The Nvidia Way: Jensen Huang and the Making of a Tech Giant

by Tae Kim

Yet as I learned soon enough, Levin was not an outlier. Activist investor Carl Icahn has a theory that much of corporate America mismanages the succession process in choosing new CEOs. He calls it anti-Darwinian—the very antithesis of the ruthless process of natural selection that allows only the best equipped of a species to survive and reproduce.1 Icahn observed that competent executives often get sidelined in favor of more likeable but less capable ones because of behavioral incentives inside companies. The personalities who ascend the corporate ranks resemble college fraternity presidents. They become friendly with the board of directors and are not threatening to the current CEO. They’re not prodigies, but they’re affable, always available for a drink when you are feeling down. As Icahn put it, these figures (they are mostly men) are “not the smartest, not the brightest, not the best, but likeable and sort of reliable.” CEOs want to survive. Naturally, then, they prefer not to oversee a direct subordinate who is brighter and could potentially replace them. They tend to opt for someone slightly less astute than they themselves are. But when the CEO eventually departs, the glad-handing executive who is now on good terms with the board of directors frequently gets elevated, perpetuating the “survival of the un-fittest” as the new CEO starts a similar cycle.