Photo by Mariia Berezovsky on Unsplash
Nvidia just lost the only CEO it has ever had.
Jensen Huang has resigned. The trigger was personal: his admitted affair with a woman U.S. intelligence concluded was spying for China. Then the New York Times reported a second affair, this one with an executive who reported to him, according to five people who work at the company.
The cause was personal. The damage is structural and, most importantly, strategic.
One boss, 60 direct reports
For 33 years, co-founder Huang was the tip of Nvidia’s spear. The company was organized around him.
By his own count, more than 60 people reported directly to him. Sixty. CEOs I work with struggle with ten. I once had 28 direct reports, and that was way too many.
Huang ran the company through group meetings, working problems out in the open with everyone in the room. He said he read several thousand emails a day from people across the company. Asked about traditional org charts, he said “none of that stuff makes any sense to me.”
I’ll give him this: it worked. Information moved fast. Decisions got made close to the work. Nvidia went from a $305 billion company in 2022 to flirting with $6 trillion this year.
But that structure has a cost. When 60 people report to one person, it’s hard to groom someone to be next in line. When all authority runs to one person, so does all the risk.
The world’s biggest case of founder syndrome
Founder syndrome is what happens when an organization stays built around its founder long after it has outgrown that arrangement. The founder’s instincts, relationships and authority got the company off the ground. Over time they can become the bottleneck.
The usual signs:
Decisions route through one person. Little gets settled without the founder, even when others are qualified.
There’s no real No. 2. Senior people execute, but nobody is developed to lead.
Governance stays weak. The board defers to the founder instead of overseeing them.
Strategy lives in one head. It’s never fully written down or shared.
Pushback is risky. Challenging the founder feels like disloyalty, so problems go unflagged.
Succession gets avoided. The topic is uncomfortable, so it never gets scheduled.
Nvidia fits much of that list, with one caveat. Huang wasn’t the stereotypical founder who can’t scale. He scaled Nvidia to a historic level.
But founder syndrome isn’t only about founders who fail. It also catches founders who succeed so completely that nobody plans for the day they’re gone.
What the market is pricing
To the extent a leader personifies the organization, the organization suffers without him: its reputation, its decision-making, its strategy, and its continuity.
Nvidia’s value rests on a bet that it keeps winning. That means delivering its chip roadmap, keeping developers loyal to its software and holding relationships with the biggest customers and governments in the world. Huang personally carried much of that. So when he left, investors didn’t just lose a manager. They had to recalculate the odds that the strategy keeps executing.
The stock fell more than 11% before the opening bell, extending a slide that has taken roughly $1 trillion off Nvidia’s value this month.
Business owners, take note. Buyers, lenders, and investors apply the same discount to your company. A business that depends on its owner is worth less.
Every strength has a shadow
Huang’s centrality gave Nvidia speed, coherence, vision and relationships no one else could match. It also made him a single point of failure.
Most strategic planning treats strengths and threats as separate lists. Often they’re the same thing, seen from two sides. The owner who holds every key customer relationship. The star salesperson. The one giant client. Each is a strength. Each is also a risk.
That’s why scenario planning belongs in every strategic plan, as part of strategic foresight. Take each strength and ask: what happens if this goes away? Did Nvidia ever run that scenario on its CEO? I’ll bet that exercise would have flagged founder dependency as a real threat.
No one waiting in the wings?
The board named CFO Colette Kress interim CEO. She’s a respected veteran who has worked alongside Huang since 2013. But “interim” suggests no successor was ready. The board also named Nvidia’s first-ever chairman. After 33 years.
Then President Trump weighed in on Truth Social. Only one man could replace Huang, he wrote: Tim Cook.
Whether or not that happens, look at the symmetry. When Apple lost Steve Jobs, it was prepared. The board promoted the operator who had been running the company behind him for years. Under Cook, Apple’s systems, supply chain and bench were built, and Apple kept winning. This fall Cook did it again, handing the CEO job to John Ternus and staying on as executive chairman. Planned. Orderly. Almost boring.
So the name being floated for Nvidia’s top job comes from a company that has done succession right twice.
Apple had its next leader in the building. Nvidia does not appear to have one.
Racing without your biggest gear
At a hilly half Ironman triathlon in Missouri, a few miles into the bike leg, my bike’s front shifter quit working. I was stuck in my small chainring for the rest of the 56 miles, without the big gear my riding was built on. My short-track speedskater legs were made for pushing big gears. Now I couldn’t.
Then another rider told me my spare tire had fallen off my bike a while back. One flat and my day would have been over.
Racing always carries risk. So does running a company. In the first hour of that day’s race, my risk of finishing poorly or not finishing went up sharply, twice.
I couldn’t ride my usual race, so I rode a different one. I spun, pedaling far faster in an easier gear to make up for the power I’d lost. On the downhills my legs whirled chipmunk-like, until the bike outran my pedaling and I had to coast. On the run, in 94-degree heat, cramps forced me to walk the steepest hills and change my stride. I kept going.
I posted the fastest bike split in my age group and finished second. That wasn’t luck. It came from planning, preparing, and resilience. I had picked that race for its hills, as training for Ironman Canada. I had a nutrition and electrolyte plan and stuck to it. And when things broke, I adapted instead of quitting.
Nvidia just lost its biggest gear. It can’t race the way it used to. The question is whether it planned and prepared for this, and whether it has the people and the resilience to race a different way and keep its winning trajectory.
Every leader should answer that question before the shifter breaks.
Questions for you
How many people report directly to you, and is that by design or by default?
Who are you grooming to do your job, and do they know it?
Are you the strategy, or does your company have one that could keep winning without you?
Has your strategic plan ever asked, “What if we lost our key person?”
If any answer makes you uncomfortable, it belongs on the agenda at your next strategic planning session.
