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Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
When Adam Neumann went to see Jamie Dimon in 2019 for advice about whether to fight attempts to oust him as chief executive of WeWork, the JPMorgan Chase chief executive was categorical. Neumann should go, and go quietly, for the sake of his creation. “Save your child. Save your baby,” Dimon said, according to Eliot Brown and Maureen Farrell’s book The Cult of We.
Neumann did quit, though his pay-off of some $1bn in cash and shares meant his departure was far from quiet. But parents never stop worrying about their babies. To that extent, Neumann’s quixotic quest to buy the co-working group out of bankruptcy, less than five years after his spectacularly botched attempt to take it public, is as unsurprising as it is shameless. Can such comebacks ever work and, if so, how? Returning founder-CEOs come with some important built-in assets that usually distinguish them from non-founder “boomerang chief executives” such as Bob Iger at Disney, or Sergio Ermotti at UBS.
Founders retain the charisma and drive that helped them launch the company in the first place. As well as the emotional bond, they often have a large stake in the company, which grants them a seat round any negotiating table. (In Neumann’s case, even a small portion of that $1bn buys a large chunk of WeWork creditors’ attention.) And — like all experienced former chief executives — they retain considerable knowledge of how the business works, not to mention a connection with the directors and investors who might rehire them.
When succession planning goes awry, and the company is in trouble, it often makes sense for boards to turn to founders for help. Founders’ assets can turn into liabilities, however. An attachment to out-of-date ways of running “their” company, built up in different times, often when it was smaller and less complex, could hold a more mature organisation back. Superdry’s co-founder Julian Dunkerton fought to return as chief executive of the retailer in 2019, but has struggled to regain the spark that made it a success during his first stint in the job. The company is now exploring whether to go private.
Many former founder-bosses use their privileged position and knowledge to be a thorn in the side of their successors. After stepping down as chair of easyJet in 2002, founder Sir Stelios Haji-Ioannou engaged in a rancorous, years-long feud with successive boards over the airline’s future, before agreeing in 2022 that it was finally the right time to buy new aircraft. The Body Shop’s co-founder Anita Roddick always rued floating the company in the 1980s. She died in 2007, but it is hard to imagine she would have stood by watching her baby sicken under successive owners, culminating in the cosmetics retailer’s UK arm being put into administration last week.
The scarcity and specificity of examples of comeback founders make it hard to generalise about them, however, and some examples of success are not quite as clear cut as they look. Michael Dell made an admired comeback as chief executive of the eponymous computer company in 2007, but he had remained chair during the three-year period after he first stepped down, and described his return, in his 2021 memoir, merely as “a symbolic move and a practical one”.
Steve Jobs is a more solid case study. While his return as saviour of Apple is sometimes depicted as an inevitable triumph, he took time to decide to take the lead in rescuing the ailing group. He styled himself “iCEO”, for interim chief executive, for months after his return in 1997. Jobs’s initial indecision about whether to step back up to the challenge is instructive. More than a decade away from Apple gave him added maturity, experience and perspective that stood him in great stead when he did recommit to the company. The contrast with Adam Neumann’s apparent conviction that a few years will have washed away the sour taste left by his cavalier leadership of WeWork is striking.
