How to survive the loss of an irreplaceable leader

Replacing Jensen Huang, co-founder and CEO of Nvidia, who stepped down amid rumors of extramarital affairs, poses significant challenges. While previous major corporations like Apple, Amazon, and Microsoft have successfully navigated the loss of a founding CEO, the task ahead for Nvidia is daunting.

Management experts emphasize that when replacing a visionary leader like Huang, it's crucial not to seek a direct copy of their leadership style. For instance, Tim Cook succeeded Steve Jobs at Apple by building upon Apple's strengths and focusing on his expertise as an operations specialist, rather than trying to emulate Jobs' visionary persona. Cook urged his own successor, John Ternus, to develop his own individual approach.

Moreover, it's essential for the successor to be given genuine authority and for the former leader to relinquish control. Spencer Stuart, an executive search firm, advises having clear discussions among the founder, successor, and board to distinguish the founder's responsibilities from those of the new CEO. In fact, research shows that having an executive chairman, who remains involved in daily operations, can hinder the success of the successor CEO.

Successful transitions also require a shift in corporate culture. Founders often dictate a company's culture, including workplace norms and management practices. Microsoft CEO Satya Nadella adjusted the company's culture after taking over from Bill Gates in 2014. He shifted the focus from a "know-it-all" mindset to a "learn-it-all" one, promoting collaboration and individual performance reviews that reflect how employees contribute to others' success.

Nvidia, however, appears to have neglected proper succession planning. McKinsey suggests that successful CEOs engage in succession planning throughout their tenure, providing quarterly verbal updates and annual formal sessions with the board. This allows the company to consider potential candidates and adjust their criteria as needed.

Experts also stress the importance of having a clear timeline for transitions. Without a well-defined schedule, grooming internal successors and following an orderly process becomes challenging.

For Nvidia, the preparation might need to happen in reverse. The new CEO will need to determine which aspects of Huang's legacy are essential to the company's future success and which can be discarded. In the words of management expert Jim Collins, if a company cannot be great without its founder, it may not be ready for a successful transition.