While Viacom’s raging succession battle surrounding owner Sumner Redstone is as compelling as the company’s TV dramas, the script is not new. Akin to Shakespeare’s “King Lear”, Shelley’s “Ozymandias,” or the biblical King Saul, an imperial ruler nearing the end of his life has found that time is not on his side, with few sympathetic figures in the castle.
Viacom CEO Philippe Dauman has accused Sumner Redstone’s daughter Sheri of manipulating the genuine wishes of her father, Viacom’s controlling owner, leading to Dauman’s ouster from Redstone’s controlling trust. With 80% ownership of Viacom (VIAB) and CBS, the 93-year old Redstone monitors such once-edgy youth oriented businesses as MTV, Nickelodeon, VH1, Paramount Pictures, and CBS.
Six years ago, at a CEO forum I moderated, investor Warren Buffett, 85, candidly commented on the difficulties of succession and then asked media baron Rupert Murdoch, 85, to explain his succession plans. Murdoch demurred, citing his then-centenarian mother, claiming he had the same genes as her and that he was going nowhere in the near future. Buffett’s reply to Murdoch: “Boy, I’ve heard of ‘managing outside the box,’ but you’re pretty optimistic!”
The 60-year reigns of Redstone, Murdoch, and Buffett belong to a type. I labelled such CEOs “Monarchs” in my book on CEO exits, The Hero’s Farewell. Such “Monarchs” are often brilliant visionaries whose personal identities become fully fused with their roles at work. They become blinded by their visions and do not often leave office gracefully. Departures for “Monarchs” are generally feet first exits—through a palace coup or by dying in office. Monarch CEOs are motivated by two elevated drives: Heroic Stature, to be identified as truly unique through fame; and Heroic Mission, to leave a lasting, immortal legacy. They are great creators and believe that they are truly indispensable. The hoof beats of approaching successors elevate their anxiety. When asked about his succession plan, Redstone routinely replied that he had no plans to die.
Where the Kingdoms Cluster
Monarchs represent only about 5% or 6% of all CEOs, based on the research I conducted for my book, but are more commonly found in personality-driven businesses like media, retail, and finance. The great publishing empires of Cyrus Curtis, Henry Luce, and William Randolph Hearst were built by tyrants. Walt Disney worked on the development of Disney World, Epcot Center, and the Jungle Book movie until two weeks before his death of lung cancer in 1966.
The fumbled transfer of power to Disney’s overwhelmed, risk averse son-in-law almost suffocated the company. Michael Eisner led Disney’s revival in 1984. But the redeemer ultimately turned into a spiteful tyrant. He resisted his own succession for 20 years and even tried to undercut his hand-chosen successor Bob Iger.
Lew Wasserman ran MCA Universal for over 40 years, as did Louis B. Mayer of MGM, who, like Redstone, backed into film production after creating a large New England theater chain. Leonard Goldenson also went from the perch of a theater chain to run ABC television for 35 years. He was well into his 80s once it was spun off from RCA. David Sarnoff helped launch NBC, leading it and parent RCA for almost 50 years, retiring at age 79. He died a year later. William Paley built up CBS over a 60-year reign, stepping away from the business at his death at age 89. He regularly undermined successor candidates until then.
In finance, J.P. Morgan presided over his firm—and the U.S. financial system—until his death at age 76. Robert Lehman led the original Lehman Brothers for over 40 years. Siegmund Warburg built and ran S.G. Warburg for over 30 years. André Meyer ran Lazard Frères for 35 years, until his death at age 80. Robert Fomon ran E.F. Hutton for 17 years until he was forced out in the aftermath of a scandal. Lehman’s Richard Fuld was the longest serving CEO on Wall Street at the time of the firm’s collapse. He managed to blame a series of lieutenants for the firm’s failing health.
Strong lieutenants are often undercut, if not ousted, as they can be viewed as threats. Sandy Weill rolled up scores of financial institutions, terminating threatening heirs for over 40 years and resisting board efforts to clarify a succession plan for Citigroup. He pushed out such accomplished candidates as Peter Cohen, Jamie Dimon, and John Reed. One prominent board director, former Colgate CEO Reuben Mark, courageously quit the board in public protest over Weill’s imperial style.
In retail, 78-year old L Brands founder Leslie Wexner has led his fashion enterprise for 53 years with no identified successor. American Apparel’s irreverent founder Dov Charney oversaw all key decisions in branding, marketing, design, and manufacturing for 25 years until he was ousted in 2014. This was only after more than four years of quarterly losses, a once high-flying stock collapsing to penny stock range, and a tidal wave of sexual harassment lawsuits. Innovative, politically charged Whole Foods founder John Mackey has served as CEO for 38 years. William Black, the founder of Chock Full O’Nuts, the nation’s first coffee house chain, continued to run the company from his Massachusetts General Hospital bed in 1983, at age 85 for the last two years of his life, with his physician functioning as … chief “operating” officer.
Confusion around King Sumner
These succession sagas were easily as ferocious as is the current battle at Viacom. This past week, Redstone removed Viacom CEO Philippe Dauman and George Abrams, longtime Viacom board member, as members of his trust, which controls Redstone’s ownership of National Amusements which, in turn, owns 80% of Viacom and CBS. Dauman and Abrams expressed shock and outrage at the decision, claiming that the re-staffing was inconsistent with Redstone’s past conduct and that he must have been manipulated by his daughter Sheri.
