Monday, April 15, 2024

Is a CEO a Failure When He Does Not Have a Successor?


These are thoughts I had at the end of 2023.  I had them because Morgan Stanley was an under performer in their industry.  

Now that Ted Pick is CEO of Morgan, we will see if he is able to keep pace with his industry in a way the former

CEO, James Gorman did not.  Pick has been CEO of Morgan Stanley since January 1, 2024 and Gorman has become the Executive Chairman.  With that said, let’s explore the thoughts I had about Gorman’s last days.  

Since 2010, James Gorman has been the CEO of Morgan Stanley.  As this quarter’s earnings hit the streets, it is needless to say the market is very disappointed.  In addition, the board is ready to replace Gorman.  However, they have not found a successor to take his place.  That only exacerbates the disappointment. 

Over a 13 year period, Gorman has had ample time to coach someone up to fill his shoes.  In fact, it is wise for a CEO to start seeking his successor on day one of his job.  Needless to say, Gorman has not done that.  

One job of the CEO is to lead the enterprise.  The other is to create other leaders under you.  This is critical as the organization grows.  It allows the CEO to delegate important responsibilities to their direct reports who in turn will delegate to their direct reports.  When this is not done, the CEO can become overwhelmed, opportunities are missed and corporate growth suffers.  

When you compare Morgan Stanley to their competitors, they are the only ones showing significant slowing in growth, especially in wealth management services.  

While Ted Pick has assumed the role of CEO at Morgan Stanley, placing the former CEO, James Gorman in the position of Executive Chairman could possibly undermine Pick.  Staff and management may still view Gorman as the one in charge.  This could deflate Pick’s power to drive new ideas.  

What do you think?  I would love to hear your feedback.  And I’m open to ideas.  Or if you want to write me about a specific topic, comment through my blog:  

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