Here’s what it means for a company when its founder takes a step back.
Amazon CEO Jeff Bezos announced on Tuesday that he will be stepping down as the CEO of the online retail empire he founded in 1994 and evolved into one of the world’s most valuable technology companies.
Andy Jassy, a long time lieutenant of Bezos and CEO of the company’s booming cloud business, will replace him in the third quarter of 2021. But that doesn’t mean Bezos is done with Amazon; he’ll be stepping into a new role as executive chairman that will involve weighing in on big-picture decisions like product strategy and new projects.
If that sounds familiar, it should. Bezos is officially a member of the club of elite tech founders who have moved on from their role as CEO to focus on steering major strategic decisions and other grandiose projects.
When Larry Page and Sergey Brin officially stepped down from their respective roles as CEO of and president of Google parent Alphabet, they wrote that it was time for them to assume the role of nagging parents, offering advice and love but not daily nagging!
Bill Gates, the billionaire philanthropist and cofounder of Microsoft, said that he relinquished his CEO title back in 2000 to return to what he loves most: “focusing on technologies for the future.
And now Bezos is transitioning from CEO to an executive chairman role that will allow him to focus on early initiatives and new products, while also freeing him up to focus on his other passions like Blue Origin and The Washington Post.
Being the CEO of Amazon is a deep responsibility, and it’s consuming, Bezos wrote in a letter to employees announcing his transition. “When you have a responsibility like that, it’s hard to put attention on anything else.
Bezos’ move means few of the biggest United States-based technology companies are still being run by their founders. Of the FAANG stock companies, an acronym that refers to tech giants Facebook, Apple, Amazon, Netflix, and Google, only Facebook and Netflix still have founders in a CEO role. The case is the same with the Big Five tech companies — Apple, Amazon, Facebook, Alphabet, and Microsoft. Only Facebook still counts its founder as its CEO.
There’s a reason why major tech companies tend to follow this pattern, according to experts. For one, when you have a CEO that’s come to be known as an iconic visionary like Bezos, the prospect of losing his involvement would surely spook investors and just about every other firm or institution that relies on the company in some way. It also gives Bezos the opportunity to steer the company at some capacity and remain in the spotlight to some degree while Jassy gradually becomes the face of the company.
You want to go out on top, you want to go out when things are going really well, David Yoffie, the Max and Doris Starr professor of international business administration at Harvard Business School, said to Insider. And you hand the reins to a successor who can build on the momentum that you’ve established.
After the news of Bezos’ transition broke on Tuesday, Amazon was quick to clarify that he will still be playing an important role in the company. As executive chairman, Bezos will be involved in one-way door issues, Brian Olsavsky, Amazon’s chief financial officer, said during the company’s fourth-quarter earnings call on Tuesday. That term refers to critical decisions like acquisitions, strategy, and the decision to move into new markets like the grocery business, Olsavsky said during the call.
Bezos will still be a big part of Amazon’s future
This type of transition also suggests that we shouldn’t expect any major shifts in Amazon’s general strategy and direction just because Bezos is no longer at the helm.