Dauman and Abrams might be disappointed but they shouldn’t be shocked. First, look at Dauman’s performance. Despite being one of the highest paid execs in the nation (earning $85 million a year between 2011 and 2015), Viacom’s stock price is down by 50%, the cable channels have become creatively stale, the legendary Paramount studios is all but moribund, and he presided over missed bargain price investments in hot new media properties like Vice. Second, over the past few decades, Redstone, as a monarch CEO, has forced out such highly regarded prospective successors as Frank Biondi, Jonathan Dolgen, Mel Karmazin, and Tom Freston. These leaders served Redstone for decades before their termination. Dauman’s situation differs only in that he was overshadowed by the track record of such accomplished predecessors.
It is ironic that Dauman now questions Redstone’s mental competence when, just months earlier, he gave sworn testimony in defense of his alertness. This was in regard to allegations of incompetence from a recently dumped former Redstone girlfriend. Now that he faced removal from the trust, Dauman changed his opinion about Redstone’s competence.
Forever Young? When New Media Moguls Grow Old
A decade ago, Apple allowed similar denial of a leader’s mortality. Through Steve Jobs’ direction and a compliant board, the investing public, employees, and customers were misled regarding the actual condition of Jobs’ health. Missed engagements, weakened appearance, and other concerns were written off as “a bad bug,” hormonal imbalances, or medication side effects, delaying the revelation that Jobs’ pancreatic cancer had returned.
Jeff Bezos has led Amazon for 22 years and seems to be in no hurry to depart. The public offering registration terms of new media titans such as Facebook’s Mark Zuckerberg and Alibaba’s Jack Ma virtually ensure that they too can serve as emperors for life, should they so choose – as Steve Jobs advised them. Tech titans such as the late Andy Grove of Intel and Bill Gates of Microsoft show us that it is possible to succeed the corporate legend, but their companies did not have the protective corporate charters of Facebook or Alibaba.
What happens to Bezos, Zuckerberg, and Ma in their later years if they cannot be overruled by a board? Redstone’s only concession to aging was the shield of a trust to ensure his interests were protected. Yet that device was still evidently vulnerable to controversy. The brazen vanity of youth deludes some into thinking we will never grow feeble and susceptible to the exploitation of others or our own fading clarity.
Yet even Dick Clark, “America’s oldest teenager,” eventually grew old. Groucho Marx was apparently the victim of abuse in the final years before his death at age 86. As a young man, though, Marx naively proclaimed, “Age is not a particularly interesting subject. Anyone can get old. All you have to do is live long enough.”
Acting Your Age: Patience and Generosity
We can appreciate that forcing people out of professions they love at an arbitrary age is wasteful and unjust. The current crop of U.S. presidential candidates is the oldest in American history. Many professional service firms used to expect partners to leave at age 55, as did great enterprises, from IBM to UPS. Clearly, we have reset our schedules in life with diminishing age bias and appreciation of the value of wisdom with experience. Financier Maurice Greenberg of AIG and now CV Starr is as sharp and energetic at 91 as he was at 32, traveling the globe and building new insurance businesses. We are reminded of such continued vitality in the inspiring career of CBS 60 Minutes TV correspondent Morley Safer, who continued to deliver powerful original reports until age 84, dying just one week after he retired.
I used to introduce Albert H. Gordon, the great patriarch of Kidder Peabody, as “my oldest friend” because he was. He died at 107 and three-quarters in 2009. (Toddlers and centenarians should be allowed to count the fractions). At age 82, Gordon was still running marathons, reread Anthony Trollop’s Victorian-era novels, and studied new languages and mathematics. And he continued to work as a financier for another 25 years.
Gordon was born the year President McKinley was assassinated. He knew Civil War generals from both sides and lived to see President Obama take office. There were 1,300 cars on the road when he was born, but neither Chrysler, Ford, nor GM existed. He worked with financial legends such as J.P. Morgan Jr., Robert Lehman, Mortimer Schiff, and Sidney Weinberg, and he also knew today’s legends, such as Jamie Dimon, Lloyd Blankfein, and Steve Schwarzman.
Gordon loved his profession and rebuilt Kidder into a global powerhouse. He stepped in to save Kidder Peabody from certain collapse in 1931 at the age of 29, building the company into the second strongest investment bank. He anticipated the crash of 1929 and cleared out of the market months in advance, much the way he did 79 years later. His investments were up 15% in the terrible 2008-2009 period.
Gordon was also a generous, patient leader. He explained that after he stepped away from management and sold back his controlling shares to his employees, “In Kidder, anybody that has an ounce of productive capacity, as measured by the bottom line, does not have to retire. It is necessary, however, to give leadership responsibility to other people so that they can learn.”
Sadly, Gordon’s later successors did not follow his lead. The firm lost its footing and was absorbed into other banks. Gordon’s wisdom also seems to be missing among those involved in Viacom’s saga. Leaders must reinvent themselves and not atrophy in their executive chairs. Their immortality must come through the legacy of their contributions, not the length of their tenure. Boards, advisors, investors, and friends must have the confidence to confront and guide charismatic “Monarch” CEOs while looking out for those who prey on vulnerable leaders who begin to sense their mortality.
Ray Davies of the Kinks sang in his song Celluloid Heroes:
“Everybody’s a dreamer, everybody’s a star.
And everybody’s in movies, it doesn’t matter who you are…
I wish my life was a non-stop Hollywood movie show, A fantasy world of celluloid villains and heroes.
Because celluloid heroes never feel any pain,
And Celluloid heroes never really die.”
Jeffrey Sonnenfeld is Senior Associate Dean for Leadership Studies at the Yale School of Management and Lester Crown Professor of Management Practice as well as author of The Hero’s Farewell (Oxford University Press).