Chapter 7 - Defeated in Succession

The always thorny question of timing the retirement of a successful CEO and choosing a successor can get even pricklier when the CEO is also the founder. Too often the board of directors has retreated into complacency and dependency after years of strong leadership. Too often the CEO is left to choose his own end date—which invariably gets extended when growing turbulence threatens the greying legend’s legacy.

An Wang was arguably the most brilliant CEO we ever encountered. The visionary inventor and grit-practical engineer had navigated his company through perilous straits for more than twenty years, moving from one technology wave to another with no discernible heavy breathing. Wang tended toward the ascetic, as his autobiography makes clear: “In general, I do not have much interest in the ostentation that is commonly associated with being the CEO of a large corporation. At any one time, I only own two suits, which I replace when they wear out. I prefer to have lunch by myself, and I generally use the time to read and think.”1 Today, Wang is revered by bloggers as a near cult figure, complete with posters and a book of sayings, though his former shareholders might hold a different view.

In the business world, An Wang’s imprint was writ large, but especially in the daring leaps, minimalist product design, and rabid rush to market that were the hallmarks of Wang Laboratories. All of the important decisions were his—initially, to good effect. The other members of the management team were active in their own endeavors. John Cunningham, a brash, young ex-IBM sales representative nurtured by Dr. Wang and reportedly dubbed the “American son” by Mrs. Wang, oversaw sales and field maintenance. Manufacturing and finance were run by Harry Chou, a long-time friend of Wang who was smart, sensible, and seldom visible outside the company. Finally, there was the real son, Frederick Wang, a Brown University computer- science graduate who was in perpetual training to succeed his father as head of engineering, if not the entire company.

It was our practice to spend two days with significant vendors, leaving the CEO interview until the end to pull all the pieces together, clear up any misconceptions, and provide feedback on our impressions of the company’s direction and management. All of these sessions were interesting and some were contentious, but none was more memorable than those with An Wang.

I remember sitting at a long, paper-cluttered table with Dr. Wang at the head, Naomi and I on either side, interweaving our sharp, or so we judged, questions from left and right. Wang, seemingly engrossed in office memoranda, would serenely cup our firecrackers and toss back the proper responses without pause. No other CEO exhibited such benign indifference to our efforts. At the end, he would look up, bright eyes beaming above a perfectly tied bowknot, and ask, “How’s Fred doing?” We liked Fred and generally reported positively on some aspect of his efforts, to which the father would shake his head and respond, “Fred has a lot to learn.” In a sense, that remark presages the end story of Wang Laboratories.

The “Indispensable Leader,” from the Beginning

“The Doctor,” as An Wang was called by everyone at headquarters, had been educated in China, where he formed an overarching respect for the Chinese culture and its sense of family obligation. In his autobiography, he disclosed that, “Like many Chinese families, we had a written history that would be updated every couple of generations by an affluent member of the family. These books gave our families a sense of continuity and permanence that I don’t see in the more mobile West.”2 The book covered twenty-five generations with great certitude, and the twenty-five before with a bit less.

At age twenty-five, Wang immigrated to Boston. He had survived the Japanese invasion, an experience he recalled fifty years later when