What’s the first thought that crosses your mind when you hear a CEO of a big successful company steps down? You probably think that the executives got caught up with a salacious scandal, similar to what we’ve recently learned about Bill Gates.
Zhang Yiming, the 38-year-old founder of ByteDance, the parent company of TikTok, announced he will be stepping down as the CEO. If you’re waiting for the juicy gossip and drama, I’m sorry to disappoint you. In an open letter, Yiming said his decision was based upon his own self-acknowledged lack of social skills. He appointed his old college roommate and current human resources chief, Liang Rubo, to take over.
In a rare case of humility, not often expressed by high-powered executives, Yiming, with a net worth estimated at around $35.6 billion, admitted, “The truth is, I lack some of the skills that make an ideal manager.” The founder added, “I’m not very social, preferring solitary activities like being online, reading, listening to music and daydreaming about what may be possible.”
He admits to caring more about ideas and new technologies, stating, “After handing over my role as CEO, and removing myself from the responsibilities of daily management, I will have the space to explore long-term strategies, organizational culture and social responsibility, with a more objective perspective on the company.”
Yiming further wrote about his decision, “I came to the conclusion that transitioning out of the role of CEO, with all of the related day-to-day responsibilities, would enable me to have greater impact on longer-term initiatives.” Seeking a change, he said, “With our business growing well, it is time to think about how we can, not simply scale, but make innovative, meaningful, long-term progress toward our mission to ‘inspire creativity, enrich life.’”
Yiming was concerned over getting stuck in the daily minutia of managing. “When companies mature and expand, many fall into the trap of the CEO becoming overly central—listening to presentations, handling approvals and making decisions reactively. This leads to an over-reliance on existing ideas already in the company, and results in knowledge structures being slow to iterate. To avoid this trap, I gradually came to a decision over the last six months to take on a new role at ByteDance.”
Given his self-described interest in deep thoughts, he said, “I believe I can best challenge the limits of what the company can achieve over the next decade, and drive innovation, by drawing on my strengths of highly-focused learning, systematic thought and a willingness to attempt new things.” He also shared his intent to get involved with “giving back to society.”
While there’s not a scandal, the timing is interesting. Chinese regulators have been aggressively scrutinizing big technology companies. Chinese President, Xi Jinping, has called for curbs to be placed on the internet sector to “maintain social stability.”
Jack Ma, one of the richest people in China and founder of tech companies Alibaba and Ant Group, mysteriously went missing for a couple of months recently, after criticizing China’s financial system.
Ma, a former teacher, is estimated by Forbes to have a net worth of about $46 billion. He is the rare rock-star businessperson in China. The iconoclastic billionaire cofounded Alibaba in the city of Hangzhou in 1999. Twenty years later, it became one of the world’s largest retail and e-commerce companies—boasting over 100,000 employees. His amazing success and outgoing personality catapulted him to global recognition and adoration.
In China, this type of attention could backfire. Alibaba found itself under the harsh light of regulatory oversight purportedly due allegations of being a monopoly. A $2.8 billion fine for anti-competitive practices was levied and Ant Group was suspended from proceeding with an initial public offering.
The Washington Post previously reported that prominent Chinese entrepreneurs who receive press attention are more likely to be investigated or arrested. Ma ominously and presciently told a group of rural teachers in 2016, “I think among the richest men in China, few have good endings.”
The Wall Street Journal reported, “In recent months, the company has been called in by authorities every few weeks. In April, ByteDance was among 34 of China’s biggest tech companies that made public pledges to comply with the country’s anti-monopoly laws, shortly after e-commerce giant Alibaba Group Holding Ltd. was hit with a record $2.8 billion in antitrust fines.”
“The antitrust regulator fined ByteDance’s subsidiary the equivalent of about $78,000 for having failed to properly report a previous merger.” It was part of a group of companies “ordered to conduct a security review over the use of what is known as deepfake technology, enabling the creation of hyper-realistic fake videos.” A subsidiary company that operates a short-video service was fined twice this year “over improper content.”
The big question is: why now? ByteDance is reported to be considering an initial public offering, valued at around $250 billion. Abdicating the CEO seat during one of the most exciting times in a company’s history, with a strong possibility of a huge IPO, does make one wonder.
Source: Forbes
