Oxford, MS 8/26/2011 (PennyPayDay) – The founder of a successful corporation steps down. Then what?At Ford Motor Co. (F) and Walt Disney Co. (DIS), long periods of stagnation or decline, followed by renewal. At Wal-Mart Stores Inc. (WMT), continued success for a time, then new challenges.
Now it is Apple Inc.'s (AAPL) turn, following Steve Jobs's resignation as CEO on Wednesday.
Tim Cook, Apple's new CEO, gets high marks for running the company during Mr. Jobs's two medical leaves in recent years. "Apple has done a better job than most to prepare for this," says Jeffrey Pfeffer, a professor at Stanford University's Graduate School of Business, who knows several Apple executives.
But history suggests it will not be a smooth ride.
There are perils in every course. Disney got in trouble for hewing too close to its founder's vision. Wal-Mart is faulted now for veering too far from its founder's strategy.
The tension isn't limited to the U.S. Japan's Sony Corp. (SNE - News) lost its market leadership in electronics after charismatic founder Akio Morita stepped down as chairman in 1994. By contrast, some of Honda Motor Co.'s (HMC - News) most innovative vehicles—and greatest market successes—came after founder Soichiro Honda retired in 1973.
Students of leadership say the companies that navigate the transition most successfully are those that embed the founder's values in the organization and groom multiple generations of leaders.
"The difference between a cult and a religion is that one outlasts the founder," said Harvard Business School professor Rakesh Khurana, who has written extensively about CEO succession.
Strong leaders can help, but Mr. Khurana offers a sober outlook. "Most firms don't survive," he said. "In tech in particular, it's like watching fruit flies."
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