There is a lesson in the all-around thrashing Steve Ballmer has received in recent days about filling the shoes of the greats: don’t.
Anyone who succeeds one of the greats -– be it Bill Gates, Steve Jobs, Jack Welch, Peter Lynch, Warren Buffett, Michael Jordan or Peter the Great -– is likely to suffer by comparison. As general career advice, there is more downside than upside to following a legend.
You may be as or even more skilled than the superstar you’re following, but they also likely had both good luck and timing on their side. The tailwinds that favored them probably won’t keep blowing for you. Nothing lasts forever. The rules change. The great bull market eventually comes to an end. Low draft picks erode your bench. The competitors keep coming and coming, and unlike you, they often have nothing to lose. The window for breakthrough innovation in your industry may not stay open 24×7. Cambrian explosions can be followed by long periods of unpunctuated equilibrium. No small part of becoming a legend is successfully getting out on top (cf. Michael Dell).
And your predecessor’s success increases degree of difficulty you face. It sets expectations for your performance, yet there are real diseconomies associated with success. You get to defend the substantial realm your predecessor built. That scale and scope of success brings complexity. You inherit a valuation that presumes your future trajectory; you really only can screw it up. Sheer size means you move markets. Opposing teams always get up for the game when the defending champions come to town, even if there have been roster changes. The key lieutenants who had the legend’s back may decide it is time to enjoy their rewards. You’re an easy target for populists, contrarians and anyone who wants to stick it to ‘the man’. The press, who first build you up, inevitably get bored and will decide it is time to tear you down. A government or two may shake you down for campaign contributions, directly or indirectly.
A big part of Steve’s problem is he isn’t Bill. He’s had to manage the house that Bill built in the face of unprecedented government assault, the complete collapse (and rebirth) of the tech sector and try to keep up with, much less stay ahead of the incessant march of technology. Steve is a amazingly successful and accomplished guy, contrary to what you may conclude from the twenty-something blogger consensus this week. It isn’t clear anyone, including Bill, could manage the sprawling empire that is Microsoft today or have maintained Microsoft’s dominance in the serendipitous world of technology up to the present day. I wish Steve’s last move had been to break the company up (and frankly, there is still time for that). It would be better for the company and for his legacy.
But it isn’t just Steve who has this problem. Tim Cook is experiencing all the joys of not being Steve Jobs. Ballmer’s buddy Jeff Immelt soldiers on at GE, having started at a similarly awkward time of high valuations (GE has dropped a couple hundred billion in market cap on his watch). Peter Lynch’s Fidelity Magellan Fund, where at least the first couple managers to follow Lynch made headlines, is largely forgotten today. And I won’t invest any money with whoever eventually takes the reins from Warren Buffett (whose own best performance came when he was investing much much smaller amounts). Pete Myers, of course, had a career year and lead the Bulls to a 55 win season after MJ retired (the first time), but the Bulls didn’t win another championship. Peter the Great continues to cast a long shadow unbroken by any Russian leader in the ensuing centuries (except maybe Stalin, but he was more from the Ivan the Terrible school).
Mean reversion is a bitch, and mean reversion from an extreme outlier can be even more painful. Put another way: bet against the guy who comes after the legend.
Note: I leave Larry Ellison off this list of examples. Due to the fact he intends to live forever, he will spare any successor the ordeal of following him.