Management and business research have been extensively discussing options to the exit strategy. Has Simon Cohen, 34-year old founder and managing director of Global Tolerance, come up with a new approach?
After having put the company – a successful PR agency whose clients include the Dalai Lama, TED, and Gallup – on a year-long sabbatical, Mr Cohen has decided to give away 95% of his business, worth around £1 million, so that he can spend more time with his family. He will be looking for a new leader who is equipped with financial acumen and who can bring a new vision to the business. The new CEO will find a company with £10,000 in the bank account, no debts, a prestigious portfolio of clients and ten years worth of contacts; whilst Mr Cohen will sit on the company’s Board with an advisory function for 12 months.
The search for the new leader is open to anyone who has the right set of skills and is able to engage with global leaders as well as local charities. Selection will be based on a 5-step process which includes a social media test, an online application, a video interview, a business plan, and an evaluation day to be held in London.
Global Tolerance’s initiative, referred to as an Open Leadership Exercise, is certainly innovative and will be followed with interest by other businesses. Cognitive psychologist Dr Lynda Shaw saluted it as an “exciting prospect” and an “excellent platform to promote authenticity, transparency, and strong social vision”. This decision, Dr. Shaw adds, is likely to generate a positive reaction from the new appointed leader; likewise, it is an opportunity for a talented individual to “step forward and give a business a burst of energy and ideas”. The publicity of this exercise, it can be added, might also work in favour of the company and attract new clients.
Nonetheless, this strategy is likely to face a number of challenges. Firstly, it can be questioned whether skills and personal qualities alone are enough to guarantee a strong leadership. The new leader could bring talent, energy, and forward thinking. Nonetheless, managing an established company such as Global Tolerance will also require an individual which can demonstrate prior business experience.
It is also important to look at the situation from the client’s perspective. In an industry such as PR, where success and client retention are largely based on the relationships built between individuals, how will Global Tolerance’s clients react to the idea of working with professionals whom they did not originally choose?
Similarly, the financial aspect must be also taken into consideration. Mr Cohen argues that he started the business with £200 in the bank account and that new beneficiary will operate in better conditions than his. Is this enough, however, to convince the banks to collaborate and guarantee access to credit to a new professional without an established business reputation, and a company whose staff has been entirely replaced?
A further challenge for Global Tolerance might be represented by the relationship between the new CEO and Mr Cohen in his new mentor role. It is fair to think that his advisory function will provide guidance and ensure continuity of business. On the other hand, we could also question how much of a say he will have in the decisions of the new company, and to which extent his influence will count in the board of advisors. What would happen, for instance, in a hypothetical contrast between Mr Cohen and the new leader? Just ask the new Manchester United manager, David Moyes, how easy it has been to follow in the footsteps of a strong leader!
On a different note, the Open Leadership Exercise could have a potential negative impact on Mr Cohen himself. By handing his company over – a decision motivated by reasons whose validity is far from being questioned – he runs the risk of being seen as unreliable in business, which could have implications on his future ventures.
Simon Cohen has proven to be an innovative and successful social entrepreneur. Time will tell whether his unconventional initiative will bring to his company the results he hopes.
Article by HRreview journalist Sergio Russo