Kimberly White/Getty Jack Dorsey, Twitter's interim — and likely permanent — CEO.
Along with others, we were scratching our heads on Thursday when Twitter announced a convoluted CEO transition plan with the current CEO exiting, the company's founder returning as "interim CEO," and the board conducting a search to find the new CEO.
None of the public explanations of this plan made any sense, so we asked ourselves and a source familiar with the situation what was really going on.
Here's what's really going on:
The assumption and intention of this process is for Twitter's founder, early CEO, and now "interim CEO," Jack Dorsey, to become Twitter's permanent CEO. Everyone hopes that Dorsey's authority and vision as a founder will galvanize Twitter and allow the company to finally figure out how it wants to evolve its service and what it wants to be going forward.
But there are some complications on both sides that have led to this weird half-pregnant "interim" process.
- Jack Dorsey already has another full-time CEO job. He's the CEO of Square, another company he founded after he was forced out as Twitter CEO. Square is a big, successful company, and Dorsey has commitments there that may be hard to quickly exit from. At the very least, Dorsey did not likely want to stun Square investors with the news that he is suddenly abandoning the company.
- Jack Dorsey will almost certainly not succeed as a part-time CEO. Dorsey has tried the half-Twitter, half-Square thing before. He tried to be the Twitter product visionary and the Square CEO at the same time. That failed. Dorsey then left Twitter again and became the full-time Square CEO.
- Jack Dorsey may not succeed as Twitter's CEO — or be happy as Twitter's CEO — even if he fully commits to it. There are
questions on Twitter's board as to whether Dorsey will be a good leader of the company even with all the founder and CEO experience he has. And Dorsey might discover that he doesn't like being the CEO of a public company. This "interim" period will allow both the board and Dorsey to try out the arrangement and see how it goes.
- The board will be able to cover itself by doing a broad search. If Dorsey fails as CEO, investors will scream that the board was derelict in handing the job to an insider without doing a bona fide search for the best candidate. The board wants to assure itself — and be able to tell investors — that it searched the world and there's no one better out there.
In short, if this trial period doesn't work out well, both Twitter's board and Jack Dorsey now have an easy, face-saving out. And Dorsey also has time to exit some of his other commitments.
The trouble and risk with the interim plan is that it means the company's purgatory period will continue. For the past six months, Twitter and its employees have already had to deal with the distraction of reports and speculation that former CEO Dick Costolo was about to be canned. Now it will have to deal with questions about how long Jack Dorsey will be around.
Until this purgatory ends, it will undermine Dorsey's authority and ability to make major changes. Executives, clients, and potential recruits will always wonder whether Dorsey will be around long enough that they should commit to him. Shareholders will wonder how much credence to give Dorsey and his plans. Et cetera.
So getting resolution and appointing a permanent CEO quickly will be important.
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