It’s clear that competition in the fashion and apparel business is as brutal as any. Every organization is faced with a changing retail environment, the impact of the internet, pressure on margins, and challenges of becoming efficient in every aspect of the business. It’s not surprising that these businesses are increasingly finding it necessary to look beyond their original founder for the different skills required to succeed. This transition, however, in many situations appears problematic.
Often these entities have taken on the personalities of their founders. Men’s Wearhouse's founder, George Zimmer, famously told consumers that we "were going to like the way we look.” At Men’s Wearhouse, Zimmer wasn't just the founder; he was also the chief spokesperson. When we watched advertisements for Men’s Wearhouse, we thought of George. Ralph Lauren and Diane von Furstenberg, both founders of their eponymously named companies, have their names deeply intertwined with their brands. It’s hard to imagine either without their founder at the helm. Seemingly each of these organizations already has been rocked by the challenges of their founder’s succession.
People are mortal. You never know when the day will come that a founder won’t be around to run his or her company. And the skills required to compete as a business grows are often drastically different from their earlier days. Ensuring that your company is prepared for that inevitable day is something that's too often neglected. With companies like those cited above that have oversized founder personalities that are merged with their brands, succession can be a challenge.
Ralph Lauren and Diane von Furstenberg both tried and failed at giving up the CEO reins. Lauren handed off the CEO role to Stefan Larsson in 2015, only to take back the role less than two years later in what was described as a creative clash. von Furstenberg tried to do the same with Paola Riva, also in 2015, before announcing in early 2017 that Riva had resigned. Lauren and von Furstenberg each took back over after those failed successions. Zimmer wasn't so lucky. His investors decided that the company would be better with a new CEO and unceremoniously ousted Zimmer, despite his active protestation. Zimmer went so far as attempting a coup before giving up his relationship with Men’s Wearhouse.
These are important lessons for founders and their investors and boards that go well beyond the fashion and apparel industry. Founders and their leadership teams should anticipate that as their organizations scale, the skills and experience of the company founder will need to be supplemented or replaced by someone who is skilled and experienced in operating the business rather than on building its brand. The more advance preparation the better.
The first step in this process is to realize that it's very unlikely that the founder will be the person at the wheel for the entire journey of the organization. The more successful the company, the more critical it is to establish this planning early. Building a long runway to introduce and test a successor’s wings well in advance of installing him or her as CEO is an important part of most successful organizations’ strategies.
Second is weaning the founder from the convergence of their personal brands and that of their organization. While it's fine to build a brand based upon your own persona, it's critical that this doesn’t require the founder to perpetually be in the driver’s seat.
The third step is to try before you buy. Test out that potential successor in a lessor role working side-by-side with the founder for a sufficient period of time to provide a clear understanding of whether this marriage is going to work. By continually giving more and more authority and responsibility to a potential successor, you'll get a good view of how they deal with the tough issues. We all know that resumes and interviews are a flawed indicator of future success. Trial runs give you a much better idea of how that person will work, while giving them an opportunity to begin to build relationships and credibility throughout the organization.
With the right approach, even the most storied founder who shares a name with the organization can find a suitable replacement. Starting early, weaning yourself from the CEO role and testing your successor are all necessary ingredients to a successful transition.
Les Trachtman is CEO of The Trachtman Group, a firm focused on helping companies grow and scale, as well as CEO (and majority investor) of Purview, an early-stage company focused on disrupting the medical imaging business by making patient images available and accessible wherever and whenever they're required.
is currently the CEO of The Trachtman Group – focused on helping companies grow and scale, as well as CEO (and majority investor) of Purview, an early stage company focused on disrupting the medical imaging business by making patient images available and accessible wherever and whenever they are required. For the past two decades, Trachtman has helped founders in half a dozen growing organizations while acting as a Sherpa for dozens of others. He has taught and lectured at numerous universities including the Harvard Business School, the MIT Sloan School of Business, Resselaer Polytechnic Institute, Kent State University, University of Maryland Smith School of Business, Union College, and Quinnipiac University School of Business. Trachtman also has published articles in the Harvard Business Review and Quinnipiac University Business. A portion of his career is featured in the Harvard Business School case study; Les is More Times Four, which educates entrepreneurs at leading business schools.
Don’t F**k It Up is available on Amazon and wherever books are sold.