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Amazon executive Dave Clark was the perfect candidate to run freight start-up Flexport. After building up a trillion-dollar company’s logistics operation, he should have had no problems expanding an $8bn start-up. But after one year, Clark is out and Flexport’s founder Ryan Petersen is back in the top job.
Clark was focused on taking a larger share of the $140bn freight market. But growth has been difficult this year. Freight rates have fallen as spending has shifted from ecommerce to hospitality.
However, the CEO switch may also illustrate the difficulty some bosses have with letting go. In the tech sector, where founders are venerated, company creator comebacks are particularly championed. Steve Jobs’ successful return to Apple is often invoked. Reddit co-founder Steve Huffman came back as chief executive in 2015 and is now expected to lead the company to an initial public offering.
But stability and deep knowledge of a company can come at the expense of new ideas. Superdry co-founder Julian Dunkerton has failed to make the retailer fashionable since returning in 2019 and is now overseeing a stream of profit warnings. Disney’s share price is down more than a tenth since Bob Iger returned with a plan of cost cuts. Twitter co-founder Jack Dorsey failed to solve its moderation and profitability problems when he came back. At Starbucks, Howard Schultz ended his third stint as chief executive in the midst of a fight with employees seeking to unionise.
Ousting new chief executives and reinstating old bosses can make companies look weak. It indicates lack of planning, over-reliance on one figure and the inability to evolve. Part of the problem may be the determination of long-term CEOs to keep an eye on the business. Iger remained Disney’s executive chair after stepping down as CEO and is reported to have kept his office. Peterson also moved to an executive chair role after handing his Flexport job to Clark. Letting go is difficult if you never truly leave.
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