1. Michelle Rhee (Chancellor): Washington, D.C. Schools
A decade into the “No Child Left Behind” policy, the U.S. ranks 21st, 23rd, and 25th, respectively, in reading, math, and science worldwide. Former Washington D.C. schools chancellor Michelle Rhee fought to reform a public school system littered with turmoil. In her first two years in office, she achieved the largest test results gain with districts that ranked at the bottom of U.S schools.2 Her resignation came shortly after D.C.’s mayor, Adrian Fenty, lost in the primary race. During a time when the U.S. education system is criticized for lacking intellectual competiveness with countries like China and India, does Rhee’s resignation symbolize a deeper problem of our nation’s culture of educational leadership? Is the U.S. quitting on good teachers and, in a sense, choosing tenure over students? Though she’s left the D.C. school system, Rhee started StudentsFirst, a not-for-profit “movement to transform public education”. Rhee believes she can better affect change from outside the system. However, having seen positive results from her reforms and knowing what is possible, D.C. students remain in a transformation left unfinished.
2. Simon Cowell (Judge): American Idol
Simon Cowell, the caustic yet irresistible judge with acerbic wit and a penchant for uncomfortably snug V-necks, departed American Idol after 9 seasons. It marks the end of an era for the series as Cowell, there since inception, led its unprecedented six consecutive seasons as the #1 show on television. Once described as “the most impactful show in the history of television,”3 a brief listen to radio today testifies to how its participants dominate the pop music and country charts. The divorce is especially ill-timed, as Idol’s ratings have declined in recent years - a symptom of an organization not fully understanding the product it delivers. Will an average 30 million viewers/night continue to tune in for music without the wit and V-necks? You be the judge. Simon departs to produce and judge the US version of The X Factor, a British talent show that he also created. A revamped panel of judges will include Jenifer Lopez and Steven Tyler (of Aerosmith), but they will have a hard time fitting into the tiny T-shirt left behind by the singular jury and executioner that was Simon Cowell.
3. LeBron James (Forward): Cleveland Cavaliers
Possibly the NBA’s biggest star today (and drafted straight from high school), LeBron James, took the Cleveland Cavaliers to their most winning seasons and the NBA Finals for the first time in franchise history. He was a known high performer at the peak of his career, so what did the Cavaliers do to retain their top talent? Not enough. On July 8th, only minutes after informing the Cavaliers, James announced his 6’8” stature would fill a new #6 jersey to play for the Miami Heat. The criticism surged like the rising tides of a Miami hurricane. Cleveland fans burned James’ jerseys while Dan Gilbert, the majority owner of the team, publicly denounced his former player for his “cowardly betrayal.”4 Truly cavalier in nature, wall graphics of LeBron were reduced in price from $99.99 to $17.41 (Benedict Arnold’s birth year). In the wake of LeBron’s departure, Gilbert fired the head coach, and the general manager resigned. The Cavaliers went from a championship contender to losing 19 of their first 26 games. In a case where everyone lost, both Gilbert and James’ poor handling of the situation before, during, and after, illustrates how quickly ego gets in the way of creating the win-win.
4. Ko, Patel, Pitaro, Schneider, Siegel (Executive Top Talent): Yahoo
Yahoo has been unable to stop the bleeding from previous wounds (they are the first organization to repeat on the Biggest Quits list, see 2008). While CEO Carol Bartz re-focuses Yahoo on its core businesses, the company struggles to re-secure its footing against Google and Facebook.5 An unprecedented FIVE high-ranking executives departed in 2010. Even if we consider that “fresh minds” are needed, a sudden top-heavy migration would leave any workforce to wonder “Who’s next?” and “Where are we going?” The departures included Hilary Schneider (EVP Americas) and Jimmy Pitaro (VP Media) who joined Yahoo in 2001 and was influential in launching Yahoo News, Finance, and Sports. Also leaving were David Ko (SVP Audience, Mobile & Local businesses) and Srinija Srinivasan, former VP and editor-in-chief, with Yahoo since the beginning and instrumental in transforming Yahoo from a web directory to a search engine platform that dominated web search in the late 1990s. Finally, Yahoo lost Ash Patel (EVP, product architecture & strategy), with Yahoo for 14 years and responsible for the architecture of MyYahoo, Finance, Messenger, and Chat.6 With the rapid flight of its top executives, it may take a miracle to see the once-leading Internet giant soar again.
