36 direct reports, no heir apparent: How Jensen Huang’s ‘flat’ org may have hampered Nvidia’s succession planning
Huang resigned on Thursday after confessing to an affair with Alice Huang, a former Megaspeed executive and suspected Chinese spy, and reports that he had a second affair with an Nvidia subordinate.
Key points
- “This can negatively affect succession planning, where fewer people gain the experience necessary to prepare for more senior roles,” Siobhan O’Mahony, a professor at Boston University’s Questrom School of Business, wrote in a recent report.
- The chipmaking giant employs more than 30,000 people, and its founder and now former CEO Jensen Huang had often expressed his loathing of bureaucracy.
- A ‘flat’ organizational structure, in which layers of middle management are stripped away so more employees report closer to the top, has become a sort of Holy Grail in corporate America.
This flat structure made Huang—who founded Nvidia in 1993 and helped build and fund the AI boom—central and seemingly indispensable to his company.
Additional details
- But what flat companies gain in speed and nimbleness, they might lose in their ability to build a bench of CEO candidates, should the current chief executive have to suddenly step down.
- Few companies had exemplified the flat org more than Nvidia.
- Flatter organizations, in which managers have more direct reports, can make it harder to groom future leaders.
- Employees were encouraged to share suggestions directly with leadership, regardless of how long they’d been with the company or their seniority.
- Companies from Amazon to Meta to Citi have in recent years slashed layers of management to simplify their reporting structures, foster quicker decision making, and, in some cases, free up cash to fund the AI boom.
How this summary was made: extractive summary — built from the sources' own reporting. It is drawn only from the reporting of the sources listed below — read the originals for full detail. How we summarize →
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