Thursday, February 05, 2009

Founder and CEO, who can manage the company well?

As one of the few Chinese companies who successfully expanded to the world, Lenovo is always respected. Liu Chuanzhi, the founder, is definitely a character. He appointed Yang Yuanqing, a 30-something, to succeed him as the CEO, and then Chairman. He always says "Empower the youth".

Now with a huge loss reported for the last quarter, Lenovo is struggling among the pressure from investors. Liu is coming back as Chairman, and Yang resigned from chairman to be CEO. The official reason is that Yang will be mainly in charge of domestic business since that's where he came from. I can understand the pressure Lenovo is having now, but the question staying on top of my head is who can manage a company better, a founder or a CEO.

Probably Levono is learning from Yahoo to have its founder back. However, we see Yahoo went still can't get rid of the destiny to be acquired by Microsoft. One of the companies that Leveno may learn is Cisco. Founders already cashed out, while the company has been going through two generation of CEO, John Morgridge, and John Chambers. Even in bad time, Cisco can still survive.

Founders usually have a lot of emotional attachment to the company, such as its original business plan. That type of connection makes it hard to get to a good decision since emotion is hard to control. That's why when company grows bigger, professional managers are needed because they are the one who made the decision for a better future, instead of a planned future.

All I can say here is "Good luck, Lenovo".

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