Big Mistake Letting George Zimmer Loom Large: Pro
Men's Wearhouse's board could not have taken the decision last week to terminate company founder, executive chairman and public spokesperson George Zimmer lightly. Considering the suddenness and lack of detail for terminating the company's relationship with Zimmer, the best speculation is the board had no other viable alternative
At the Men's Wearhouse 2011 annual meeting, Douglas Ewert was promoted to succeed Zimmer as president and CEO in a very orderly transition of operational power. However, to the public, Zimmer's role as the man in charge personally guaranteeing customer satisfaction was unchanged. The seeds for Zimmer's unexpected departure were undoubtedly sewn by creating an ambiguous set of circumstances that I'm surprised held up as long as they did.
Under Ewert, Men's Wearhouse has posted solid earnings, most recently and notably a 23 percent gain in its 2013 first-quarter profit. Zimmer's post-termination statement "Over the past several months I have expressed my concerns to the board about the direction the company is currently heading. Instead of fostering the kind of dialogue in the boardroom that has in part contributed to our success, the board has inappropriately chosen to silence my concerns through termination as an executive officer" suggests dissatisfaction with the company's growth.
One can only imagine how Zimmer would express his concerns if Men's Wearhouse was growing at a slower pace.
It would be unreasonable to think Zimmer wouldn't view Men's Wearhouse as his company. By allowing him to not only stay as executive chairman, but to remain the central figure in all advertising and promotional campaigns, the board undoubtedly reinforced this belief.
Moving the business forward in any direction, Zimmer didn't agree with what was probably a daily grind and it must have been difficult for Ewert to really make his imprint on the company with Zimmer looming so large.
From a so-called business lifecycle management (BLM) perspective, Men's Wearhouse did not create the right circumstances for transitioning to a post-Zimmer era. Business lifecycle management is a dynamic model for leveraging human capital by matching talent and professional qualities to an organization's current and near-term operating characteristics and assures consistent performance and smooth transition through a company's life stages.
Even if everyone was on the same page in 2011, even if Ewert was Zimmer's hand-picked successor, the board should have had enough wisdom and foresight to know that keeping a founder highly involved is a recipe for frustration and potential disaster. That miscalculation and apparent inaction over time led to the chaotic shift away from Zimmer, so messy Men's Wearhouse postponed its annual shareholder meeting.
Had Men's Wearhouse considered BLM principles in 2011, it would have understood that mistakes are most often made when things seem most under control. Zimmer should have been phased out as the company's public spokesperson at that time and his role of executive chairman tightly defined.
For one thing, it is neither an executive chairman's role or place to personally guarantee customer satisfaction; that's a business management matter. By allowing him to give every appearance of still being Men's Wearhouse's most critical asset, the board failed to realize that Zimmer would likely expect he'd still run the show
In Men's Wearhouse terms, companies that fail to adopt BLM principles will not like the way they feel, I guarantee it.
Mike Berman is a consultant for start-ups and companies facing transitions. He has more than 20 years of executive experience in diverse industries and regularly publishes at his blog, Berman Means Business.