Trust me, I have been there. Probably not to the extent that Stefan Larsson has this morning in declaring he is leaving Ralph Lauren’s company after barely 15 months as the only CEO not named Ralph Lauren. But nonetheless, when your name is not only above the door, but on every label on every garment and accessory you produce, you know who is boss.
Yes, the company has been a public company since 1997, but there has never been any doubt as to who has been in charge since Ralph started selling ties to department stores in 1967. Once your name is on everything as well as being the company’s name, it becomes personal – highly personal.
A family business it may not be in the strictest definition, especially being a public entity (despite the fact that David received a big promotion when Stefan was named CEO – almost like a consolation prize), but it seems to be run like one, with an authoritative figure at the top, stubbornly holding onto how the brand should look, feel, operate and project publicly. I am not saying this he has a wrong or outdated vision (as I am not privy to the exact substance of the creative disagreement), but with a founder/chairman at 77 years of age, new ideas are going to come one way or another soon enough.
An owner/founder relationship with a hired gun has always been a tenuous proposition. It can be a raving success, as I had first hand knowledge of witnessing at Gap, Inc. between founders Don and Doris Fisher and their hired gun Millard “Mickey” Drexler. This was a home run for over 19 years and did eventually end in a bit of acrimony unfortunately, but not due to the ego or stubbornness of the founder’s vision. The secret to their success was that Don bought into Mickey’s newer vision and creativity and allowed him to run with it. Don never thought of the company as his personal fiefdom. He had a healthy attitude towards the company being its own living and breathing entity of which he was a part. His own name was also not over the door and on every label.
In my own experiences as being a hired gun in smaller situations, it is very difficult to influence and convince an owner/founder to take a different path than he/she has always taken. With all good intentions and all the right words being uttered to the hired gun in interviews and conversations leading up to action, owners find it almost impossible to separate themselves from the companies they built. Hence, the unhealthy inertia of doing things the same way as it has been done to build a company to a certain point (and there are several inflection points in a company’s growth arc) sets in and the founder then digs in and “pop goes the weasel” so to speak.
The Private Equity community has made a living on being that bridge to take a founder’s company, monetize the effort to that point and then ease in new management with new ideas in order to maximize the potential of a business or concept. More often than not, that approach has been successful, only because the PE firm insists on holding the ultimate hammer.
What’s next at Ralph Lauren? I suspect their search will only yield middling results and few serious candidates after the superstar Larsson’s ignominious exit. Watch for the next CEO to be someone who also has his name above the door.