Key Takeaway
In the last 6 months alone, we’ve seen senior level executives exiting major global companies at a staggering rate. From GE to Oracle, Tesla to Deutsche Bank, there is a rising trend of out-with-the-old – some after just a year on the job – as investors continue to demand real change on tight timelines.
Job listings and open positions are fantastic indicators of a company’s intention to invest in particular skillsets or departments, looking several months down the road. Hiring financial professionals with public company expertise, for instance, is a great indicator of a brand’s intention to go public. Bringing in engineers with unique expertise can indicate a shift in product strategy.
Turnover at the senior executive level, however, is also a major signal of a company’s performance and focus. Constant changes in leadership can indicate turbulent times. Looking at financial performance and key partnerships alongside changes in management can reveal where a company is really struggling or succeeding.
Over the last few months, there have been several notable changes in senior leadership at some of the world’s biggest companies. Here’s a look at who’s turned over and where those in the industry should be looking out for coming indicators.
1. Instagram co-founders Kevin Systrom and Mike Krieger exit Facebook
Systrom and Krieger are the 8th and 9th senior level executives to leave Facebook this year, amid its most turbulent times to date. Others include WhatsApp founder Jan Koum, head of communications and public policy Elliot Schrage, and former chief security officer Alex Stamos. According to CNBC, as a company that always prided itself on retaining top talent, this may signify declining trust and potential discord with other senior leadership.
Following the departure of Systrom and Krieger, Bank of America noted that this may leave room for Facebook to double down on monetization strategies for apps like Instagram.
Also notable is where these executives are going as this indicates which competitors are looking out at potential poaching opportunities. Communications executive Rachel Whetstone has joined Netflix, while head of news products Alex Hardiman has joined The Atlantic.
2. GE CEO John Flannery out after less than 1 year
Flannery was brought in less than a year ago with the sole purpose of turning around the organization following its steady decline under previous leader Jeff Immelt. The board was watching with bated breath, and less than pleased with the time it’s taken to make progress. As well, according to Quartz, “It didn’t help Flannery’s case that the GE Power division had badly misjudged demand for its products, contributing to a $23 billion write down.” This has led to a quick change, replacing Flannery with H. Lawrence Culp Jr., a member of the GE board since April and former CEO of Danaher Corp, which seems to be appeasing shareholders.
The element to note in each of these announcements is of course how Wall Street responds. Often when executive turnover is unpredictable, as in this case, it’s met with suspicion and a drop in confidence. For GE, however, the resounding applause indicates this was the right move for the struggling firm, with shares soaring 12.7% an hour after trading opened following the announcement.
3. Oracle’s Product Chief Thomas Kurian resigns
Oracle’s Thomas Kurian, the company’s head of products and Larry Ellison’s technical right hand man, resigned after several decades at the company, reportedly following a falling out he had with Ellison over the direction of the company’s cloud infrastructure.
This particular clash is concerning as it indicates internal disagreement over the strategy of one of the most influential tech companies in the world.
4. Pfizer CEO Ian Read to retire
Another long-standing leader, this time at pharmaceutical company Pfizer, has announced plans to step down by the end of the year. He will be replaced by the group’s COO, Albert Bourla, who has been leading the firm’s highly successful Innovative Health business.
The firm announced this will be part of a multi-year succession plan, which indicates a strategic shakeup. Appointment of Buorla as its new leader indicates a strategy focused on tech and innovation in the coming years.
5. Senior executives exit Deutsche Bank by the dozen
It’s no secret that Deutsche Bank has been struggling as of late. The bank has experienced turnover in senior leadership across the globe, most recently with the departure of it’s chief dealmaker and chief operating officer in Japan, following appointment of new CEO Christian Sewing and departure of Japan chairman Norimichi Kanari.
Earlier this year, Charlie Dupree, head of M&A for Deutsche in America, left for JP Morgan, and CEO John Cryan was ousted by the board as the bank struggles to recover with legacy issues from its past and operations across markets continue to struggle.
6. Elon Musk removed from Tesla board, remains CEO
Elon Musk’s public downfall has been a wild ride, to say the least. His active Twitter account has been responsible for massive swings in share price due to a single line of text. The Wall Street Journal has dug deep into the psyche of his Twitter habits, comparing him with other CEOs and digging into the impetus for his responses.
When Musk falsely claimed intention to bring Tesla private, however, setting off a flurry of responses on Wall Street, the SEC stepped in and recently removed him as a board member. He has remained CEO, however, in a move that seems to appease shareholders despite his actions.
Shareholders, investors and competitors alike are impacted by changes in leadership at major companies and how these changes play out in the market. How might their strategy differ, however, if they were able to predict these changes, and observe them in real time?
Forward-looking indicators discovered via Outside Insight – from declining financials, to negative customer sentiment, to legal issues and policy concerns – can point to changes in leadership that might be coming and how this will be perceived publicly. This can help them better prepare for the way this might impact stock price, company strategy and next steps, leading to better, more informed decisions.
