Are you the tip of the spear? Nvidia shows the risk

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.

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.