Ripple Effect: When Key Employees Leave, Talent Follows

We are humans first. Team relationships and trust matters especially when it comes to key employees. Employees are real assets, especially for services firms, and are not tracked on balance sheets.

Often departure of key employees and well-liked bosses triggers a talent exodus. This is due to deep personal and professional bonds that form within organizations and their impact on their teams. This is my personal summary based on my reading the articles referenced below. Reasons for departures seemed to include loyalty, trust, desire to continue working under skilled leader, future direction of the company concern, and desire for career advancement etc.

Case Study 1: Tesla's Talent Exodus

In 2018, Doug Field, Senior Vice President of Engineering, resigned after a leave of absence. Several engineers who had worked closely with Field left Tesla soon after his departure, either joining him at Apple, where he eventually returned, or pursuing other opportunities.

Case Study 2: Uber’s Executive Departures

Following Kalanick's departure in 2007, key executives including VP of Product and Growth Ed Baker and Senior VP of Engineering Amit Singhal also left the company. These departures created a ripple effect, with numerous senior and mid-level managers choosing to exit Uber as well.

Case Study 3: Apple’s Leadership Transitions

Jony Ive, the Chief Design Officer, left in 2019. Ive was a pivotal figure behind many of Apple’s iconic products. Following Ive's exit, several members of Apple's design team left the company, some joining Ive’s new design firm, LoveFrom, and others exploring different opportunities.

Case Study 4: Goldman Sachs and the Departure of Top Bankers

Following the departure of Gary Cohn, the President and COO, in 2017 others followed him out the dooor.

Case Study 5: Workday’s Founding and Recent Transitions

Workday itself is a prime example of how departing leaders can take talent with them to build successful ventures. In 2005, Aneel Bhusri and Dave Duffield, former executives at PeopleSoft, founded Workday after Oracle acquired PeopleSoft in a hostile takeover. Bhusri and Duffield were well-respected leaders, and their departure from PeopleSoft led to a significant number of employees joining them at Workday.

Case Study 6: OpenAI and Microsoft Controversy

In 2024, several key OpenAI researchers and engineers left the company after disagreements over the company's direction and its relationship with Microsoft. Many of these departing employees joined Anthropic, a company founded by former OpenAI executives.

These examples illustrate the profound impact that the departure of key employees and beloved bosses can have on an organization. The resulting talent drain can disrupt operations, weaken morale, and lead to a loss of institutional knowledge. For companies, it is essential to develop robust succession plans, foster a resilient and inclusive culture, and ensure clear communication about career advancement opportunities to mitigate the adverse effects of losing pivotal figures.

References

1. [Doug Field’s Departure and Its Impact on Tesla’s Engineering Team](https://www.theverge.com/2018/7/11/17562216/tesla-doug-field-resigns-elon-musk-engineering)

2. [Tesla Talent Exodus Post-Field](https://electrek.co/2018/08/03/tesla-talent-exodus-doug-field/)

3. [Uber Executive Departures After Kalanick](https://www.nytimes.com/2017/06/21/technology/uber-ceo-travis-kalanick.html)

4. [Uber Struggles with Leadership Instability](https://www.theguardian.com/technology/2017/jun/21/uber-travis-kalanick-ceo-resignation)

5. [Jony Ive's Exit and Apple’s Design Team](https://www.bbc.com/news/technology-48791347)

6. [Goldman Sachs Talent Drain Post-Gary Cohn](https://www.wsj.com/articles/gary-cohns-departure-goldman-sachs-1499932975)

7. [Impact of Cohn's Departure on Goldman Sachs](https://www.bloomberg.com/news/articles/2017-12-04/gary-cohn-says-departure-from-goldman-sachs-was-sudden-and-difficult)

8. [How Workday Was Founded by PeopleSoft Executives](https://www.forbes.com/sites/jeanbaptiste/2014/09/09/workdays-founders-on-success/)

9. [Aneel Bhusri’s Role in Workday’s Success](https://www.wsj.com/articles/workday-co-ceo-aneel-bhusri-to-step-down-11628871209)

10. [Impact on Workday After Executive Departures](https://www.businessinsider.com/workday-executive-exodus-after-co-ceo-aneel-bhusri-steps-down-2021-8)

11. [Robynne Sisco’s Departure from Workday](https://www.reuters.com/business/finance/workdays-co-ceo-aneel-bhusri-step-down-2021-08-27/)

12. [OpenAI and Microsoft Controversy](https://www.theverge.com/2024/03/15/openai-microsoft-talent-exodus-anthropic)