5. Joel Ewanick and Chris Perry (VP Marketing, VP Marketing): Hyundai
Picture it: Hyundai 1998. Can’t? That’s how important these two were. Ewanick was named CMO of the Year by Forbes in 2009, Grand Marketer of the Year by Brandweek, and Marketer of the Year by Advertising Age. Ewanick, during his 3 years at Hyundai, is credited with catapulting Hyundai into the top rank among the big players in the U.S. auto market. Poached by Nissan in March 2010,7 and six weeks later stolen by General Motors to be their VP of US marketing, Ewanick was recently promoted to Global CMO of GM.8 Despite being promoted to Marketing VP, 10-year tenured Chris Perry followed swiftly on Ewanick’s heels to join General Motors. Perry and Ewanick were instrumental in recreating Hyundai’s brand image and launched the Hyundai Assurance Program in 2009, which doubled the percentage of U.S. consumers willing to consider buying a Hyundai.5 Hyundai achieved its highest market share ever in August, 2010. Now it may find itself running out of fuel as Nissan is charged up and their top marketing talent went to direct competitor GM.
6. Fareed Zakaria and others (Editors/Editors-at-Large): Newsweek
In August, Newsweek’s best-known columnist, Fareed Zakaria, followed many of his peers in exodus, including former Editor and Pulitzer Prize bestselling author Jon Meacham, Evan Thomas (Editor-at-Large), and Michael Isikoff (a leading investigative journalist). Unlike the others, in a never-pleasant-watercooler-moment, Zakaria revealed he would join Newsweek’s direct competitor, Time. Zakaria said his weekly program on CNN (also a Time Warner subsidiary) with new Editor-at-Large role at Time consolidates his pursuits for greater synergy. He left shortly after Sidney Harman bought Newsweek for a reported $1, which won’t get you a bagel near Time Warner’s New York City headquarters. Newsweek fought all year against the print industry’s slip from relevance. In this case, the impact of these big quits may be the end of the 78 year-old American institution as we know it. Unable to compete with the digital era, and with less talent driving content, it “merged” with The Daily Beast, a 2 year-old news reporting and opinion website. The coupling was the magazine’s only bet to keep afloat, allowing it to access 5 million readers online.9 By the end of 2011, we will likely know the answer: “Was The Daily Beast Newsweek’s sail?” or “Was Newsweek The Daily Beast’s anchor?”
7. Ronald Shaich (CEO): Panera Bread
Who’s got your focaccia? Starting in 1981, co-founder Ronald Shaich baked himself a 1400-plus chain of stone-milled success. Shaich intends to contribute to the world beyond Panera. Bill Moreton, the co-chief operating officer since 2008, will replace him. Shaich will become executive chairman of the board, and will oversee strategic initiatives at the company.10 Even staying involved, a founder’s departure is like no other. As the genesis of an idea, a vision, and a culture, a unique bond exists between a workforce and the company’s creator. Every other employee shares an implicit understanding that the founder likely walked in their shoes at some point. No one touches more people or is more directly responsible for the passion to overcome obstacles than the one who proved it could be done. He leaves a long line of restaurant awards and distinctions from Fortune, BusinessWeek, and others. Shaich represented opportunity and delivered success in a very competitive and difficult market. The next phase is an organization’s hardest and Panera’s recipe for success will be put to the test.
