Twitter is on the hunt for a new CEO after the shock announcement that current boss Dick Costolo will step down on 1 July. The company has hired recruitment firm Spencer Stewart to find his replacement. Where should the head hunters look for the next Twitter CEO?
First off, they don’t want anyone like the incumbent. Current CEO Costolo started well but his recent performance has been dire. The fact that he departs without any obvious successor tells you everything you need to know about the long-term strategic approach he has taken while in charge.
Second, you need to avoid co-founder and soon to be caretaker CEO Jack Dorsey. There is a famous tech narrative in which a dynamic founder builds a great company, is ousted and must build a new empire, and then returns to take the reins when all seems lost to restore the brand to its former glories. Sound familiar? Except in this instance the narrative simply won’t wash. Twitter is no Apple – it has yet to prove itself as a great company or one that will have a lasting commercial legacy. And Dorsey is no Jobs. According to the New York Times many Twitter employees are feeling “trepidation” at the prospect of Dorsey’s return. Employees cite his “divisive” and “sometimes erratic” management style during his previous tenure at the company as prime reasons for their fears.
That’s exactly not what Twitter needs right now given its parlous financial performance. The company expects to generate around $2.2bn in sales this year. But the bigger problem is profitability. Twitter made headlines with its most profitable quarter in the last three months of 2014, generating $79m in adjusted net income. Hardly an awe-inspiring figure (Apple generates that much profit every 12 hours) but it was a start. In April, however, when Twitter reported a lower than expected profit of $47m and adjusted its revenue forecast down for the year, the financial markets finally lost faith and shares plummeted by 26%.
Twitter’s big problem – and the big requirement for any incoming CEO – is the need for a strategy. And by strategy I don’t mean coming up with cool sounding tech ideas by the dozen. Twitter might limit users to 140 characters, but internally there seems to have been very little restriction on strategic initiatives in recent years. Twitter’s recent strategic objectives include (deep breath) increasing the monthly user numbers, increasing revenues, improving profitability, increasing user rates with new features, launching innovative new ways for advertisers to reach users, increasing its usage on mobile devices and allowing non-registered users to access the site. Basically it’s the “throw as much shit against the wall as possible and see what sticks” approach to corporate strategy, which is, you won’t be surprised to learn, about as far from strategic thinking as you can get. The new CEO has to be able to make choices. What will Twitter do and what, more importantly, will it not do?
Another bonus would be finding a leader that can actually handle the odd reputational crisis. When Twitter was pulled into a major spat about racist and sexist trolling on its site the company’s lacklustre response and subsequent damage to brand equity was acknowledged by Costolo himself.
“We suck at dealing with abuse and trolls on the platform and we’ve sucked at it for years,” he recently explained to employees on an internal Twitter forum. “It’s no secret and the rest of the world talks about it every day. We lose core user after core user by not addressing simple trolling issues that they face every day. I’m frankly ashamed of how poorly we’ve dealt with this issue during my tenure as CEO.”
Any new leader must be able to respond faster and more effectively to the inevitable crises that Twitter’s giant customer base will create in the years ahead.
So who should Spencer Stewart select? All the smart money is on Dorsey taking the helm at Twitter and then wrecking it as a result. The less smart, more entertaining bet is on rapper Snoop Dogg, whose name began to circulate at the weekend as an alternative. Snoop tweeted that he was “ready to lead” and later outlined his strategy in a second communication to his followers: “First order of Business! Get that Moolah!” He might not be such an odd choice after all.
— Snoop Dogg (@SnoopDogg) June 11, 2015
— Snoop Dogg (@SnoopDogg) June 11, 2015