Lessons from the departure of the BMW boss

By Jo Whitehead *

(exechange) — August 1, 2019 — One might feel sympathy for Harald Krüger, who just exited as BMW’s boss. The industry faces a shift to electric cars, and reports suggest that BMW has fumbled the job so far — but it was a tough challenge.

In our research into 10 years of corporate stumbles (in which the CEO leaves under a cloud after a significant drop in share price), almost 20% of these cases were due to failing to deal with an unavoidable, major innovation or repositioning.

Examples include multiple CEOs at Nokia, Yahoo, GlaxoSmithKline, EBay, Carrefour and Intel. You might think it was just bad luck that those CEOs were being punished but on closer examination, they typically lacked key capabilities. Industry experience by itself is not enough.

For example, Olli-Pekka Kallasvuo had been with Nokia for 30 years when he became CEO, but he had been educated as a lawyer and spent most of his career in finance. He might have been a good CEO for business as usual, but an engineer with experience in high-tech product development might have had a better chance.

Boards facing such challenges might do well to examine these cases further!

* The writer is a director of Ashridge Strategic Management Centre and currently researching why companies and CEOs stumble. Jo.whitehead@ashridge.hult.edu.

Editor’s note: This is a guest post.