HBR: Why companies with visionary leaders rarely have visionary successors

Leaders like Bill Gates and Steve Jobs are renowned around the world for their innovative genius and inspiring leadership styles. But their successors — not so much. Despite Microsoft and Apple's continued growth and success, neither company's current leaders have demonstrated an aptitude for imagination on par with their predecessors, according to the Harvard Business Review.

After heading Microsoft for 25 years, Bill Gates handed his title to Steven Ballmer in January 2000, who served as CEO for 14 years. Mr. Ballmer tripled the company's sales to $78 billion and more than doubled profits from $9 billion to $22 billion, according to the report. The company also launched Xbox and Kinect and acquired Skype and Yammer during his tenure. In terms of revenue growth, Mr. Ballmer was top notch. But in terms of long-term survival, he was a failure, according to the report.

The problem was Mr. Ballmer organized the company around the execution of its current strengths: Windows and Microsoft Office. As a result, it lost to Google in search, to Apple in mobile operating systems, to Netflix in media and to Amazon in the cloud. By 2015, out of the 2 billion smartphones out there, Microsoft's mobile OS share was 1 percent, according to the report.

One of the many strengths of visionary CEOs is they develop an executive staff filled with top operating executives. When Mr. Jobs was CEO of Apple, he led the vision but placed strong operating executives throughout the company — in hardware, software, product design, supply chain and manufacturing — who then translated his vision into new products and services.

The problem arises when it is time for the visionary CEO to depart. Most often, the outgoing CEO appoints one of the operating executives who reported to them to run the company, as in the case of Microsoft and Apple. Usually one of the first things these operations/execution-minded CEOs do is try to eliminate the chaos in the organization, as they value stability and process. While this helps ensure predictability, it can be a death sentence for creativity, according to the report. Creative people leave the organization and a cultural shift descends from the C-suite: What used to feel like a company out to change the world begins to feel like any other job.

Visionary CEOs err when they select execution executives for their successors. They confuse execution with passion and market insight, but these traits are the not the same — for long-term survival, the latter is more valuable, according to the report.

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