Founder Likes the Way His Succession Looks
George Zimmer, who founded The Men’s Wearhouse in 1973, plans to
step down as president and chief executive officer in mid-2011. Under the succession
plan, he will be replaced by Doug Ewert, its president and COO.
Focusing on
bringing value to tailored clothing, Zimmer, 62, built the company to more
than 1,200 stores in the U.S. and Canada under three distinct banners: Men’s
Wearhouse, Moore’s and K&G. To the public, he is best known for his
role in the retailer’s television commercials, marked by his tagline, "You’re
going to like the way you look. I guarantee it." He will continue as chairman
and the public face of the chain.
Mr. Ewert joined Men’s Wearhouse in 1995
when the retailer had 278 stores. In 1999, he became vice president of merchandising
and, in 2001 became executive vice president and general merchandise manager
of all retail brands. He became chief operating officer in 2005, and added
the president’s title in 2008. The chief operating officer position will not
be filled.
Mr. Zimmer said in the statement, "For the past 37 years, I
have emphasized that continuity and culture are a vital part of our ability
to serve customers. This orderly approach is designed to enhance both continuity
and culture. I have worked very closely with Doug for over a decade and anticipate
that we will continue to work closely together on a smooth transition during
the coming year and beyond."
The company noted that the change comes as
Men’s Wearhouse was named to this year’s Fortune 100 Best Companies to Work
For list.
In an interview with the Houston Business Journal, Mr.
Zimmer added, "I
have said to my own people over the decades that I would like the company
to survive at least 100 years. That means it has to go way beyond me and my
family. I’ve been doing this almost 38 years, and Doug is 15 years younger
than I am. I actually have my eye on Doug’s replacement, but only very
faintly, because I want him to make that call."
Discussion Questions
Discussion Questions: What does a retailer risk losing when its founder steps down? What’s the key to the successful succession plan for a founder?
As George Zimmer, seeking a 100-year company dynasty, might say, “You will like the way Men’s Warehouse looks when Doug Ewert runs it. I guarantee it–I’ll be the Chairman.”
A retailer risks losing consistency and the culture. Depending upon the choice in replacement, the company could take a “tailspin.” In this case, the founder has been grooming the successor for years, therefore it is a safe bet that the impact of a replacement will be minimal. In very few cases this happens. In many cases the new replacement wants to change everything including the culture; that’s where you see a lot of negative impact. The key is selection of the replacement as a natural fit to the culture and the vision.
Do founders ever really ‘step down’? That’s kind of like your dad stopping being your dad just because you turned 40. Does that ever actually happen? Mmmmmm…no. Especially if that founder is going to stay as the icon and public image of the business. It’s more of a ‘stepping slightly to the side’ which in some cases like this one is probably the best of both worlds.
It appears that George Zimmer has taken a look at other company owners’ departures and decided he doesn’t like what he sees. The continuity that he anticipates can be expected because of his planning, his training and his sincere interest in the success of his company beyond his lifetime. It’s no wonder his company is considered one of the best to work for.
There are many instances of company owners selling their companies and selling out. Some have the opportunity to buy back the company at a reduced price because of how poorly it’s been run.
The transition from the founder to the next generation running a business is always tough. The founder not only brings experience, but more importantly the vision, inspiration and drive to the business that motivates employees and customers. Those qualities are not easily replaced.
A good example of a transition gone bad is Harley-Davidson. When the family sold the business to AMF the new owners quickly killed the company culture and drive for perfection and quality. Thankfully 13 members of the management team (including members from the Harley and Davidson families) that were no longer with the company came back and purchased the business back from AMF. The rest is history. Harley-Davidson focused once more on quality and went public a few years after the repurchase of the company. Some companies and brands are not so lucky.
The Men’s warehouse transition looks like it is going to be smooth. Clearly Mr. Zimmer has been thinking about this transition for years and handpicked someone Mr. Zimmer believes will keep his values and passion for the business intact.
I wish Mr. Ewert much success in his new role. He certainly has big shoes or in this case, a big suit to fill.
From the outside looking in the biggest risk about George Zimmer stepping down is in marketing and advertising. He is clearly the spokesman, the icon, and the face of the company’s enormously successful ad campaign.
The real risk in the succession of a founder depends on the founder. The founder is the heart of a company, it was his/her passion that brought the company to life. In some regards, he/she IS the company. Finding an able, competent replacement who shares the vision and passion for the company is a challenge. After all, the replacement is taking over the founder’s baby. Too often, the founder surrounds him/herself with people that agree with him/her, but aren’t strong enough to replace him/her.
