Two of the biggest and most successful corporate entities the world has ever known are headed for an inevitable crisis.
At Apple, CEO Steve Jobs announced his resignation due to ill health. At Berkshire Hathaway, CEO Warren Buffett hasn’t announced anything, but he doesn’t have to. Not at the age of 81.
Apple must learn, internally, how to move forward without Jobs. Perhaps more importantly, the company must learn how to move forward externally without Jobs as the public face of the company. Sometime soon, Berkshire Hathaway will have to deal with the same crisis.
That doesn’t necessarily mean bad news. Dictionary.com defines “crisis” as “a stage in a sequence of events at which the trend of all future events, especially for better or for worse, is determined; turning point.”
For most organizations, the departure of a single individual, even a dynamic leader, does not rise to the level of a crisis. In a handful of cases, however, the power of that individual’s personal brand is such that the separation of the personal and organizational brands triggers a crisis.
Stock market reactions in late August demonstrated the power of Buffett’s and Jobs’ personal brands.
On August 24, after Wall Street exchanges closed for the day, Apple announced Jobs’ resignation. After-hours trading was furious, and the nation’s second-largest business lost about five percent of its market value over the course of a few hours, before rallying the next day.
A day later, Buffett announced that Berkshire Hathaway was going to invest $5 billion in struggling Bank of America. On a day that the Dow Jones industrial average fell 171 points, The S&P 500 dropped 18 points and the NASDAQ declined 48 points, Bank of America went up about 10 percent. This was on the heels of a 30 percent decline in Bank of America’s stock price for calendar 2011 up to that point.
Jobs and Buffett are names – personal brands – that move markets on a global scale.
Clearly, the departure of these two larger-than-life personalities will be fundamental turning points for both organizations. That’s the double-edged sword any organization faces whenever the personal brand of a dynamic leader becomes thoroughly intertwined with the organizational brand.
As the Bank of America investment shows, the positive impact of that personal brand can be enormous. When the leader leaves the stage, however, the organizational brand so closely tied to that leader’s personal brand becomes obsolete. The organization must redefine itself to the world.
It’s a double-edged sword because the contributions of singular individuals are profound. Without the intelligence, creativity and leadership of Jobs and Buffett, it’s hard to imagine either Apple or Berkshire Hathaway becoming the force of commerce they both are.
Now, however, the organizations face the challenge of defining who and what they are, separate from those individuals. That’s why organizations with leaders who are strong, charismatic – and very public – need to start thinking about communicating transition and succession long before such plans need to be put in play.
Organizations seeking to build brands that will endure should focus on institutional values and characteristics that are bigger than any one individual. A brand dependent on a single individual is a brand that is always on a countdown to obsolescence.
— John Martellaro, Senior Account Manager