the obvious difficulty of replacing a
corporate version of Babe Ruth.
Successors
typically are hesitant to deviate from an ingrained
strategy, partly because they question themselves and
partly because of the inevitable second-guessing from
corporate boards, investors and employees, experts say.
"In
some ways, the worst job for a CEO is to follow a Walt
Disney or a Steve Jobs because it's almost
impossible," said Ed Lawler, director of the Center
for Effective Organizations at USC's Marshall School of
Business. "Often these people are iconic because
they're irreplaceable."
Microsoft's
stock price, for example, has stagnated for a decade as
the software behemoth has struggled with limited success
to push into new markets.
Experts
say that's not entirely the fault of Steve Ballmer, who
succeeded his longtime friend and colleague Bill Gates
as CEO in 2000. Some analysts say Microsoft's problems
finding businesses beyond its flagship Windows and
Office software were already becoming apparent during
Gates' tenure. But critics say Ballmer lacks the vision
and killer instinct of his predecessor.
When
Howard Schultz, the legendary chief executive of
Starbucks, stepped down in 2000, he thought he was
leaving the company in capable hands. But sluggish
performance prompted Schultz's return eight years later.
Walt
Disney Co. benefited from the 1971 opening of Disney
World in Florida, which was planned before the founder's
death, Vogel said. But then it sputtered through until
Michael Eisner took over as CEO in 1984 and ushered in a
resurgence.
So far,
the reaction on Wall Street to the management change at
Apple appears to be somewhat favorable. The stock,
considered one of the hottest on Wall Street, fell 0.7
percent to $373.72 on Thursday. Most analysts felt that
investors had already factored Jobs' eventual departure
into the stock price.
Investors
were also comforted by Cook's pronouncement in a letter
to Apple employees that he plans to "stay
true" to the company's long-standing strategy. The
letter provided soothing words during a tumultuous
period, though investors and customers will be waiting
to see whether Apple can remain innovative in the long
term without Jobs at the helm.
"Steve
built a company and culture that is unlike any other in
the world and we are going to stay true to that , it is
in our DNA," Cook wrote.
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