The beauty of MW is that it has a simple, clean value proposition. It delivers on what it promises and does it in a highly profitable manner. The fact that Mr. Ewert has been with George for 15 years would indicate that he has demonstrated to George’s satisfaction that he is trustworthy. The fact that the company has grown 4X while he’s been there would seem to indicate he has the competence.
My guess is that this transition should be trouble-free.
Historically, business flounder when the entrepreneurial founder leaves control to the next generation of managers. Even Apple took a hit once upon a time when Steve Jobs left (for other than health reasons) but quickly responded upon his return.
Entrepreneurs are unique businessmen and not common in the management population. Entrepreneurs and managers are very different people, with different perspectives and different objectives. There is no doubt that Men’s Warehouse will lose a step, not because Mr. Ewert is less than a talented manger, but because he is not George Zimmer.
When the founder steps down it can be both good and bad. Some founders stay too long. The company outgrows their capabilities. For the more successful companies, when the founder steps down, two things can occur. The company loses its passion. The founder’s drive, vision and soul is wrapped up in the company. When a number cruncher takes over, the passion for the business walks out the door.
The second thing can be the culture. A company culture comes from the top. Sam Walton created an unbelievable company culture. With each succession in management, the culture changes some and herein is the risk.
I think Ian has captured the answer. George is leaving, but as the old song reminds us, “goodbye don’t mean I’m gone.”
That said, turning the reins over can either be a good or a bad thing but, if the company is to survive, it is an inevitable thing. Zimmer wants his company to last for over a century and it’s unlikely he can run it for the next 65 years himself.
So, the two key words in the article are succession and planning. Most retail founders have a difficult time thinking that the company can survive without them but sometimes the founder becomes a critical impediment to growth.
Sooner or later all businesses reach a plateau, and managing through a plateau, or expanding a business internationally or even radically reassessing a format often require different skills than establishing and building an enterprise.
Will George “like the way it looks” ten years from now? Only time will tell, but at least it looks like he’s smart enough to be able to think about a future he’s not a part of, and that’s a start.
I’d like to think that Mr. Zimmer’s successor has been instrumental in building the company over the past 16 years, and has also had plenty of time to absorb (and put his stamp on) the company culture. Given this fact, odds are good that there will be a smooth transition. Only curious part of the remarks: That Mr. Zimmer already has his eye on the new CEO’s successor! Maybe less than a full vote of confidence, after all.
There are a lot of companies who have survived, and in fact prospered once their founder stepped down or left the position (Walmart, McDonald’s, Domino’s), and there are others where the succession did not work (Starbucks, Wendy’s, Gap).
George Zimmer has a lot of case studies from which to learn, and having met him personally, I think he will do a great job at transitioning the company.
A founder’s vision and passion are the forces which drive an entrepreneurial company. When a company begins the transition from an entrepreneurally managed company to a professionally managed company, it’s that vision and passion that are often most difficult to sustain. It’s a natural part of the life cycle of a company.
Companies that make the transition successfully remain vibrant and innovative, through engaged, far-sighted management. That will be the challenge for Mr. Ewart. The challenge for Mr. Zimmer will be to allow Mr. Ewart the space to make the transition.
This is a good example of George Zimmer’s perspective. Unfortunately, he is not stepping down, but simply changing his position. Until this company has a hands-free president and CEO, we will not really know the impact of an organization that can be run without George Zimmer. This is true for many companies that still have “ties” to the founders in one form or another.
Sorry folks, but founders DO leave eventually, even if it’s only through death; and while I might be willing to go along with the idea that “the body is gone but the spirit remains,” unless boardrooms now include a ouija board as standard equipment, some more tangible form of succession planning is necessary. But will it work? It can: Macy’s, Chanel and Sears (until recently, at least) all prospered after the individuals passed on; but of course there are thousands of firms–whose names we no longer recall–that essentially died with the founders. That Mr. Zimmer is a very public face for MW complicates the task. I wish them well.
What’s at risk? EVERYTHING.
What can they do in preparation? Select someone that is not adverse to being ‘led’ in the role by the ‘original’.
The problem is the ‘new’ leader always is eager to make their own mark and be ‘different’.
So in short–everything is at risk no matter how well planned.
The ‘third tier’ is even riskier.
Years ago I phoned the Men’s Wearhouse HQ and was surprised to hear George Zimmer’s recorded voice on the other end. Will he be allowed to age, or will he remain timeless, as Colonel Sanders does on the KFC chicken bucket?