On a recent visit to Tanzania a colleague in the media asked me whether President Robert Mugabe was really standing for office again. I said he was because the party had chosen him.
He said that Tanzania founding President Julius Nyerere confessed when he stepped down after 24 years at the helm of his country first as Prime Minister and then President (just like Mugabe) to give way to Ali Hassan Mwinyi, that throughout his 24 years in office he had been assured by his lieutenants that he should stay because the people loved him.
Nyerere said that after he left office, he realised that it was not the people per se that wanted him to remain in office, but his lieutenants because his continued stay ensured that they could continue to loot the country.
My Tanzanian media colleague asked, could this not be the same reason why people want Mugabe to hang on, namely that his continued stay can protect their loot?
I felt there was an element of truth in that. Opposition leader Tendai Biti once said, ZANU-PF was abusing Mugabe because at 94 he really deserves a rest. But others would disagree arguing that wisdom comes with age.
Jeffrey Sonnenfeld, who has been studying company chief executives and what makes some stay longer and others to quit, came up with something I thought could explain the Zimbabwe situation.
He says Americans decided to have the United States CEO serve only two terms of eight years after Franklin Delano Roosevelt’s four terms led some to worry about the risk of an imperial CEO.
Zimbabwe agreed to a two-term limit but said it would not apply retrospectively for Mugabe.
Sonnenfeld says that although the average CEO in the United States serves only five years, there are some who have been at the helm of their companies for more than 60 years and the companies are doing extremely well.
Rupert Murdoch and Warren Buffett are typical examples. Buffett, who has managed an average 22 percent annualized growth has a clear succession plan, while Murdoch when asked by Buffett what his succession plan was responded that he was in no hurry to go anywhere because his mother, who was 98 then, was still active and intellectually sharp.
Sonnenfeld in an article in Fortune magazine in May 2015, had this to say about CEOs:
In my 30 years studying CEOs retirements, I have found that chief executives fall into four primary categories when it comes to the way they think about their term lengths.
Prime examples: Rupert Murdoch and Fred Smith, who were preceded by such historic figures as Occidental Petroleum’s Armand Hammer and Boston Consulting Group Founder Bruce Henderson
They are often brilliant visionaries who believe that they are the one person on earth who is truly indispensable to their companies. William Black ran the Chock full o’Nuts café chain for 60 years, with his last two from his hospital bed at age 83. Monarch CEOs are driven by an elusive quest for an immortal, lasting legacy, as well as for the heroic stature that comes with the position. They want the world to be different because they lived, but they can be blinded by their visions.
Threatening successors are often eliminated before the board realizes what happened, increasing the board’s dependence upon such monarch CEOs; that was the case with Richard Fuld at Lehman Brothers. They often suffer a stormy, feet-first exit—either dying in office or as the victim of a palace revolt. BCG’s partners revolted while its founder Bruce Henderson was on a client assignment, not even leaving him a desk in the office. Happily, the Walt Disney board moved quickly enough before their once visionary savior, Michael Eisner, could derail the rising star Robert Iger, who was a genuine threat to Eisner extending his 20-year reign. Iger has taken Disney to historic heights, key strategic portfolio enhancements, geographic expansions into China, and 312% shareholder returns over 10 years (or 12 % annualized).
Prime examples: Steve Jobs, Michael Dell, Martha Stewart, and Howard Schultz
Like the great generals of World War II (Patton, MacArthur, Montgomery, De Gaulle), these CEOs return to office at a time of crisis to revive their enterprise and lead their companies to greater glory than they did during their first tour of duty. Often, they have the credibility to make major changes at their companies. They have the leeway, as Michael Dell has emphasized “To show that this is a business, not a religion.” The challenge for some generals is to not exaggerate the sense of crisis as a pretext to engineer their return to power, as was the case with Harry Gray of ITT, William Paley at CBS, and Juan Trippe at PanAm. Company boards must ensure that the crisis is genuine.
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
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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?