Figurehead founders are ousted from the companies they started with surprising regularity
The ousting of George Zimmer, the founder, chairman, face, and voice of Men's Wearhouse (the guy who says, "You're going to like the way you look — I guarantee it"), is nothing if not surprising. A mere month ago, Men's Wearhouse called Zimmerman the "chief driving force behind the company," and the company posted an outstanding first quarter, with profits up 23 percent to $33.1 million. Stocks have risen 29 percent in the last year.
You'd think that Zimmer, who started the company with little more than $7,000 and a hand-painted sign in 1973, would be riding high.
But abruptly, Men's Wearhouse announced Wednesday that it had terminated Zimmer from his position as chairman — and that his future role at the company is currently under discussion. Zimmer followed with his own statement, claiming he had voiced concerns about the company's direction, and "the board has inappropriately chosen to silence my concerns." Required severance for Zimmer is $250,000 a year for four years. He owns just 3.6 percent of the company's stock.
Relationships between executive founders and publicly owned companies are famously wrought. Boards often demote founding CEOs and chairmen, stripping them of decision-making duties and forcing them to step down.
Here are three other high-profile cases in which a founder was driven out of a company. They're not technically "firings," though in all three cases, that's essentially what they amounted to.
1. Steve Jobs
Steve Jobs may have founded an enduring brand and died a legend, but in 1985, he had every reason to believe his role at Apple was over.
Jobs and Steve Wozniak founded the company in 1976, grew it obsessively, took it public in 1981, and in 1983, when Jobs was 28, saw it rank on the Fortune 500. That year, Jobs personally lured Pepsi chief John Sculley to be Apple's CEO, famously asking, "Do you want to spend the rest of your life selling sugared water, or do you want a chance to change the world?"
Jobs spent the next year focusing on the Macintosh, a clunky (by today's standards) personal computer that launched in 1984 to soaring reviews but abysmal sales. The incident strained Jobs' relationship with Sculley, and in May 1985, the CEO and board booted Jobs from his role as head of the Macintosh division. By September, Jobs had resigned from Apple to start NeXT.
As we all now know, being fired wasn't the end for Jobs: At his Stanford University speech in 2005, he said: "The heaviness of being successful was replaced by the lightness of being a beginner again, less sure about everything. It freed me to enter one of the most creative periods of my life." He added, "I'm pretty sure none of this would have happened if I hadn't been fired from Apple. It was awful-tasting medicine, but I guess the patient needed it."
2. David Neeleman
In 1999, Neeleman founded JetBlue under three management principles: Employee pride, flawless execution, and bending over backward for the customer when things go wrong. And in seven years, as established airlines floundered under rising fuel costs and industry insecurity following 9/11, Neeleman grew JetBlue impressively, thanks to low rates, seat-back TVs, and blue potato chips.
Then on Feb. 14, 2007, a day that Neeleman now calls the "Valentine's Day massacre," everything changed. During a northeastern ice storm that resulted in some 1,700 flight cancelations — and more than 130,000 grouchy passengers — JetBlue, which has a "no cancelation" policy, left a plane of passengers stranded on the tarmac at JFK for nine hours. The incident exposed "massive organizational failings," says CNN. In the following days, Neeleman stayed true to his third management principle, posting a heartfelt apology to YouTube, giving millions in flight credits to affected passengers, and creating a Customer Bill of Rights for future mishaps. Nevertheless, faced with considerable bad press, the board soon demoted Neeleman to chairman and named a new CEO. A year later, Neeleman left JetBlue.
3. Jim Balsillie and Mike Lazaridis
In January 2012, following a tumultuous year that included network outages for BlackBerry and the continuing market dominance of the iPhone, Research in Motion's relieved its founders, co-CEOs, and chairmen Jim Balsillie and Mike Lazaridis of their roles, relegating Lazaridis to vice chairman on the board and Balsillie to board member "without any operational role."
Founded in 1985, RIM posted $20 billion in sales in 2011. RIM's BlackBerry, though it may seem stodgy (or at least uncool) today, was the forefather of the smartphone generation. But leading up to the founders' demotion, iPhones and Androids hit the market, dethroning the CrackBerry — or at least banishing it to the world of on-the-go businessmen — leading to a 75 percent stock dive for RIM. "The company's share of the U.S. smartphone market declined by nearly half from January to November 2011, from 30.4 percent to 16.6 percent," said the Huffington Post. "Over the same period, Android's share jumped from 31.2 to 46.9 percent." Earlier this year, Balsillie liquidated his stake in the company, and Lazaridis has announced he is leaving the company for good.
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- Steve Jobs
- George Zimmer