8. Rahm Emanuel (White House Chief of Staff): Obama Administration
The single most significant staff turnover in the White House’s first two challenging years. Rahm Emanuel announced, as of October 1, 2010, that he would resign as Chief of Staff to run for Chicago mayor. Not good timing for a relatively soft-spoken Administration with (at times both) parties vigorously against them. It will not get easier. Obama depended on the outspoken champion to quarterback their defensive position with loud and resilient views. Although VP Joseph Biden assumed the role of advocate and deflector-in-chief, the aggressive and tireless manner in which Emanuel faced opponents is a loss at a crossroads in the political timeline. Here is the double-edged sword: If Emanuel wins, he will be mechanic-in-charge of the engine of a state that, like so many, is facing financial crisis. It will be hard to gain public support by further reducing Illinois’ already economically embattled budget. Now, in the face of a Republican-leaning Congress, President Obama lost his most vocal and fearless political confidante. It is easy to consider that the recent tax reform bill, and how it was spun, might have been different with Rahm at the table.
9. Owen Van Natta (CEO): MySpace
MySpace, MySpace, wherefore art thou, MySpace? Few industries are a monopoly for long, but competition is tough in the kingdom of Facebook. It will be even tougher now for MySpace. After less than a year as CEO, Owen Van Natta left in early 2010 to join Facebook app-maker Zynga as EVP of Business. Van Natta, a Facebook alum, did not see eye-to-eye with parent company News Corp brass and chose not to stay. MySpace took a double blow as Jason Hirschhorn (promoted along with Mike Jones to be co president), departed MySpace months later in June. MySpace is striving to revive revenue by re-focusing on music, videos, games, and the youth demographic. MySpace is eager to sustain profits, having suffered a poor performance in the past quarter, pulling down parent company News Corp.’s balance sheet.11 The job is not easy, but someone should find a way to run a business off of over 54 million users12, as long as they can hold on to them.
10. Ed Whitacre (CEO): General Motors
No one person, including Whitacre, could save or end GM. The change at the helm is more an omen of GM’s leadership crisis following its recovery from bankruptcy. Steven Rattner (appointed to head the Auto Industry Task Force and “clean house”) selected Whitacre (former AT&T CEO) to signal an auspicious new beginning for GM. However, short-lived executive tenures stall inertia and erode much-needed stability. At the same time, does this call into question other choices that Rattner (who never worked in the auto industry) may have executed without long-term considerations? Remember, Rattner plays the private equity game. He does turnarounds to win the short sprint, and is not a long distance runner. Whitacre, CEO for only 9 months, stepped down in September and resigned as chairman at year’s end. The timing of his announcement came as a surprise, as it coincided with GM’s $23.1 billion IPO.13 With so much change at the top, few exist to take the reins of a company in transition. Whitacre’s successor, Dan Akerson, has been on GM’s board for just over a year. Though no one person carries a company, GM cannot afford missteps right now.
Honorable Mention
Steven Slater (Flight Attendant): JetBlue
Peanuts, pretzels, and a psychotic episode. All in a day’s work for the JetBlue flight attendant who had had enough of dealing with his passengers’ baggage. An expletive-rich announcement and emergency chute later, Steven Slater quit his job and made international headlines. Heralded by some for acting out the fantasy that millions wish for, Slater repented in the end for his actions. He took a plea deal for a $10,000 fine and 12 months in a mental-health program. Public reaction was certainly divided, but the incident highlighted the two sides of growing tensions in the airline industry. Passengers gouged with more fees, delayed planes, tighter seats, and less amenities, and the crew who now has to police the air, charge for amenities, and deal with people stuffing a week of shoes and souvenirs into an overhead bin built to hold a bundt cake. If you hire people to do one job, and you change that job and increase the stress of it, those same people will give you results you did not expect.
Conclusions: America called for leadership, and asked their employers to be more transparent in 2010. Social media and WikiLeaks willingly lent a hand. The funny thing about transparency is that once you expose the Emperor’s clothes, you expect others to stop wearing them as well. As the clothes faded, leaders reset goals, companies reanalyzed strategies, and boards wrung out what they could from whatever they had left. Was any of this preventable? Certainly 94% of turnover is. When great employees leave they take significant intellectual and relationship capital and also (as seen from this year’s list) other great employees. First observed in the late 90’s War for Talent, Retensa calls it the “Undertow Effect,” when influential individuals depart and take their peers and/or subordinates with them. By all accounts, the currents of this undertow are getting stronger.
